Most business owners struggle for years chasing higher profits.

Most fail. And they do so because they are relentlessly trying to make their bottom-line grow by focusing on upping sales or cutting expenses.

After all, those are the only factors you can work, right?

What if I told you there are many paths to bigger profits? And showed you a way to drastically increase your bottom line by working any one – or all of them?

You see, most of the owners coached by my team or me are so stuck on getting more customers, more revenues or more profits, they miss seeing a much bigger picture.

They don’t realize all three of those numbers are the result of 5 other factors …

And when you know all 5, you can MULTIPLY your bottom line.

Would you be a little more excited about your business every Monday morning if you knew your profits were “multiplying”?

Well, in this issue and the next, I’m going to guide you through what I call the “5 Ways” – the formula for profit I believe is responsible for more business growth than any other “secret” I know. Best of all, it works for any business, including yours.

How?

By remembering that profits, revenues and the number of customers are all the result – an end score. And just like baking a cake, unless you change the ingredients, the results stay the same.

The “5 Ways” focuses on the following 5 factors that drive profit in any business – and these 5 alone:  Lead Generation; Conversion Rate; Average Dollar Sale; Average Number of Transactions and Profit Margins.

Those are the same 5 factors are highlighted in our “5 Ways” illustration.

Increase one – or any – of these factors and you start multiplying your profits.

I’ll show you how, and we’ll work through each factor one-by-one.

Leads:

The first factor in the “5 Ways” is leads. So what’s a lead?

It’s simply the total number potential buyers a business has contacted – or that contacted the business – over the course of a year. Leads are also known as “potentials” or “prospects.”

Conversion rate:

This is the percentage of people that actually bought. If 10 people walk through a store and three people buy, that store’s conversion rate of 3 out of 10, or 30%, for that day.

Number of customers:

This is the number of total customers, and is determined by multiplying the total number of leads by conversion rate.

Average dollar sale:

This is the average dollar amount per sale – estimated over the course of a year.

Average number of transactions:

This is the number of purchases the average customer will make over the course of a year.

Revenue:

This is the total amount of overall sales for a business.

Profit margin:

This is the profit percentage of each and every sale. Simply put, if a business sells something for $100, and profit was $25, the profit margin is 25%.

What does this look all look like? Let’s run some numbers.

Your Company

Let’s say your company has determined the following:

Number of Leads                    4000

X                                             X

Conversion Rate                     25%

=

Number of Customers             1000

X

Number of Transactions          2

X

Average Dollar Sale                $100

=

Revenue                                  $200,000

X

Profit Margins                         25%

=

PROFITS                                $50,000

What does this mean? Simply, you are running a business that converts 1 in 4 prospects into paying customers; customers who average two purchases at $100 per purchase each year. Your company enjoys a 25% profit margin on revenues of $200,000. Total profit? $50,000.

A Simple Increase of 10% … in ALL 5 Areas …

Over the next year, let’s aim at an increase of just 10% in each of the 5 areas. Now, many companies will be able to do bigger numbers, and most of the companies we coach do far greater increases over a year. But let’s just aim at some simple things to work in each area.

Watch what happens to your bottom line:

Number of Leads                    4400

X                                             X

Conversion Rate                     27.5%

=

Customers                               1210

X

Number of Transactions          2.2

X

Average Dollar Sale                $110

=

Revenue                                  $292,820

X

Profit Margins                         27.5%

=

PROFITS                                $80,525.50

Interesting, isn’t it?

The $30,525.50 increase in profit ($80,525.50 – $50,000) in percentage terms equates to a 61% boost in the bottom line ($30,525.50 / 50,000). Phenomenal leverage.

Remember, we are multiplying here, not just adding. And if you think 10% is impressive, run your own numbers or the same numbers with a 20% increase and it will start to blow you away.

A free resource

If want to run a variety of numbers on your own, we’ve developed an interactive “5 Ways” calculator at the following link:

actioncoach.com/free-business-calculator-profit.php

It’s simple, it’s free, and it’s designed to give you an idea of how powerful the “5 Ways” can be.

Next month, we’ll see which of the 5 factors to work first, how to best use the formula and how to create an unlimited marketing budget.

Hopefully, this great “secret” will guide you to greater profits, and also show you how powerful knowledge can be for your business.

Because as I’ve said before – there are no secrets in business or life. There’s just information you don’t know yet.

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

Here’s a little known secret about business.

It doesn’t matter what your turnover is, or how many employees you have, or how many customers you've got.

It doesn’t matter how many offices you own or if you’ve got a cool company logo.

Profit is the only thing in business that counts.

Say you want to increase your profits. Where do you start? First, you need to determine where you are. Just saying you want to increase your profitability 25% is meaningless unless you have some benchmark to measure against.

In that vein, you need to discover what your average dollar sale is and what your current profit margins are.

Know going into this exercise that you might be tempted into thinking reducing costs is the key to higher profits. Keeping costs down is important, but if you really want to make more money, you have to increase your income.

Know also that you’ll be focusing a lot of your efforts on marketing – an area most business people view as an expense.

I suggest you start thinking of marketing as an investment – with every new customer viewed as a customer you have just bought. I also suggest you spend at least 50% of your time in this area of your business.

Generally, increased profits come from four areas: a better handle on management, money, marketing and merchandise. These “4 M’s of Profit” work together to help boost your bottom-line, and you can take a few things from more extensive strategies in each category to start leveraging your profits right now.

Let’s take a look at 7 things you can start doing today to make your income statement look better next year:

1)      Provide team training. This is a management task, but one that can really improve your company’s overall performance. Does the team know they are even a team? Are they aware of company sales goals or objectives? Are they even aware of the types of products you sell or services you offer? Do they know what your highest margin product or service is? Do you?

The point is, you can’t create leverage or any kind of synergy unless your team knows where they are and where they need to go. Either you need to provide direction – or they will provide direction for you. Start now to develop true team direction and leadership in your organization. It will pay off in a major way sooner than you may expect.

2)      Segment your current customers into four grades:  A’s, B’s, C’s and D’s. Concentrate on your A customers. They are the most profitable, most loyal and best source of referrals. Your C and D customers? Sack them. They are a waste of your time and resources, and they are constantly looking for bargains and discounts. Keep in mind the 80-20 rule that says 80% of your business comes from 20% of your customers. Those customers are your A’s. Spend your efforts and resources on finding more of them, rather than catering to the C’s and D’s.

3)      Keep track of costs and set budgets. This seems like a no-brainer, but it is amazing how many businesses have no idea what their actual costs are. Spend a whole week and check every expense. You might be surprised how much you’re actually spending on some things, and how little you’re spending on others. Regardless, this is the first step in identifying where you can cut any waste – and any savings here directly affects your bottom-line.

4)      Increase your margins and prices. This may be counter-intuitive and terrifying, but it is the easiest way to immediately increase profits. The good news is, most times you raise prices most customers won’t even notice. Those that do are typically your C and D customers anyway. Look at it as a nice way to tell those customers, “goodbye.”

5)      Stop discounting. This is another strategy that has a profound impact on profit. When you stop discounting, you literally stop giving money away. Think of it this way:  if you constantly discount, why even bother having a retail price? Not only does discounting cost you money, it gives your customers the general impression your “normal” prices are a rip-off. The flip-side of this, especially if you are in a “discounting” oriented business, is to add-on value instead. In some instances, you may be able to raise your price, add value for very little cost out-of-pocket and enormously leverage profits. In the end, it’s all about perceived value for your customer.

6)      Make it easy to buy. Look to lower the barriers of doing business with you at every level. This could mean allowing creative payment terms or financing options (you could even make this a new profit center in your existing operation!). It could also mean allowing trade-ins or trade-ups on merchandise, or creating a layaway plan, depending on the type of business you have. The point is, once you have the customer, make sure you do everything to help them spend as much with you as possible.

7)      Down-sell. Finally, you may have heard of up-selling and cross-selling, but down-selling might be a new one for you. What exactly does this mean? Basically, no customer leaves your premises without buying something. If you know a customer can’t afford a higher priced item, show that item to the customer first, then offer the lower priced item as an alternative.

A key to this strategy is to make sure you are absolutely certain your up-selling isn’t working with a particular customer or product. It’s always better to up-sell as a general rule. But if your goal is to ensure money is generated at every opportunity, down-selling in certain circumstances may help fill that role for you.

Since we’ve talked about adding value, I’ll even throw in one more strategy that could leverage your profits. Create your own private brand or label. In some retail outlets, the private labels outsell the big brand names – at margins higher than the big brands could ever get.

Who knows? Your private brand may take your business in a whole new and very profitable direction. Because profit really is what business is all about.

And I can guarantee it’s the one business model that will never go out of style.

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

As a business owner, I'm always amazed at how many opinions people have about networking.

Opinions that are backed with absolutely no substance, no research and no "bloody"  understanding at all.

You would literally be amazed at how people’s opinions are so polarized by what is such a fundamentally solid business model.  A model now taught in Universities and colleges across the planet.

In fact, if you do your home work, you’ll see that Network Marketing, or Direct Selling or Multi-Level Marketing has taken a massive about face in the last 10 years.

Industry figures show a 91% growth, more than USD$100 billion a year globally and, investors such as Warren Buffet and Richard Branson owning companies that use these marketing methods.

Yet, “so called” consumer advocates, pathetically weak investment advisors and every day people who have literally no experience, have done no research and have no grounds to be even thinking of making comment are doing you a disservice by possibly turning you away from a model that has proven to help millions create extra income.

As Jim Rohn puts it so well, you go to work during the day to pay the bills and at night to build your wealth.  Then you ask why Robert Kiyosaki calls it the “perfect business” and even wrote a whole book about it titled, “The Business for People who like Helping People.”

Then we go to noted economist Paul Zane Pilzer who has two books on the subject and you start to see that those who bother to educate themselves find that this industry is huge and full of amazing growth companies.

Here’s how it really works …

You’re a new company and you don’t have the tens or hundreds of millions of dollars needed to advertise, stock and sell your products through retail channels.  In reality, just the advertising budget alone kills most companies. Look at Big Kev.

So, the next best form of marketing is word of mouth.  And, if you want word of mouth to work, you have to have both a great product and the ability to pay the people who spread the most word.

That my friends, in simplest terms, is word of mouth or network marketing.

You pay people to spread the word.  Now, many will call it pyramid marketing.  Again, do your research, this is just not factual.  In a pyramid, you buy directly from the person above you who marks up the product (if there is one) and then you have to mark it up to the next person.  For many good reasons it’s illegal.

On the flip side, in Network Marketing, everyone buys directly from the main company, and everyone pays the same price.  Then, the company rewards those that spread the most word with the most compensation.

And, why do people get so upset and emotional over this … ?

Simple, it’s like any other business, if you do nothing you get nothing.  If you do a lot, you get a lot.  Some people join, do very little and wonder why it didn’t work for them.  They then, to justify their experience, state that networking doesn’t work.  It couldn’t possibly have been them.

Well, the same could be said for going into your own business, the same for investing in the stock market, or property for that matter.  Let’s be real, in life if you do nothing, you get nothing, if you do a lot, you get a lot …

If it seems I’m mad, you better believe it. If someone needs to stand up and be an advocate for this industry then let it be me. I am sick and tired of the Australian tall poppy rubbish. It has got to stop.

This industry has the ability to in a fairly short space of years help the average person create an extra $1,000 a month for a very small investment of money and a reasonable investment of time.  Something I’d love to see the people who knock it show you how to do.  All I want you to do, it do the research, don’t let these morons impress you with their attacks, let the real information speak for itself.

Go to www.networkingtimes.com and read as much as you can, get some books, watch some of the DVD’s.

Whatever you do, if you are in networking or thinking about getting in, listen to people who have done it, look to people who have achieved and then, judge for yourself the difference between informed and ignorant.

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

You know almost every big business started small, in fact many of them part time from home.

And yet, so many small companies fail to ever become more than a job and a wage for the owner. They fail to become true businesses and remain forever a BUSY-ness for the owner.

And to be blunt, there’s a reason most never grow.  You see there’s a reason your first business is the hardest one.  It’s because you have so much to learn.  Not only do you have to run the company, grow it and finance it, you have to learn as you go.  It’s a great challenge, one of the greatest.

But, let’s be honest, if it were easy, everyone would do it.  The challenge is only up to those of us with true entrepreneurial spirit …

So, let’s examine how to take any small business and make it big …

Here’s my true definition of a business, a “Commercial, Profitable, Enterprise that Works, Without Me …”

That’s right, the whole aim of the game is to get it to a stage where it works, so you don’t have to.

Here’s how you need to break down the definition …

Step 1 … A Commercial Enterprise … here’s where you get the basics right.  It’s vital to build a big company that you have the ability to deliver your products and services with high quality, great service and consistent productivity of your people.  Three main areas you need to work on … money, delivery and productivity.   Money is all about knowing your numbers and knowing you are making a profit on every sale.  Delivery is all about making sure every one of your customers is served consistently and with high quality and great service.  And productivity, about getting the most from yourself and your people.  This is the first stage of business growth and one many never bother to work through.  If you want to grow it, take these first steps …

Step 2 … A commercial Profitable enterprise … Here’s where you build revenues and capitalize on the profitability you built in step 1.  There are 4 areas you will need to build upon.  You will over time build the systems and strategies you have for Lead Generation, Converting Leads into Sales, Repeat Transactions and your Average Dollar Sale.  Building our business beyond a small company will need you to learn and build in these areas.  Over the next few issues of this magazine I will write articles on each one.

Step 3 … A commercial profitable enterprise, That Works … Here’s where you have to build systems, systems that run the company.  As you document, record, film and photograph how everything is done in your company you take it from a business that is dependant on good people to one that is dependant on good systems.  Add to good systems, good people and you end up with a great business that now works …

Step 4 … A commercial, profitable enterprise that works, Without ME … This is all about building a team.  If you want the company to run without you, then you have to build a team and a leader to take your place.

Step 5 … Growth … Get everything you have done to work together in harmony, with Synergy and open multiple offices, shops or territories.  This is where you multiply and use the system you already have working again and again.

Step 6 … Freedom and Results … now it’s big and you can let your team build it, it’s been several years, probably 7 to 10 years of you worked hard and smart, but finally you have made your small business big …

I know this seems like a lot of work, read my books for more details, but it takes time and learning, stay with it, it will be worth it in the end.  Owning your own business is definitely a great challenge, but it truly is filled with great reward.

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

STOP discounting ... it is the #1 business killer ...

Think of this, if you have a 20% margin and then have a 10% off sale you have to sell TWICE as much to make the same Gross Profit ...

Instead, add value ...

Give away hard items with a soft dollar value, ie a shirt that is valued at $200 but only cost you $80.  Customer still perceives they got $200 for nothing ...

So, how have you seen companies add value rather than discount ... ?  How have you done it ... ?  Think of 7 ways right now you could add value rather than discount your way forward ...

If cannot think of them, how can your customer ...

All the Best ... Brad Sugars ...

Click the link to download and listen for some simple yet powerful lessons on how you can buy as many new customers as you need ...

All the Best ... Brad Sugars

How many times have you played the “Whatever Happened to ...” game.  Wondering why a certain customer who used to buy what you have to sell doesn’t buy anymore?

Is there a reason?  Or group of reasons?  Has anyone ever done a study on this?

Though the years, I’ve accumulated a group of reports from different sources ranging from different sources ranging from U.S News & World Report, the Harvard Business Review, and several trade magazines to half a dozen motivational and “secrets of successful selling” articles.  But (and here’s the amazing fact) they all have the same statistics.

Now whether this is one person copying what someone else has written or said or simply perpetuating a myth I’m not sure.

What we are sure of is that the statistics make sense because they worked in our business (and seeing them gave us a reason to develop a new customer-oriented marketing plan) and in other businesses as well.

Here are the numbers as repeated in books, columns, and from the mouths of let-me-tell-you-how-to-succeed speakers:

Why Customers Leave …

·         14% leave because their complaints were not solved

·         9% leave because of the competition

·         9% leave because they moved someplace else

·         68% leave for ... no special reason or what we call perceived indifference …

In other words:  Seven out of ten customers who used to buy from you left for ... no special reason ... I don’t believe that ...  I think there was a reason ...  Or a series of reasons:

       I think they left because you never told them you cared...

       I think they left because you never told them they were important

       I think they left because you never said “Thank you” and “Please come back and shop with us again ...”

Many times I have found that owners and operators are so busy minding the business they forget to mind the Customers, and in the immortal words of super salesman “Red” Motley, “Nothing happens until a sale is made”...

How many times have you walked in to the store and found no one to give you any help or assistance?

I heard the story of writer Ken Erdman tells of the time he and his wife were shopping in a Philadelphia department store ...  His wife found an item and brought it to the counter - but no one was there.  And no one to be seen ...  And so Ken simply stood in the middle of the room and yelled at the top of his voice “Help! Help!” Suddenly security people appeared from everywhere demanding to know the problem...

“There’s no problem,” said Ken.  “We just want someone to help us.” 

The Japanese handle that by having People stationed on either side of the door when you walk into their shops ...  They bow and say O-kyaka-san, which roughly translated means, “You are a visitor to my home.”

Do I feel that way when I walk into your business?  Is one cashier talking to another ...  Or a friend on the phone ...  Or busy fixing stock ... Or ... are they so busy minding the business, they forgot to mind the customer ...

A retailer friend proudly showed us his new computers ...  He could tell us how many pairs of pink socks were sold on any given day at any given hour ...   His carry-home briefcase was filled with voluminous printout sheets that he read with the same interest and the newest novel by John Grisham ...  He would pencil in notes on the margin, make references for future buying patterns, and the store as an office away from his office at home ...

His once-successful business went bankrupt ...

He was so busy minding the business, he forgot to mind the Customer ...

Now nothing is wrong with cleaning stock, taking inventory, and buying computers ...  It is to be practiced devoutly, to be admired, and encouraged.  But not at the expense of the Customer ...  Businesses often tend to build fences to hide behind ...

We did a series of seminars for banks at annual state meetings across the country.  We asked each of them, “How many made more than ten officer calls last month?” (“Officer calls” mean  the bank officers had to leave the bank and personally make a call on a Customer and potential Customers throughout the community.)  Few raised their hand.  Yes, it was written down for them to do ...  Yes, they knew it was important ...  But there were papers to read and sign and employees to watch and criticize and . . . well, there just wasn’t enough time ...

We remind them to “take the time,” or the competing bank would be out asking a simple question to the Customer: “When was the last time you saw your banker?”

They were so busy minding the business, they forgot to mind the Customer ...

And what of the phone call to a business questioning a bill ... And the answer, “Sorry, our computer handles that.”

Really?  What’s his (or her) name?  Can I talk to him?  If the computer is going to take care of the business, does that mean it takes care of the customer as well?  Shall we set up your business like a vending machine cafeteria?  Customers come in, look for the selection they want, dial their credit card number alongside  the tiny window opening, and click . . . it opens for them to take what they want ...

And those of you that rave about the tremendous success of home shopping on TV, consider this fact:  The total sales (while impressive) make up less than 3 percent of the total retail in the United States ...

·         People are lonely ... They want someone to talk to ...

·         People are critical ...  They want to kick the tires and touch the fabric ...

·         People are social ... They want to “get out of the house” and go somewhere . . . the local mall or business is fine ...

And so the next time the desk piles up with figures to beat and merchandise to buy and salespeople to hire, make sure it does not take up the greater part of your day ...  That belongs to the Customer outside your door roaming around looking for help in buying an item ...

Take care of your Customer.  If you do, you will have a business to take care of ...

That’s a shame, considering how profitable it can be.  Here are 7 brilliant applications of the idea …

1.                  Introduce yourself to the database of another business …

This is the easiest way to join forces, and something almost any business can do. 

It’s probably best explained with an example.  Let’s imagine you run a small hairdressing business.  You have a slew of regulars, but rarely see any new business, owing to a poor location and dull advertising.

No problem – for less than the cost of one ad, you can have 300 customers personally recommended to you.

Here’s how it works.  You arrange to meet with the owner of a non-competitive, yet related business.  For a hairdresser, a beauty salon would be ideal.  Dependent on the target market of the hairdresser, a ladies gym might also be a winner.

Tell the business owner you are willing to give every one of their customers a free haircut, valued at $18.95.  The trick is, you’re going to set it up so it looks as though the owner of the beauty salon has personally paid for this gift.

You write a letter, signed by the other business owner, that says ‘ Thanks for being a customer – I appreciate it immensely.  Just to show that I truly am grateful, I’ve arranged a special gift for you … a complimentary stylecut with Julia’s Hairdressing.  I recommend Julia and her team highly – and I’m certain you’ll appreciate the difference too.’

You mail this letter to the beauty salon’s entire database.  To sweeten the deal, you might offer to pay for the postage and printing.

The benefit to the beauty salon is clear – they get to mail their customers an $18 gift without paying a cent for it.  They get all the good feelings, referrals and repeat business and they didn’t have to do a thing.

But the real benefits are yours.  Hundreds of qualified people will receive a personal recommendation to see you for a haircut.  They’ll also get an almost irresistible offer.

Compare this with a traditional ad.  You spend $400, get 10 calls, and maybe 5 sales.  Cost per sale: $80.  That’s pretty steep. 

With the joining forces concept, the stats are a lot more appealing.  A mail out to 200 people might cost you $150 all up.  Let’s imagine you get 10% (a pretty conservative estimate) – that’s 20 new qualified customers.  Cost per sale: $7.50.  Hmmmm, now it’s starting to make sense.

2.                  Join forces with 4 or 5 related businesses, and form a ‘collective’ ...

This idea especially applies to people in the service industry.

Here’s a great example …

Let’s say you’re an auto electrician.  You’re doing ok, but most of the work is going elsewhere.  The main mechanics in town are referring the work to other guys, and you’re getting killed in Yellow Pages.

What can you do?  It’s a tough one – although everyone who has a car may one day need your service, you never know when. 

The answer is to join forces.  Get on the phone to a mechanic, a car detailer, a tyre retailer and car tinter.  Tell them of your brilliant idea – ‘let’s join forces!!’.

Here’s how it works.  You’ll advertise yourselves under the one name – let’s say ‘Guaranteed Car Services’ (you’ll probably need to be a bit more creative than that).  You have one number (a Freecall number), one guarantee (either you’re delighted or you get the job for half price) and one policy – everyone helps everyone else out.

If the mechanic, car tinter, car detailer or tyre seller becomes aware of a car that needs an auto electrician, you get the name and details.  If you see a mechanical problem, you pass on the customer to the mechanic.  If the car detailer overhears the customer talking about tinting, they refer them to the car tinter.

At the end of every job, you run the customer through a checklist – ‘Ok, that’s you’re electrical problem sorted out.  Now, when was the last time you had the car serviced?  Right, I could arrange a service for you.  Here’s a $25 voucher towards that – I know the mechanic, Paul, and he does a top notch job.  Oh, by the way, summer’s coming – have you thought about tinting?  No, you should – I’ve got this card here from John’s Auto Tinting.  He said if I gave it to any of my customers, he’d do two windows for free when you book your whole car in.  And in case you didn’t know, both of those guys are covered by Guaranteed Car Services.  If you’re not delighted you get your money back.’

You run through your checklist, until each business has been covered.  Any ‘hot’ leads get passed on to the relevant business, and they return the favour for you.

It takes a bit of organisation, but it’s certainly worth it.  Here are 3 more interesting combinations …

a)     Guaranteed Home Services – a lawn mower, water blaster, painter, roof restorer and tree stump removalist.

b)     Guaranteed Beauty – a beauty salon, hairdresser, masseuse, psychic and gym.

c)     Guaranteed Fashion – a clothes store, shoe shop, hat store, tie store and image consultant.

Open your mind to the possibilities – who could YOU join forces with? 

3.                  Arrange free gifts to give to your customers …

A great one for businesses where there’s a long interval between purchases.

Let’s think about a car salesperson.  The hardest thing about selling cars is getting people to remember who you are next time.  Because they go 2-3 years without buying a car, there’s very little loyalty.

That problem is easily solved – just keep in regular contact.  Mail your customers cards, letters and communication, just keep the relationship going.

But if you’re going to mail them something, why not make it extra special.  Drop down to the local clothes stores and say ‘you know, most of my customers are young trendy women – they’d love to know more about your store.  If you give me a $20 gift voucher for every one of my customers, I’ll write a personal recommendation that they come and visit you’.

Once you’ve got that out of the way, go onto the next target business – a massage therapist.  Say ‘most of my customers have the money to spend on a monthly massage, and if they were shown how good it really is, I’m certain they’d be more than willing to come back regularly.  If you give me a voucher for every one my customers, I’ll mail it direct to them, and recommend that they see you every 4 weeks’.

Ok, that should take care of your customers for a few months.

Imagine that – you buy a car from someone, then start getting all these great gifts in the mail.  How would that make you feel?

You can arrange gifts from almost any other business – either in the form of a gift voucher, a free service, a trial product, a 2 for 1 coupon, a free consultation, an in-home design service.  The possibilities are endless.

Best of all, you won’t have to pay a cent for any of it.  And because it’s off your own back (and not the dealership), you take the list of names with you when you leave for another yard. 

People buy off people, so if you’ve built the relationship, you get the sales.  

4.                  Join forces with the suppliers of businesses you’d like to sell to … this is an extension on idea 1.

Let’s say you’re a management consultant – you specialise in helping mangers reach a state of peak performance.  Simply introducing yourself directly could work – but it’s really only you saying ‘hey, I’m good’.

People expect you to toot your own horn.  It’s when someone else toots it for you that they get excited.

So how do you do that?  Easy – hit the suppliers of the businesses you’d like to deal with.  For example, their stationery supplier.  You say to them ‘I’d like to give you a gift which you can them pass on to your top clients.  It’ll make them love you, and give them some genuine benefits.  I’m a management consultant, and I charge $456 an hour.  For your clients, I’ll do a full 1 hour appraisal and performance evaluation free of charge.  This will be your gift to them.’

To understand why this idea will work, you first need to understand the plight of the poor old stationery supplier.  They’re aware that almost anyone with better prices can come along and knock them off their perch.  There’s so little differentiation between service, price is often the only factor.

Doing something out of the ordinary for their customers will give them the edge.  They’ve introduced emotion into a very bland, price driven business.

The benefit to you is also massive – you get a personal recommendation from someone the prospect already knows and trusts.  For something as intangible as management consultancy and personal performance coaching, that’s essential.

5.                  Sell someone else’s product … probably the most straightforward joining forces concept of them all.  The trick is to be constantly scanning for hot products related to your business. 

Getting back to our hairdresser example, there are plenty of opportunities – a new quick –setting hairspray that you spray just once, a hair dryer that runs on solar power yet generates more hot air than any on the market, a new hair colour that changes with the weather.

You simply write your customers a letter that explains the benefits of the new product and ends with ‘Of course, I’ve arranged a special price for you.  To order, simply call me now with your credit card details.  I’ll arrange postage within 2 days.  And your purchase is guaranteed – if you’re not delighted, simply phone me and I’ll drop by and pick it up.’

Suppliers generally won’t mind, even if they’re dealing direct with retail stores – it’s another opportunity to sell the product after all.

You can also do this with service businesses – simply take a commission of their first sale to the customer.  For instance, a gym might sell a massage therapist in a mail-out to the their customers.  They do this, on the condition they get half of the first sale.  If the massage therapist is smart, they’ll understand the lifetime value of the customer, and jump at the chance.

So put your thinking cap on – who can you join forces with?  There’s thousands of businesses out there.  Why not make some of them your allies?  

Today I want you to really understand what a customer is worth, and not just your best customer, but an average customer ... what is their lifetime value ... ?

Think of this, how long does an average client buy from you, how many times a year, for how many years ... ?

A simple example, my favorite Las Vegas restaurant, N9NE, steak house at the Palms ... now, I am no where near an average customer, I'm a great customer, but think of this, I've bought at least 100 people in to taste Chef Barry's creations ( it's now in the Top 100 restaurants in the World).

Think of that, if Chef Barry's average customer or your average customer bought in only 5 referrals, how much are they worth?  Then how much are the 5 referrals worth and then again what if the 5 referrals on average bring in 5 referrals ?????

What does the Lifetime Value of a customer add up to for you?  Do the math and then work out what it's worth for you to keep the customers you've already got?   What are 3 things you can do to keep the best 20% of your clients/customers doing business with you?  Even knowing them is a start.

Then, what's it worth to BUY a new customer?  More on this one another time ...

All the Best ... Brad Sugars