How to Increase
Profits in Your Business
overhead by automating almost everything.
voice mail, ordering, fulfillment, customer service,
variable expenses by negotiating with suppliers.
If you're seeking
higher profits, you'll need your suppliers to reinvent
themselves too! The smart suppliers will be empowered
by your request.
variable expenses by redesigning (re-engineering) how
done/how the product is
produced. This should be a continual process and
second nature to you.
Increase productivity by expecting 50%-100% more from
really. THAT much
more.) And give them the best tools and training
needed to produce more, without stress.
Leverage your strengths by extending the product/service
If you can easily add
supplemental products or customized versions at the
same profit margin, your overall profit should
quarter, challenge your assumptions about your industry
company. Profit is
ALWAYS temporary. What keeps profits increasing long
term is staying in touch with an always-changing
Experiment with new ideas, new types of products and new
Invest 1% of sales into
making boo-boos, radical experiments,
intuitively-based decisions, think tank getaways --
whatever is beyond the 9 dots.
and hire only employees who continually impress you with
competence. Let everyone else go. Increasing profits
come from great employees, not average ones.
your customer service department into the R&D Department
What you need
to consider when dealing with customers
Following are the top ten
things any business needs to consider when designing
policies and procedures to deal with customers.
are not transactions!
While transactions are
important, when we confuse transactions and customers we
lose the leverage of the customer relationship.
relationships INTO your policies & procedures!
When we design an
organization, we need to consider how our policies and
procedures will ALLOW our employees to build customer
Transaction density is just as important as transaction
The more we can "do" for
our customers, the greater number of products and services
they purchase from our organization. If we increase the
number of options for them each time they purchase or use
our services, the likelihood remains that they will
purchase or use our services in greater depth each time
4. What is
our "share of life?"
Throughout the lifetime of
our customers, we will have the opportunity to share our
products and services with them. To the extent this
sharing is beneficial to both parties will indicate the
level of share we have the opportunity to gain. Over the
course of this sharing, our products will gain a
percentage of total sales in that category of our
customer's purchasing life. This is our "share of life."
relationships and margin through attitude!
Indirect benefits of
handling your customers as if their total purchasing
lifetime matters is the ATTITUDE of your enterprise. Even
if customers never return or purchase another thing, they
remember and pass on to others that attitude.
increases over a lifetime!
Studies have shown that
over a lifetime of a customer relationship, that profits
increase due to lower costs of acquisition and maintenance
in the relationship.
loyalty results from relationships!
Word of mouth advertising
constitutes roughly 55% of your total impressions that
bring customers to your business. As customer loyalty
increases along with lifetime value and share of life, the
ability of your enterprise to attract and maintain its
customer base increases customer loyalty.
value systems" increase barriers to switching!
The greater the
relationship that exists between your business and your
customers, the more your customers are invested in your
business. This investment increases the "switching cost"
of your customers to move to another brand. Due to the
simple attitude your business develops regarding "customer
lifetime value," your customers are "encouraged and
attracted" to doing even more business with you because it
is easier than training a new business to serve them as
value systems create leverage for employees!
When your employees
understand the concept of customer lifetime value, they
find it much easier to deal with problems associated with
customer relationships. Instead of dealing with the moment
they deal with the moment in the context of the lifetime
Lifetime Value means "money for nothing!"
The sheer force of a
customer relationship produces benefits to the business
through increased margin and benefits to the customer
through innovative ways to meet needs. This perspective is
win-win and offers momentum to the relationship that
creates opportunity for everyone involved!