Need some money-making strategies? Look no further than these five keys.
At one point or another, every business owner has struggled when it comes to developing new ways to increase revenue.
At PestWorld 2011, Dan Zimanski, business coach with ActionCOACH, a business coaching firm, shared some foolproof tips for making businesses more profitable. Zimanski said he has made it his goal to help individuals reach both their personal and professional goals, as well as increase their revenues, by carrying out proven moneymaking strategies.
According to Zimanski, there are three common challenges that all business owners face. The most common challenge is the need for more customers.
Unfortunately, it’s not possible to just wake up one morning and have new customers at your doorstep. Rather, you need to first increase your number of leads. Once you get those leads, you must convert them into customers.
The second most common challenge is the need to increase sales and revenue. To accomplish this, you must increase your average number of transactions with your customers by influencing them to purchase more than just one or two services each year. Also, you must look at how much they spend each time they buy from you.
The third most common challenge is the need to increase profits. To overcome this challenge, it’s time to implement a few steps that are proven to gain revenue.
Zimanski has broken up his Action Coaching Strategy into five easy-to-follow keys:
Key #1 — Leads
The first key to increasing revenue is leads. The objective is “to attract quality, prospective customers,” Zimanski said. To accomplish this, you, as the business owner, must test and measure everything. Know your return on your investments, such as the money you make from any advertisements you use to sell your company’s services to customers.
You must also target a portion of your prospective customers, as opposed to the whole group. Identify your target market and focus on those groups that you specifically want to work with.
Determine what makes you better than the competition, then state your uniqueness and make “value offers” that persuade customers to respond quickly. Also, for best results, diversify your strategies to focus on a variety of customer needs.
It is important to remember that your most profitable customer is from your existing customer base. Since the cost of acquiring those customers already has been paid, their entire gross margin flows directly to your bottom line.
Key #2 — Conversion Rate
The objective of the conversion rate key is to “turn potential customers into paying customers,” Zimanski explained. To improve your conversion rate, the first step is to simply ask for the sale. Share all that you, as a business, are capable of doing for your potential customer. It is also imperative that you find out your customers’ wants and needs and their greatest challenges.
Be sure to connect with your customers’ emotions, as 80 percent of people buy with their emotions, not logic. It is also important to survey customers. Find out why they do business with you, what they like about your business and what other services may be of interest to them. Also, survey those that chose not to buy from you, as a means of discovering what you could have done differently.
Sales scripts are also essential when it comes to attracting clients, because it is crucial to deliver a consistent message to each individual. Be sure to use a written guarantee as well, as it will set an expectation to which all employees will be expected to answer. Make this guarantee in writing, and make sure your customers know about it.
Take the time to set daily sales quotas to measure which sales tactics are working and which aren’t. You also must be willing to eliminate tactics that don’t work as a means of focusing on techniques that do.
Key #3 — The Number of Transactions
The goal of this key, according to Zimanski, is “to get your customers to come back more often.”
To accomplish this goal, first build a database of customers and be sure to use it. Then, cross sell additional services to your customers. It is also important to make sure technicians introduce themselves to customers, as a means of building more personal relationships.
Another idea to consider is that of creating strategic alliances with other companies that have customer bases similar to your own. Such alliances are long-term strategies that help to build trust and create opportunities to share business with one another.
Customer referral programs also are important, because rewarding customers will help to convince them to continue working with you. Customers will be more likely to refer your company to others if they have positive interactions with you. Also be sure to continuously follow up with each of your clients and send thank you cards. Written thank you cards impress customers by showing that you care enough about them to follow up in a personal way.
Key #4 — Average Dollar Sale
The objective of the average dollar sale key is to “get customers to spend more,” Zimanski said.
You can do this by first letting go of customers who end up costing more money to service than your company makes by working with them. It is also important to use checklists to make sure you deliver consistent service.
Consider packaging service plans together so that you can add value to your business and, of course, consider raising your prices. Businesses often don’t raise their prices for fear of losing customers, however, you can often increase the demand for and the value of your services by raising the price.
Key #5 — Profit Margin
The objective of this final key is, “to increase the profits from existing revenues.”
Determine which services are the most profitable on an hour-by-hour basis. Services that do not cost much, but take a longer amount of time to accomplish or require more expensive materials, will not end up being profitable to your company in the long run. Additionally, increasing inventory dollars, automating and systemizing where your profits are stored, creating team incentives on margins and, finally, team training will all aid in increasing your profits.
According to Zimanski, the easiest way to increase your profits is to define your goals and write out a plan of action. Think with the end in mind. What is it that you want your company to achieve down the line? Focus on those things, commit to them and plan your actions around them.
Final Thoughts. As a starting point, Zimanski suggested thinking about each of these revenue-increasing strategies and focusing on three that will be the most important to growing your business. Set goals for these three strategies, and plan out what you need to do to accomplish each. Write out specific action steps that are needed to accomplish that strategy. Picking three strategies per quarter will allow you to best utilize your time and aid in increasing your profits. In addition, carrying out a smaller number of strategies at a time will also help you maintain your focus.
Remember the importance of getting your entire team involved with the system you create, and plan your strategy carefully as a means of achieving your goals quickly. If you do this, Zimanski said, chances are that, within a year’s time, your revenue will increase.
The author is a contributing writer for PCT and can be contacted at firstname.lastname@example.org.