We would guess, yes you are? But how?
The problem with stagnant markets (i.e. verging on recessionary) is the amount of ‘talking down’ that goes on: don’t know about you but sales have taken a hammering, don’t get the support we need from the bank, and so on…
We would like to offer you a different perspective.
Profit is the difference between your sales and costs, ipso facto if you are going to increase your profits, you need to impact the £ value of either variable. In this blog post we are going to concentrate on sales.
There are three features of your sales that you need to examine:
- Price – the amount you charge for your goods and services
- Number of customers, and
- Number of times your customers buy from you in a trading cycle.
Price is straight forward, you can either leave them as they are or, increase or decrease the amount you charge. The same is true for numbers of customers and the frequency of their buying events with your business. What is interesting is the propaganda associated with price increases and the neglected area of sales frequency: getting your customers to buy more from you.
For example it may be possible to increase your prices, reduce the number of your customers and still make more profit. To achieve this apparently, impossible and unlikely transformation, you will need to focus on cross-selling: how can you tempt customers back to buy from you twice a week instead of once a week? (Or per month or per quarter the principle is the same.)
Perhaps you could consider offering a new product or service? If you increase prices and expect that you will lose customers, it’s likely that the majority of the customers you will lose are the ones that take up your time with complaints and never pay their bills on time? What is certain is that selling more to the customers who are loyal to your business will impact profit growth and likely out distance the negative impact of losing custom.
It’s always more productive to sell to existing customers, they know you after all… The trick is to find something to tempt them to increase their buying visits?
If you would like to discuss these issues in more detail and see how they could be employed to increase your business’s profitability, please call, any time.