If we care passionately for our business, we continue to search for ways of improving and maximizing the profitability. There are so many areas to consider, so it is important that we break each area down and go in search of the real detail that can make a difference. It is important however that we keep it simple. Areas that need to be focused on include the following:
1. Know Your Product
Do you know what your USPs are? Can they be improved upon? Ensure that you test the price point of your product, and never presume anything. Engage with your customers and test whether you can charge more. If you add value that the customer appreciates then they will be inclined to pay more. On several occasions we used to charge higher fees than our competition, but we went out of our way to provide a “special” service to our customers. We always did customer satisfaction surveys, which were exemplary, and our repeat business was very high, so that was all the confirmation I needed.
2. Marketing Sales Funnel
This lead, whether you convert it now or in the future, will sit in your sales funnel e.g. database, and over time you will convert many of these leads. You need to ensure your systems and processes are second to none so you miss nothing. You have paid for every lead in that funnel, so ensure you extract maximum value.
It is important to use many different marketing channels to complement each other. Ensure you test every marketing channel and as they begin to work, scale them up. If they start to do poorly then scale back. You need to bear in mind seasonal variations if that is relevant to your industry. In my experience, some will work better than others, so apply the relevant weighting and this will fluctuate over time. Marketing is normally one of your largest budgets, so you must measure everything in considerable detail.
Our marketing channels included TV, direct mail, online using pay per click, email marketing, and press advertising, with all channels being managed via our predictive dialling call centre. Every marketing channel was measured and each sub-channel was measured further. For example, on TV advertising we had a different telephone number for each channel so once the calls came in, our system would track them accordingly.
3. Sales Conversions
From the moment a lead comes into your business, you need to know exactly where it has come from and who is dealing with it to measure the sales journey. If you focus on these conversions, you find that by subtle improvements of your process or staff development, you can make a massive difference to your bottom line.
Once the lead comes into the organisation, have one person take ownership so you can clearly see the sales conversion throughout the process. Now it cannot be watered down by other people’s involvement. However, this is not always possible, so providing you can measure the various stages from initial enquiry – sales appointment to income generated – it’s fine, but measurement is critical.
In my business, it was impossible to have one person involved who was down to FSA regulation and our sales process. Each inbound, warm lead went straight to my top sales advisors, who would take ownership up to the point where an external sales advisor had to go to the customer’s house.
Once the external advisor was in the field, it was important that they delivered exemplary service to enhance on what the customer had already received. They would sell our core and associated products. All of this was measured by way of KPIs. Each sales pack that came into our office from our external advisors would be within 48 hours of them going to the customer’s home. Upon receipt, we would allocate it to one person who would look after that client until completion. There were KPIs for various stages of this process and we would again look for tweaks to improve performance.
4. Maximize Your Database
When you first get an enquiry, it’s best to ask for minimal information when they are applying online, but ask for more details as you progress through the sales cycle. If enquiring over the phone, you can gauge how much time someone has and complete as much detail as possible. Over time and after a number of contacts, build up the data on the customer so you can maximise your sales opportunities right then, and in the future.
The more data you have on a customer, the more you can profile them so you really understand their likes and dislikes. If you think about it, one of the most powerful retailers, Tesco, does this very well by using their club card to build knowledge on their customers. Over the last twenty years, just look at how they have evolved. Most of that is down to understanding their customers’ needs and fulfilling them.
Ensure your database is segmented by transactions completed so that a cold prospect compared with a repeat customer is treated differently. At every part of that communication process you must be delighting the customer so they return time and time again. The ability to diversify and add other products to sell to your database is endless if you have serviced them correctly. The underlying value in your business is within your database, so the more you continue to delight those customers, the more profit you will make.
Business is a balance between keeping costs tight, but also giving flexibility within your budget to allow people and your business to grow. I have always thought about cost from a simplistic view: If it is not essential or doesn’t add any value to the bottom line, don’t spend. There are obvious common costs such as rent, rates, utilities, and insurance that will be in your profit and loss every month, but the key is to ensure that you negotiate very hard so you are paying the minimum amounts.
If this is your first time negotiating such things then I strongly suggest you seek comparable quotes or use the services of professionals who have negotiated these terms before. One thing I would do differently is ensure that I got multiple quotes for a product or service I was looking to use. I always bought from “people”, so did not seek out enough comparable quotes.
6. Diversify/Add Products
This is such an exciting area and relatively new to modern business, but in my view gone are the days of selling just one product. There are still companies around that do this, but I can’t see many surviving long-term. Every single business has the potential to sell other products that complement their existing range, or simply diversify into other areas.
You need to be creative with your thinking to find other products, but with time and some brainstorming you will get there. One simple method is to look for related products e.g. if selling till rolls, look to add till roll machines and other stationery products to your range.
7. Merge/ Acquire
This is a good way to achieve massive growth very quickly. You need to ensure that you have the necessary expertise to get the transaction completed successfully with the necessary due diligence. Once completed, you will need strong operational and financial management to ensure the integration is efficient, and that businesses return to normal as soon as possible. This method is a good option where a competitor has a complementary product which, when combined, adds extra value and will lead to increased sales.
8. Increase Area to Include Europe and USA
This should only be considered once you have a considerable presence in the UK and your sales reach a plateau. Consider the expertise within your operation. Know whether to engage services of those that have demonstrated success by growing revenue lines within a European or US framework.
9. Technology Efficiencies
It is important that you always look to make technology developments to improve the efficiencies of your business. I always take the view that staff are there to maximise revenues, so where possible they all must add value and technology may assist in that process. Also, technology can take care of the more mundane functions where staff cannot add the value.
Ideally, paper flow should be non-existent and processes streamlined to ensure that everything is geared towards delighting the customer to achieve a quick route to cash. The technology should provide all relevant KPIs through business processes. These are the drivers the management use to manage the business. Throughout the process, there should be an audit trail that can clearly demonstrate the stages that the customer has been through and details the staff involved.
10. Customer Service
Business is all about people. You may have an amazing product or vision for your business, but if you don’t have the best people with the same vision and enthusiasm for that product, it’s unlikely to achieve maximum results.
It is important that communication from the boardroom down to every staff member is consistent and transparent. The best businesses I have ever seen are those where ALL staff are working towards a common goal, and everyone knows about the companies’ values and KPIs.
To delight your customers, communicate with them in a way that no one ever has before. You must go the extra mile and it must be tailored to each customer as we are all different. Importantly, you need to ask the customer how they want to be communicated with to get a good understanding of their values and what is important to them.
All your staff should be firmly bought into your “delighting customers” programme and be incentivised to overachieve in playing their part to maximize company revenues. All the areas above are vital to achieve success. However, it is not easy to do, and maximising the return is even harder. It may be worth bringing in some external experience so you avoid the potholes and fast track your results.
Having built and sold my SME, I now work with SMEs. I understand their model by embedding myself in the senior management team so I feel the heartbeat of the business. All areas are covered, but the four questions that we work on solving are: How do I grow my business?, How do I achieve client excellence?, How do I make more profit?, and Does my business model deliver?
Feel free to contact Dave Symondson on 07976 846776 or email email@example.com
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