Often when we talk about increasing profits, we talk about getting more customers, building your list, raising your conversion percentage. While those things are important, they are not the only way to make more money in your business.
What if I told you that you can increase the amount of money in your business bank account without adding a single new customer. Would you be interested?
Of course you are. Here are my three steps to increasing your business profit margin.
STEP ONE: HOW MANY ARE YOU LOSING?
I'm willing to guess that you know (and hopefully celebrate) how many new customers you convert each month. But, do you know how many customers you lose? To get this number (especially if you sell one-time products rather than a monthly membership program), you need to know what constitutes a “lapsed” customer. The first step is to think about the buying cycles for each of your customer segment. How long does a customer need to go without a purchase to be considered a lapsed customer? Is it 3 months, 6 months? a year?
Once you've decided which of your customers have lapsed, create an irresistible offer to bring them back to you? Can you offer a free strategy session, maybe a free gift send in the mail “just because”. What can bring you back top of mind?
STEP TWO: LEVERAGE TECHNOLOGY
Are you spending most of your time in your Income Producing Activities (IPA's). When I first start talking with clients about this, they notice an immediate improvement when they get serious about making the most of their time. The trouble is it is very easy to backslide.
One way to stay in your IPAs is to leverage technology to automate and systematize your business. I save hundreds of dollars a month in VA and admin costs because I use Infusionsoft to automate most of my business. If Infusionsoft is not in your budget yet, you could achieve the almost the same result by using Get Response for Active Campaign for automated e-mail communications
STEP THREE: KNOW YOUR NUMBERS
I know, I know… I am obsessed with numbers. I think that numbers are the most important part of your business (and not just because I used to be an accountant). I see too many of you either ignoring your numbers completely or turning them over to a bookkeeper and not thinking about them again until tax time. Trouble is, if you don't keep track on a monthly basis, you can end up with nasty surprised at the end of the year.
Plus, the most effective way to increase your profits is to understand every single expense in your business. Pay very close attention to your marketing budget, is it delivering results, or are you paying for services that you are not using to their full potential. Do you really need that subscription? This is the time to be brutal – if it isn't delivering cut it out and keep the profit.
What are your favorite methods for boosting profits?