In an era where the customer has more say than ever, it’s easy to get caught up in pleasing the customer. The customer is always right, after all (NOT).
But if you continually sacrifice on your bottom line to please customers, eventually you will end up bleeding money. This is a sure indicator you’ve forgotten one of the reasons you started a business. To make money.
If you weren’t in it at least partially for the money, you might as well have started a non-profit. At least then you’d pay less in taxes.
So, how do you increase profits in the age of review sites and customer loyalty programs? Keep reading to find out.
1. Make Long-term Arrangements
A customer comes in and buys that hard-to-sell high-ticket item. You’re happy, they’re happy. But they never come back again.
Selling single high-priced items or service packages might feel good in the moment. You have a sudden influx of cash and that’s great. But selling these kinds of services and items isn’t a sustainable business model.
If you can get your customers and clients to sign on for long-term services, you’ll have a more stable cash-flow. And the more clients you have sign on for longer, the more you can maximize your cash-flow.
For example, say you sell SEO services. You could sell one package at $300 that you complete in a month. Or you could offer a discounted $250 a month for three months at a time.
The first one is a one and done. The client could take what you give them and just head out the door.
The second one gives them the option of creating a relationship with you. They save some money in the long-run and you gain an opportunity at a more gigs from them down the line.
2. Increase Average Unit of Sale
When you go to a fast-food restaurant they try to convince you that more is less. Wouldn’t you rather get the fries and a drink with your meal for only 50 cents more?
When fast-food joints do this, they may be selling more for a little less, but they’re selling more. And while that seems obvious, it’s not. They’re able to buy in bulk and cook in bulk because they sell more per customer with the “meal” system.
You can do this too. Offer combo deals with your services. If you’re in SEO, offer a combo of links, content, and optimization reports. If you’re running an eCommerce clothing company, create deals around entire outfits rather than individual items.
If you can sell more clothing per customer, you can buy cheaper by buying in bulk. These products lend themselves to bulk buying. If you bundle your services, you spend less time getting to know new clients and more time servicing the ones you have. You save time and thus you save money and are able to bring on more clients.
3. Make Your Employees Your Marketers
The best companies reward their employees for bringing in clients. And this doesn’t just mean the employees who work in marketing. It means everyone.
Every person under your command should be tooting the company horn. If they aren’t, you’re probably doing something wrong. Why? Because the best businesses garner the passion of their employees.
With the advent of social media, everyone in your company can become a social media marketer. Offer incentives to people who bring in leads through their personal social media. Create awesome campaigns your employees wouldn’t miss out on sharing with their friends.
You have all the tools in your hands to create a massive marketing network. Even with a few people, you can reach a large audience. Even back in 2006, apps like Microsoft Messenger facilitated 6 degrees of separation from literally everyone else on the planet. Thus each of your employees is only six people (maybe less today) away from knowing everyone on the internet.
4. Diversify Your Client Base
If you’re in the freelance business, it’s tempting to stick with one major client who gives you a ton of work. But what happens if that client folds? You’ll be out of business.
Similarly, if your business relies on one type of customer, you could be similarly screwed if that demographic loses the ability to pay or the interest in your product.
Take hipsters, for example. In the mid to late aughts, hipsterism was the height of fashion. People started buying plaid flannel in droves. You could create an entire business out of selling leather work boots to men.
Today, visit Portland. Once the hipster capital, you’d be hard-pressed to find one person wearing flannel. The tides have turned. It’s now no longer cool to be a hipster and shuck the mainstream.
Any stores that were specifically selling to hipsters now see little business if any. Why? Because they didn’t diversify their customer base.
5. Streamline Everything
Just like your personal schedule, your business could always use a tightening down. Where are the screws loose? Where are there revenue leaks?
Using middle-men might seem easier in some cases, but sometimes it’s cheaper to do the job yourself. Are there too many layers between management and the customer? Sometimes you don’t need that extra layer.
In the obverse, are there tasks you or your employees are taking on that could be automated? If you automate processes employees are spending time on, you free up your employees to better serve the client or customer. The better your employees can serve the more revenue they’ll be able to bring in.