Let them know you love them!

Last time we talked about using a referral system regularly and with persistence to get new clients, but do you know the easiest and quickest way to increase your annual profits by between 25 -95%? Read on, but before I let you in to the secret, here’s some recent research:

·    Firstly, if you improve your client retention by just 5%, your profits can increase by between 25-95%.

·    The average business loses 50% of their clients every 5 years!

·    The same study found that it costs 6 or 7 times more to gain a new client than to keep an existing one

·    Two thirds of clients surveyed separately said they didn’t feel valued by their supplier.

So by now, you’ve probably guessed my secret to increasing your profits. Keep in touch with your clients. Create a system to follow up with them regularly, so they’ll be more likely to buy from you more often, and as an added bonus you won’t have to spend as much on marketing to replace the clients who’ve decided to go elsewhere. Result: a big increase in your profits for a very low investment

Let’s face it, very few clients will wake up in the morning thinking of you and your business. It’s nothing personal; they’ve undoubtedly got many other things to think about, and actually it’s not their job to follow up with you, it’s yours. Woody Allen once said that 80% of success is just showing up at the right time, so regular contact shows you’re still around and ready to do business. So don’t be over cautious, be persistent with your message and assume your clients are interested in what you have to tell them unless they tell you otherwise.

So here are a few ideas to get you started:

·    How about sending an email to all your existing clients thanking them for their business over the years and telling them of your plans to make your relationship even stronger?

·    Or you could ask them to tell you what areas of their business they feel could be improved or changed. Have a look at http://www.surveymonkey.com , you can quickly and easily create an online survey which your clients can complete. Great feedback for you, and your clients will know you really care about improving the service you give them

·    And this works equally as well for potential and new clients. After all, people just don’t see you as a great business after the first contact. It takes time for them to get to know you and to be confident you’re going to deliver on your promises. By getting in touch regularly with them, giving them information , case studies and examples of how your business has worked successfully with others, you’re building credibility and making them much more likely to consider you over your opposition when they’re ready to buy.

And finally, ask yourself this: How many of the businesses you buy from keep in touch with you on a regular basis? I’ll bet the big nationals you deal with do, but I’d be equally sure that most of your smaller suppliers don’t. So if you really want your business to stand out from the herd, then you know what to do... Keep in touch!

The easiest way to get more clients

Last time we looked at ways to make it as easy as possible for a new client to start doing business with you and we explored the value of each new client to your business over the lifetime of your relationship with them.

But how, I hear you say, do we get more clients to talk to in the first place?  That’s a question asked at some point by every business throughout the world.

The more expensive options range from media advertising to exhibitions to direct mail and telemarketing and yet the most cost effective and arguably the easiest way to get in front of new clients is often overlooked. I'm talking about a systemised process that guarantees a steady stream of “warm” prospective clients - a referral system. 

We all know that “word of mouth” is a powerful tool for any business. You go out for a great meal, you tell your friends about it, and hey presto they’re on the phone to the restaurant booking a table for next weekend. That’s a referral system in its most basic, random form, but still very powerful, wouldn't you agree? The restaurant owner’s got some new clients and he’s not had to spend a penny on marketing or special offers. If he continues to provide great service and great value, how many times will those clients come back and how many other people will they tell?

From that one random “word of mouth” referral, his potential earnings can be substantial. So what if you could actually create a system that would take the randomness out of the process, and by doing so create a regular stream of prospective clients?

So here are some ideas to get you started:

·    First of all wouldn’t it be interesting to calculate what the effect of a referral system on your business could be? For example if you have 500 clients and each of them gave you an average of 1 referral per quarter that’s a massive 2,000 potential new clients a year.  Of course some clients either won’t or can’t refer you but there again others may well be able to give you more referrals, the key word here is “average”

·    Make sure that everyone on your team buys in to the project, and understands the growth 

      potential for the business and as a result, of course, the increase in their job security!

·    Use a referral form or voucher system with a script so you can standardise how you approach every single client to ask them to refer their colleagues to you. If you want to know more about this then send me a message.

·    And finally, be persistent.   Make sure that every client gets a reminder every quarter by way of a form or more vouchers, that way they’ll always remember to recommend you when the time is right.

And remember, if you keep on doing the same old things, you’re going to get the same results. So why not try something new today?

Make them an offer they can’t refuse.

How easy do you make it for a new client to start doing business with you? Developing any new relationship is difficult, but once that relationship is established, then given your delivering great value, great service and the outcome your clients expect, they’re going to keep coming back for more, aren't they? So really it’s about getting over that first hurdle, making it as easy as possible for your prospects to convert into clients, so you can build a long term relationship with long term profits.

Because for most businesses, a substantial amount of their profits will come from those clients who keep coming back and buying again and again over the years, so getting them to buy from you in the first place is critical, and you need to get them to that point as quickly and as painlessly as possible.

As a starting point, if you knew what a client was going to spend with you over the term of your relationship, then you’d have a good idea of how much you could afford to spend in acquiring that client, wouldn’t you? If you knew, for example, that your average client stayed with you for 3 years and spent £500 with you 4 times a year, and if you also knew that your Gross Profit margin was say 50% , then the “Lifetime Value” of that average client would be:

£500 spend x 50% gross profit x 4 purchases per year x 3 years = £3,000

So, if for every new client you acquire you’re going to make an average £3,000 gross profit, then what’s it worth spending to get them on board in the first place?  If it cost you £1,000 then you’re still well ahead of the game, but actually you don’t need to spend anything like that amount. All that’s required is to make that first purchase so easy, so instinctive, that your prospective client just can’t say No!

First off, you could just reduce your price by 50% for the initial sale, so your cost of acquiring that new client becomes £250 in our example. Simple, but in my opinion, not very effective. Yes it’s going to be very attractive to your prospects,  but they may well expect similar discounts on future purchases , which is something to be avoided at all costs!

How about something a little more inventive? Why not take that £250 cost of acquisition, and use it to add value to the original offer? You could spend some of the money on more product or service and give your prospects twice the quantity on their first purchase. Or you could use some of the money to buy complimentary products or services and bundle them up with yours to create an attractive high value package.

And of course, now you know what you have available to spend to acquire a new client, you could invest that money in your marketing system or even pay it out to your sales people as increased commission. That would get them focused, wouldn’t you agree?

Feel the Force

Hopefully you've given some thought to the three questions I asked on yesterday’s blog? Remember there are only three ways to grow your business, and provided you focus on each one with purpose and with persistence, you will see significant growth.

As an example let’s have a look at a fictional Beauty Salon. It’s well run, well established, and the owners regularly focus on those three key growth drivers (must have a good accountant!)  They know that currently they have 1000 clients spending an average of £25 each visit and making 6 visits each year.

1000 clients x £25 spend x 6 visits = £150,000 income per year

What if they could find a way to increase those three key numbers by just 10%? That’s not a massive increase but let’s look at the effect on their income.

1100 clients x £27.50 spend x 6.6 visits = £199,650 income per year

That’s a 33.1% increase in overall income, from a mere 10% increase in those three key areas. Imagine if you could do that year on year, what kind of success could your business achieve in the next 5 years?

So let’s look at each of those three key growth drivers in more detail, but before we do, let me ask you this. Do you think of the people who buy from you as Clients or as Customers?

To contrast the two terms, here at BW, in keeping with, I imagine, every other firm of  accountants in the world, we have Clients. What that means to us is that we have a duty of care, to be a trusted advisor to our clients, and to protect and look after their best interests. Based on those principals we can build a long lasting and mutually rewarding relationship

Compare that with for example your average mid-sized outlet in the Trafford Centre. Their sales staff will generally be more focused on the product than the purchaser, and will view the transaction as a one off. In other words they have Customers.

But isn’t it interesting how the large multiples, your Tesco’s, Sainsbury’s and the likes, are now bending over backwards to look after us all?. Loyalty cards bring us back to the store time and time again, but they also give the company valuable information about our buying habits and our preferences.  They’re even trying to get us to eat our veg, for goodness sake, presumably so we’ll all be around longer to continue that “mutually rewarding relationship”!

So, many of the biggest and most successful retailers in the country are looking at us differently now. They may still call us their Customers, but aren’t we actually their Clients? And is that perhaps something you can take on board in your business?

The Magic Wand

Give most business owners a magic wand and they’d wish for three things.  Firstly they'd want more clients, secondly they'd want to make more profit and thirdly they’d want more cash in their bank accounts. In other words GROWTH!

But where to start to achieve sustainable growth? It’s quite a daunting prospect for most businesses especially if things have stalled and there’s no obvious way to get them going again. But as somebody once said, if you want to eat an elephant, you have to start with the first bite sized chunk!

So let’s start with some of the stuff I’ve touched briefly on in previous blogs, and look into them a little more deeply. All the strategies I’m going to talk about in the coming weeks are designed with one aim, to help you maximise your sales your profits and your bank balance! We live in a world of opportunity; the challenge is to turn that opportunity into success.

First of all, hands up anyone who knows how many ways there are to actually grow a business. 100 ways, 500 ways, 1000 ways? Actually there are only three ways to grow a business, 1. Increase the number of clients, 2. Increase the average sale per client and 3. Increase the number of times clients come back and buy from you again.

It's as simple and as difficult as that,but at least if there are only three areas you need to concentrate on, and you  make a decision to work hard on each of those three areas, then eventually you’re going to get good at this stuff and your results will reflect that.

Have a think about this tonight.

·        How many clients have you got at the moment?

·        What’s their average spend each time they buy from you?

·        How many times a year do they come back and buy again?

If you have that information available then you’ve already got a great platform to grow your business, if not then make it a priority to find those numbers and  put a system in place to measure them at least once a month.

Simple Stuff That Works

As opposed to Complicated Stuff That Doesn't

Making more profit doesn't have to be complicated. It's about getting the basics right and above all it's about taking action, because ultimately if you don't "just do it" who will? So we're going to focus  on the stuff that works, that's affordable, and what you can do right now to make a real difference your profits and your enjoyment.

But to set the scene, did you know that in the UK alone, there are around 4 million small businesses of which 95% employ under 5 people, and that overall they contribute 50% of the UK's GDP? This country relies on entrepreneurs who've  seen an opportunity and had the courage to take action and it will continue to do so because every year in this country  around 500,000 people start new businesses.

And we've all heard the incredible success stories, Virgin, MacDonald's, Apple and Microsoft, all these world class businesses started as home based or one unit entities whose owners had the vision and the drive to build something really special.

Of course the flip side is that many businesses fail, in fact almost 75% within the first five years of their existence. And I'll bet that for the vast majority, the one fundamental cause is that the owners just didn't have the skill sets to run a business in the first place, and they didn't have the time or the inclination to acquire them. As Michael Gerber says in his book The E-Myth, being a good technician doesn't mean you're going to make a good entrepreneur. In other words being a great plumber doesn't necessarily qualify you to run a plumbing company, does it?

But the good news is that the skills you need to build your business are acquirable. You can learn how to  be successful in your marketing, how to control the growth of your business by having good systems, and how to manage your finances successfully. And those are the things we're going to be concentrating on here.

Measure and Grow

What you can measure you can improve.

Every business is made up of processes that convert inputs and outputs. If you want to improve your profits then it's important  you identify your key processes and do everything you can to improve them, so that you get more output from every input.

Key processes can include:

• How many sales leads (inputs) are converted to sales (outputs)
• How many first time customers (inputs) become repeat customers (outputs)
• How may customers (inputs) give you referrals (outputs)
• How many units of raw material (inputs) it takes to make a finished product (outputs)

There are loads more but you get the idea. So look closely at each process in your business, decide which are the really important ones and then work hard on coming up with ideas to improve them. And once you've identified these key drivers in your business then measure them, accurately and regularly, so you can see the effect of your improvements.

It's all about focus really. Owners who get into the habit of regularly focusing on and adjusting the processes that really matter in their business invariably succeed, but in our experience they're few and far between. One very effective tool that we use to help our clients do this is the One Page Business Plan. It's part of our Profit Builder process, have a look at it here

http://www.brackmanwolfe.co.uk/profit-builder

Every month we offer two Profit Builder sessions, worth £650 each, to existing and prospective clients on a first come first served basis. These sessions are completely free of charge, so if you really serious about growing your business follow the link above.