Posts Tagged ‘Growth’


Work Your Biz Wednesday: 6 Reasons Why You Should Contact Your Customers

The most valuable thing in any business is your existing customers. Here are 6 reasons why you should contact them from Melinda Emerson, the Small Biz Lady.


Mondays with Mike: Boost Your Revenue with Recurring Fees

While some of us derive great satisfaction from the role our business plays in the community, the services we offer our clients, and the rewards of having built a successful business from scratch, we’re all – at the end of the day – concerned about growing our company’s revenue.   In order to keep the lights on and pay the staff, we have to bring in money, and it seems like we need a little more if it each year.   One of the most effective methods I’ve found for managing and increasing revenue is by converting customers to a recurring fee plan. 

Here’s how it works:

Say you’re in the office equipment repair business.  Your average visit costs $200, and you visit each of your customers an average of twice per year, for a total of about $400 annual revenue per client per year.  If you were to offer an annual service plan, billed at $40 per month, you would be providing a solution that benefits both your company and your clients.  You give your clients predictable expenses, alleviating the stress of funding the entire cost of a repair all at once.  You get the benefit of predictable revenue.  You can count on the monthly payment and bridge the gap that slow months can create, and at the end of the year, you’ve brought in $480 per client, increasing your overall revenue. 

Makes sense, right?  Now here’s why it works:

In addition to establishing consistent expenses and income, there’s another key benefit.  Once you’re no longer billing for the service itself, you have new motivation to operate as efficiently as possible.  Your new goal won’t be increasing billable hours, but will be doing every job quickly and properly.  You know that poor quality work will end up costing you more in the long run, so you provide the best service possible the first time.

Stocksy_txpd093e56ePf2000_Small_27507Skeptical about your customers’ willingness to commit to a contract?  Think about gym memberships.  Millions of people pay $29 monthly for a gym membership they seldom use.  They sign up (usually in January,) go regularly for a little while, and by the time they stop using the gym, they’re so used to the monthly debit that they don’t even notice it.  Sure, some members will cancel, but others will not.  Once your clients are used to the monthly premium, they will cease to think about it.  You’ve gotten them accustomed to a steady-as-she-goes expense that lands in your bank account each month.

Think that your business won’t support a recurring fee structure?   Think again!  Nearly every business has an aspect that can be transformed into a regular fee cycle.  If you own a candy shop, you can sell monthly subscriptions with seasonal offerings available exclusively to your subscribers.  They get special treats, and you get regular revenue.  Own a bookstore?  Offer an annual reader rewards card with a modest fee that entitles customers to exclusive events and special discounts.  Challenging yourself to find ways to reward customers for committing to you in the form of a recurring fee can – if managed properly – yield both steady income and consumer loyalty: a magical combination.


Why Your Business Is Asking All The Wrong Questions

Stocksy_txp6e171103c53000_Small_17064Many entrepreneurs start a business because they have an overwhelming passion around a certain interest. They want to help people accomplish a stated goal. A problem develops in growing their business because they continually ask the wrong question:

“I wonder if my exciting idea can help other people?”

This question is entrepreneur-centric and does not revolve around what the customer wants. Just because a person is passionate about an idea and its solution does not mean that people will pay for it. This is the biggest mistake entrepreneurs make when they try to convert a hobby to a business. They have a dream that they want to earn a living doing what they love. This is a result of a misinterpretation about the feel-good directive that an entrepreneur needs to be passionate about their work. While this is true, a better view is that an entrepreneur needs to be passionate about what the customer wants them to do. Therefore, the better question to ask is:

“I wonder if the customer has the money to solve a pain which I am excited about?”

This question focuses on what the customer wants, not what the entrepreneur needs. The customer cares only about solving their problem, not the passion of the entrepreneur. The answer to this question is the core of what any business needs to focus on. Customers always buy painkillers before they buy vitamins.

Other wrong questions to ask:

  1. Would this product help your company? Again, most prospect will say yes as not to confront or embarrass anyone. Unfortunately, this may not reflect the action they would truly take. Instead ask: What would it be worth to your company if I could fill this need (resolve this pain)? With this question, the entrepreneur establishes what the customer wants and the monetary value of solving their need.
  2. Are you interested in buying the product? Most prospects will simply say yes because they want to be agreeable and not seem negative. What prospects say and what they do are two different things. Instead ask: Where can I send your order? This is an assumptive close and pushes the action to now. It will also immediately raise any hidden objections.
  3. When should I contact you again? Most prospects will give a date in the future and then never respond again. Instead ask: Should I contact you in the future? If so, what will different then as opposed to now? This gives the prospect an ability to say no so time is not wasted in the future. This also self qualifies them for another call and gives insight into what is holding their purchase back now.

What questions are you asking? Are you really listening to the answers?


Why It Was Good That Shaun White Lost

Shaun+White+Portrait+Session+ElxITyhEXx9lLike small business, the Olympics don’t always work out the way they are planned. One of the poster athlete’s for Sochi Games is Shaun White who basically put half-pipe snowboarding on the map. He won the gold medal at the last two Olympics. He was supposed to be a repeat winner this year. After he arrived in Sochi, he pulled out of the slope style event because he thought the course was too dangerous. With all the pressure now on winning the half-pipe event, he lost and came in fourth.

While I cheer Shaun White’s decade of success, it’s good that he lost in front of millions of people. Here is why and what you can learn from it:

Things don’t always go as planned. Even with endless hard work and preparation, sometimes you just lose. Similar to White, the course may be rough (the market) or the other athletes (competitors) may be better that day. No athlete or company can control all the conditions. Every small business owner needs to get used to not knowing what will happen. There are no sure things in sports or business and this pushes everyone to work harder.

Even the favorites lose. No matter how dominant your business may be in the market place, you won’t always win. You have to earn a victory each time you compete and not mail it in. While White’s competitors were well qualified, no one would have predicted 15 year old, Ayumu Hirano from Japan would win the silver. The favorite has to work just as hard and the rivals always have an opportunity to win.

How you lose counts. White did not let this one loss define him. He said, "I don't think it makes or breaks my career, one night;" he never blamed the course or the other competitors. After his failed run, he agreed to celebrate with Swiss Gold Medalist Iouri Podladtchikov (IPOD).

The best push the rest. The top dog gets everyone to improve until they get beat. This is good for any competitive market because in the end, the customer (or viewer) gets a better product or service. The best business always gets pushed by other companies that want to be them.

What will White do next? Looks like he is going to dust himself off and compete in 2018.


Mondays with Mike: The Tier Method for Increasing Revenue

A disclaimer of sorts:  This method of boosting revenue is intended for entrepreneurs who own businesses that are already making a little money.  This strategy can help you look down the road if you’re just getting your business up and running, but the method I describe in this article is intended for established businesses, rather than those just starting out.

More money.  It’s an appealing prospect, but it’s not always easy to achieve.  One of the most versatile solutions I’ve ever found is the tier method, and it’s successful because it’s such an elegant and simple strategy. 

Here’s how it works:

Your business is established, and you have a good product, but you’re looking to increase sales.  The answer is simply to create additional, higher quality (and higher priced) offerings. 

Let’s look at some examples:

  1. ????????????????????????????????????????You own a restaurant, and you’ve found success with your weekday, prix-fixe menu.  Folks love coming in and selecting three courses for a set price.  How do you step it up?   Add on the option for wine pairings for each course (with an additional fee, of course.)  You’re adding an additional tier of services that will entice your existing customers.
  2. If you own a cleaning service and have regular customers, but need a way to get more from them, create tiers of service.  Your existing contracts – let’s call that your Silver Service – is offered at the current price.  You add Gold Service with additional services – periodic window cleaning or carpet shampooing, as well as Platinum Service – where you clean everything that doesn’t move.   You’ll inevitably find some clients who want to step up to a better plan, and your new clients are likely to settle for the option in the middle, so you’ll be starting them at the Gold Service – it’s your new default setting, complete with higher price tag.
  3. You sell original artwork, either online or in a brick and mortar store.  Your customers love your work, and you decide to offer additional options.  Your first tier is the watercolor painting – the work your clients know and love.  You offer one option of adding a frame, and a second option of high quality mats and a custom frame.  You’re adding tiers of service that save your clients the time they’d have to invest in selecting the perfect frame that shows off your valuable artwork.  

Why is the tier method so successful?  You’re starting with an established brand – a product or a service that your customers already trust and enjoy – and you’re offering a better version of that product.  We all want the best, and we’re conditioned to think of selecting the least expensive option as settling for less than the best.   Airlines make bank on pricier seats in first class.  People pay extra to buy iPhones with more memory than they’ll ever use.  If you offer your customers pricier options, it is inevitable that some of them will take you up on it.

The key here is to offer authentically better options.  We’re not talking about smoke and mirrors  — playing games with your clients is a tactic that can alienate loyal customers.  Rather, you want to develop tiers that are meaningful and offer additional value that’s appealing to your customers.  You’re finding a way to enhance your existing high quality offerings by creating options with added benefits to your clients and added revenue for your business. 


Why Big Leaps Are Dangerous to Your Business

??????????????Most small business owners think they have to take giant risks to be successful. They reason that the greater the risk, the bigger the reward. This is common wisdom since when a success story gets publicized, no one hears about all the interim steps that were taken to get to the final result. No one sees the up, down, and sideways paths it took to reach that goal.

Forget the giant risks. It is much safer and ultimately more effective to make a small decision, examine its result, and learn what you can from it. Then make another decision based on that outcome. Think of each small decision as another piece of completing a puzzle. Never pin the future of a company on one decision, action, or resource. “Go big or go home” or “playing for all the marbles” may make a good slogan, but it has no real place in business.

Here is what to do get the most out of each new opportunity:

A huge customer: Downsize expectations. Start with small sales goals. No matter how big the opportunity or how famous the brand, keep the excitement in check. While you may not want to treat them like just another customer, assume sales will build very slowly over a longer period of time.

The next employee: Be realistic. On any team, a new player can have an impact, but typically this takes time. Before hiring, find out if the prospective employee truly has demonstrated what they can do in the job. Having previous experience at a competitor or a large brand-name company may not translate to success at your business.

The next product line: What have the initial customers said about the product? How can it be rolled out to a small release to ensure it works as expected? Have these initial customers paid for the product, and what real results have they accrued as a result? Most products take time to be adapted by the marketplace. This also usually only happens when supported by a substantial marketing budget.

The next consultant: No matter how good their experience is, one person cannot make a huge impact immediately. Start the consultant with a small scoped project with stated goals. At the project’s completion, match the goal against the actual results. If the outcome is positive, do a second project and build scale from there.

The next market change: Test, test, and test. Do this before a large investment is made in project development or a big marketing expense rollout. Have you really identified a pain in the market from people who can pay to fill it? This is only demonstrated by paying repeat customers (and referrals) and not with what prospects say when you survey them. Many people will say yes when surveyed, but few will say yes when you actually ask them for money.

The next competitor: What a customer substitutes for one product is constantly changing, so it’s difficult to keep up. Know everything customers do with the same money they use to buy your products or services. Keep up to date on all these competitors, and track where they are making their largest investments. As Chinese general Sun Tzu said, “Keep your friends close and your enemies closer.” 


Work Your Biz Wednesday: 6 Tips to Better Crowdfunding

Crowdfunding is a great way to raise money for a small business. Find out how to get started from The Small Biz Lady, Melinda Emerson.


Are You a Fake?

a-penguin-imposterMany small business owners suffer from the imposter syndrome. They feel that their customers or employees will find out "who they really are" and lose confidence in their ability to run the company. This fear holds many people back from displaying who they really are at work. This becomes a problem in the transparent world of the Internet where "being human" and authentic are highly valued by customers.

Customers buy from who they believe, like, and trust. Without being authentic as a leader and a company, this will never happen and it will become impossible to build a profitable company. Here is what to do:

1. Tell the truth. This is more difficult than it first seems in small business. Most owners have good intentions, but sometimes are afraid to disclose to employees and customers what is really happening. How to be authentic: Focus on the companies strengths. Always deliver good and bad news in a timely fashion. Don't be afraid to be humble and show personal or company warts. Build a culture of openness and frequent communication. 

2. Stick to the brand. Many times, companies want to be everything to everybody. This leads to telling the customer that the company can do things that they really can't. This leads to frustrated employees, disappointed customers and an unprofitable businesses. How to be authentic: Determine the exact customer segment served and the pain solved. Get clear on what the company cares about. Stay focused on delivering outstanding results in this niche area.

3. Hire employees that want to be part of the company's culture. Too many times, owners hire a person to fit a particular job. They rush into a decision and don't understand how that person would work in the overall company culture. How to be authentic: Hire for attitude over skill. Think about how the new employee will complement the rest of the team. Have team members give feedback on prospective employees.

4. Be consistent. Too many times, the company's brand does not match it's culture. The friendly company persona contradicts the cut throat office atmosphere. The boss is sometimes an angel and other times an ogre. How to be authentic: Live the company brand. Be the same person inside and outside the office. Be the same in front of managers, staff and customers. Have no hidden agendas. Set an example by practicing whatever is preached.

Are you authentic? How do you demonstrate it? 


Work Your Biz Wednesday: How to get More Likes on your Facebook Fan Page

Find out ways to boost your Facebook fan page engagement and build your brand online with the C-Q-H-L approach from The Small Biz Lady, Melinda Emerson.




 
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