❝ If you mean to profit, learn to please.❞
– Winston Churchill
Increasing Profitability
Long-term profitability is the goal for most businesses and success is based on your ability to do many little things better than your competition. The most obvious tactic is to reduce costs or increasing turnover. From a marketing standpoint there are several additional considerations that have lower implementation costs and greater longevity, and with a little effort, these can have a big impact on your bottom line.
Some examples:
- Set and monitor Key Performance Indicators (KPI’s).
- Calculate your expected Return On Investment for each project.
- Plan with measurable objectives and set budgets based on ROI.
- Develop systems & processes to reduce hidden costs.
- Focus on your most profitable customers and products.
At a time when everyone is looking for quick & easy solutions to increase revenue, make sure you don’t gloss over the simple stuff like, how to contact & find you (NAP = Name, Address, Phone).
Before you invest in new software, tools, apps or advertising spend make sure you’ve got the basics buttoned down. Problems can be tricky to find because these ‘mistakes’ often occur where specialist services overlap. But the same overlaps are also key customer transition points.
Example: It’s hard to image a company investing in a professionally produced marketing video only to post it on YouTube with out including ANY links to their business. Or websites without on-page SEO, flyers without CTA’s or even missing business contact information completely. Amazingly it happens more than you’d think.
Not all customers are equally profitable for business. You need to establish who your best customers are, so you can find more just like them. The other side of the coin is to identify the traits of your worst customers too. This way, you can either help them become better customers or direct them to your competition.
Outright bad customers are rare, but there may be some that absorb more company resources during the sales process than others. Problems commonly occur from expectancy gaps within your sales process caused by communication issues. An easy to fix once you’ve identified the problem.
Take a step back to see the bigger picture of your customers lifetime value. You’ll notice a surprising change to the way you make day-to-day business decisions. The three most common profitability hacks revolve around your customer lifetime value.
- Spend MORE per purchase
- Spend MORE frequently
- Spend MORE time as a customer
There are endless opportunities to employ these revenue boosting tactics in your business. And because they do increase profitability for short & long-term, these are key areas to monitor on all year round. They also go hand in hand with customer service improvements and encourage businesses to plan further into the future.
COST vs REWARD
There’s no downside to boosting profitability. The more profitable you make your business the bigger the rewards are when you start to drive more customers to your doors or make improvements to conversion rates. It’s a no brainier.
That said, why do so many companies miss out on the opportunities right in front of them? Quite simply – Time. Most businesses are busy running their day-to-day operations and don’t have the resources or time to identify areas to improve profit. So that’s where we come in.
PRO TIP:
PROFITABILITY SELF ASSESSMENT
Assess which parts of your business generate the most income. You can do this for products/services and even different types of customers. Keep it simple and use a basic A,B,C, grouping to guide your marketing decisions.
A = Awesome
B = Basic
C = Casual
This is a great exercise to help identify where to invest your time and money when it comes to marketing or even day to day focus.
Always be on the lookout for opportunities to improve your profitability. Look for the gaps your customers fall through and systematically fix them.
MORE ways to boost your business…
Find More Customers
Reaching new customers has never been easier or more affordable.
Make More Sales
A 1% increase in sales conversion is equal to a 10% increase in customers.
Be More Competitive
Most visitors already intend to buy. But why should they buy from you?
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