Written by Ariel Pfeffer
The annual shareholders meeting got off to a bad start. Most were in a bad mood. Not only was there going to be no profit this year, but also sales had decreased and operating expenses had dramatically increased. Bonuses not to mention! There was even worse news as there was not an executive within the company who was not expectant of his own future.
Faced with such a panorama, everyone had the belief that profits are just the difference between sales and expenses. That way there are only two variables to manoeuvre or improve to be able to influence profits: increase sales or decrease expenses. But if we move away from this simplistic view, we could separate the sales variable into five different components that could be individually tailored to boost profits.
The 5 Ways We Found That Grew Our Business
The five ways to effectively grow a business are to get more people interested in our product or service, convert those interested in customers, get customers to buy more at higher values, make them buy more frequently and get sales to have higher profit margins. If we could increase each of these factors by just 10%, we would be giving our balance sheet an injection of good news.
To achieve this we can use these five strategies to get more profit. The most useful resources that we probably already have are strategies that are already being used which we can adjust.
- The Best-Sellers:
Identify the best-selling product or service in the entire company and increase its price by 10%. And if you do not know which is your best-selling product, it is in the hour of that you know. A 10% increase is large enough to give you an impact on your balance sheet and small enough that most of the customers don’t even notice.
- The Sales Scripts:
The sales scripts most companies sell based on good initiative and ability to your salespeople, but it’s hard to find companies that have a sales pitch aligned and consistent at all levels, from the presidency to the cadet. Why having good sales scripts embedded throughout the company is important?
Because it helps to boost the average value per sale by having all the items on par with each other with better value for you and your customers. It also aligns the entire company behind a common goal, creates a frame of reference for all, and creates an affinity greater among all officials that will later have an impact on greater sales yet.
- Loyalty Programs:
Loyalty Programs can increase the average number of transactions we can create a program of fidelity. However, having a loyalty strategy does not mean success automatically. To obtain the maximum return from a program of these it has to be directed to your best customers, those who buy the most from us and who are faithful who do not question our prices.
The first step then is to segment these customers. An effective loyalty program is not just a tool to give discounts or gifts, but it is something that it has to lead us to incremental and measurable profits.
- The Unconditional Money-Back Guarantee
I recently dedicated an entire column to this topic. Because of its importance, it can be considered the secret weapon to improve conversion rates, because the customer does not have “nothing to lose.” Even more so if the competition does not. The guarantees unconditional money-backs are also especially good for establishing long-term relationships with customers.
- Adverts That Always Evolves
Generate potential clients for your business through marketing actions. Advertising is always a relatively expensive option to increase your profits. The secret is to start doing it in a way that we can exactly measure your results. The key is to know precisely which audience we are trying to get there and analyze the best way to do it. Once we have well defined our base, an attractive offer or a good advertising creation can turn the same in (happy) first-time customers of your product or service.
Ultimately we are looking for incremental increases in the bottom line of your balance. Small changes can make big differences. And it was thanks to this argumentation on the part of the Marketing Director of the company that the Board meeting will end with a climate of relieved optimism for all. Shareholders and executives came out of it with galloping motivation. There was light at the end of the tunnel! A strategy outlined that was worth implementing in immediately.
In your company what is happening? It would be that it would not be necessary to give the balance a hurricane of good news?
The pessimist complains about the wind, the optimist expects it to change, and the realist adjusts candles!