Hey y'all,
Haven't been around in a while. Had a little reminder earlier today how important this forum has been to me when I was just starting out. Thought I would provide some value here for anyone who could use it. If you don't know who I am -- I guess the easiest way to explain it these days is I'm a private marketing consultant. The last three businesses have tripled their revenue in 6-8 months. Have recently launched some big online promotions as well. So there's some of my credentials.
I gave this presentation recently and received tons of comments saying it helped tremendously so here it goes... (p.s. I also attached the strategy guide that goes with it to help you implement)
For our conversation today, businesses generally have 3 phases.
1. Innovation (creating or finding a need to fulfill)
2. Proof of Concept (begging, borrowing, and stealing to acquire those first customers)
3. Leverage Growth (my specialty)
My focus is on number three because...
1. I am not very creative. I have never had a creative idea of my own in my life... I thought I did once but I was wrong then, too.
2. If you aren't willing to hustle to get those first few customers (even if it's your mom and your dog) then none of this will help anyways.
There are 3 (and only 3 ways) to grow any business:
1. Get more customers
2. Get them to spend more money
3. Get them to come back more often
What you'll find is that the leverage in any business is in #2 and #3. Because getting new customers is very difficult and very expensive. But selling your current customers more stuff and asking them to buy again is very easy and inexpensive (if not free).
The Business Revenue Formula:
(# of customers) x (average purchase price) x (annual frequency) = annual revenue
It sounds simplistic but you'll see if you can increase each of these numbers just slightly you can experience exponential growth very quickly. For example:
1,000 customers x $100 x 2 = $200,000/yr
Simple math (I like it this way)... let's say we are able to increase each of these by 10%
1,100 customers x $110 x 2.2 = $266,200/yr
In this case 10% + 10% + 10% = 33% increase in revenue... ahhh how I love exponential growth. So let's take it to the next level... Let's say a 33% increase in each...
1,333 x $133 x 3 = $531,867/yr (266% increase)
(Yes, I know 3 isn't exactly 33% increase but come on, work with me here, not against me ;-) )
"Great... So How Do I Do It?"
I'm glad you asked. I broke it down so you can implement 3 things for getting more customers, getting them to spend more, and getting them to come back more often...
(these are simple but I bet you aren't doing to the level you could be -- if at all... but no worries. I'm working with some huge businesses that did almost none of these when I walked in).
Getting New Customers
1. Ask for them (referrals)
Almost nobody asks for referrals. Sure, it can be scary. But if you deliver a great product/service you should say "hey, it means the world to me that you chose my business out of everything else out there... I'm just wondering... do you possibly know of anyone else who might like this stuff?"
Profound statement: You shouldn't be searching for the correct answers... you should be searching for the correct questions to ask.
If a business does sometimes ask for referrals they don't systemize it. Systemize your asking-for-a-referral process so it happens 100% of the time.
"How can I ask for a referral before, during, and after a sale in a cool way?"
2. Advertise for them
I don't know many start-ups that advertise to acquire customers. Mostly because "it's expensive" but the great thing about the economy being in the toilet is that advertising has never been cheaper. I have clients KILLING it in print advertising for 10% of what it normally costs. (Businesses are all scared to advertise during bad times... this is the BEST time to advertise)
On top of that Facebook makes it so easy to advertise right now it's ridiculous.
3. Acquire them (lists)
Whether you have a lot of money or a little money you can go to websites like infousa.com or SRDS.com and purchase lists that are your EXACT demographic. (It's scary how much they know about you)
Getting Them To Spend More Money
1. Raise Prices and/or Increase Profit
Almost no one ever thinks to test if their product would sell at a higher price point. The general rule of thumb is if there is little/no resistance to the purchase, you pricing is too low.
The other side is increasing your profit margin. Buying product in bulk, negotiating a cheaper price, better terms, whatever it is. Fight for every penny -- just like Walmart.
2. Upsells/downsells
If someone has purchased something from you, the hard part is over. Here is the key: offer them something IMMEDIATELY after the initial "yes" decision. Even if it's completely unrelated, on average 10% of people will buy it just because you asked.
Better yet, if you can offer a "do it for you" product/service or a "this process will go faster if you have..." you can probably shoot for 30-40% takers
Downsells is when there is price resistance. Where someone wants the product but doesn't want to/can't afford the full amount. Offer payment terms or a reduced cost. A promo I ran last week offered a downsell of splitting the payment in 2 and 20% of their sales were from this offer... I won't tell you the exact numbers but it was in the 10's of thousands of dollars in extra revenue for one promotion.
3. Add-on Sales
This simply refers to what goes along with your product? Accessories? Batteries? What can you sell with it?
Getting Them To Come Back More Often
1. Back end funnel
This refers to the upsell/downsell process. What products are your customers/clients going to need next... and after that... and after that... picture the guy buying the engagement ring for his girl... you know he's going to need a wedding planner, a cake maker, a deejay, etc. etc. -- you should be selling them all of these things or referring them to someone who will for a cut of the action.
2. Other People's Stuff
Sell competitors products. Yes. I said it. You bought MJ's book but you also bought Rich Dad, Poor Dad. If you are interested in a subject/hobby/thingy-ma-jigger you want to know everything about it and will buy all of the things. You could also be getting a cut for referring them.
3. Continuity
Monthly subscriptions, financed payments, annual, quarterly. Essentially look to grow your guaranteed income. The fun happens when your monthly accounts receivable pays for your expenses. Everything after that is trips to the Caribbean and a plane to visit me in Eastern Europe where the party never ends.
Conclusion
This is a lot of info to take in. I'm here for any questions you might have. Download the guide and it will help you implement these things.
Questions? Shoot.
Haven't been around in a while. Had a little reminder earlier today how important this forum has been to me when I was just starting out. Thought I would provide some value here for anyone who could use it. If you don't know who I am -- I guess the easiest way to explain it these days is I'm a private marketing consultant. The last three businesses have tripled their revenue in 6-8 months. Have recently launched some big online promotions as well. So there's some of my credentials.
I gave this presentation recently and received tons of comments saying it helped tremendously so here it goes... (p.s. I also attached the strategy guide that goes with it to help you implement)
9 Ways to Grow Your Business
For our conversation today, businesses generally have 3 phases.
1. Innovation (creating or finding a need to fulfill)
2. Proof of Concept (begging, borrowing, and stealing to acquire those first customers)
3. Leverage Growth (my specialty)
My focus is on number three because...
1. I am not very creative. I have never had a creative idea of my own in my life... I thought I did once but I was wrong then, too.
2. If you aren't willing to hustle to get those first few customers (even if it's your mom and your dog) then none of this will help anyways.
There are 3 (and only 3 ways) to grow any business:
1. Get more customers
2. Get them to spend more money
3. Get them to come back more often
What you'll find is that the leverage in any business is in #2 and #3. Because getting new customers is very difficult and very expensive. But selling your current customers more stuff and asking them to buy again is very easy and inexpensive (if not free).
The Business Revenue Formula:
(# of customers) x (average purchase price) x (annual frequency) = annual revenue
It sounds simplistic but you'll see if you can increase each of these numbers just slightly you can experience exponential growth very quickly. For example:
1,000 customers x $100 x 2 = $200,000/yr
Simple math (I like it this way)... let's say we are able to increase each of these by 10%
1,100 customers x $110 x 2.2 = $266,200/yr
In this case 10% + 10% + 10% = 33% increase in revenue... ahhh how I love exponential growth. So let's take it to the next level... Let's say a 33% increase in each...
1,333 x $133 x 3 = $531,867/yr (266% increase)
(Yes, I know 3 isn't exactly 33% increase but come on, work with me here, not against me ;-) )
"Great... So How Do I Do It?"
I'm glad you asked. I broke it down so you can implement 3 things for getting more customers, getting them to spend more, and getting them to come back more often...
(these are simple but I bet you aren't doing to the level you could be -- if at all... but no worries. I'm working with some huge businesses that did almost none of these when I walked in).
Getting New Customers
1. Ask for them (referrals)
Almost nobody asks for referrals. Sure, it can be scary. But if you deliver a great product/service you should say "hey, it means the world to me that you chose my business out of everything else out there... I'm just wondering... do you possibly know of anyone else who might like this stuff?"
Profound statement: You shouldn't be searching for the correct answers... you should be searching for the correct questions to ask.
If a business does sometimes ask for referrals they don't systemize it. Systemize your asking-for-a-referral process so it happens 100% of the time.
"How can I ask for a referral before, during, and after a sale in a cool way?"
2. Advertise for them
I don't know many start-ups that advertise to acquire customers. Mostly because "it's expensive" but the great thing about the economy being in the toilet is that advertising has never been cheaper. I have clients KILLING it in print advertising for 10% of what it normally costs. (Businesses are all scared to advertise during bad times... this is the BEST time to advertise)
On top of that Facebook makes it so easy to advertise right now it's ridiculous.
3. Acquire them (lists)
Whether you have a lot of money or a little money you can go to websites like infousa.com or SRDS.com and purchase lists that are your EXACT demographic. (It's scary how much they know about you)
Getting Them To Spend More Money
1. Raise Prices and/or Increase Profit
Almost no one ever thinks to test if their product would sell at a higher price point. The general rule of thumb is if there is little/no resistance to the purchase, you pricing is too low.
The other side is increasing your profit margin. Buying product in bulk, negotiating a cheaper price, better terms, whatever it is. Fight for every penny -- just like Walmart.
2. Upsells/downsells
If someone has purchased something from you, the hard part is over. Here is the key: offer them something IMMEDIATELY after the initial "yes" decision. Even if it's completely unrelated, on average 10% of people will buy it just because you asked.
Better yet, if you can offer a "do it for you" product/service or a "this process will go faster if you have..." you can probably shoot for 30-40% takers
Downsells is when there is price resistance. Where someone wants the product but doesn't want to/can't afford the full amount. Offer payment terms or a reduced cost. A promo I ran last week offered a downsell of splitting the payment in 2 and 20% of their sales were from this offer... I won't tell you the exact numbers but it was in the 10's of thousands of dollars in extra revenue for one promotion.
3. Add-on Sales
This simply refers to what goes along with your product? Accessories? Batteries? What can you sell with it?
Getting Them To Come Back More Often
1. Back end funnel
This refers to the upsell/downsell process. What products are your customers/clients going to need next... and after that... and after that... picture the guy buying the engagement ring for his girl... you know he's going to need a wedding planner, a cake maker, a deejay, etc. etc. -- you should be selling them all of these things or referring them to someone who will for a cut of the action.
2. Other People's Stuff
Sell competitors products. Yes. I said it. You bought MJ's book but you also bought Rich Dad, Poor Dad. If you are interested in a subject/hobby/thingy-ma-jigger you want to know everything about it and will buy all of the things. You could also be getting a cut for referring them.
3. Continuity
Monthly subscriptions, financed payments, annual, quarterly. Essentially look to grow your guaranteed income. The fun happens when your monthly accounts receivable pays for your expenses. Everything after that is trips to the Caribbean and a plane to visit me in Eastern Europe where the party never ends.
Conclusion
This is a lot of info to take in. I'm here for any questions you might have. Download the guide and it will help you implement these things.
Questions? Shoot.
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