In the last post we talked about the first secret to building a solid customer service plan and how to decide what your vision is.
Today we’ll talk about the second secret in taking your satisfied customers to raving fans. You must know what your customers want. Know who your customers are and you will know better how to serve them. Demographics are really important here. An upper-class woman in her 30’s is going to have completely different expectations than a working class man in his 50’s.
There are four main areas you need to consider and plan when figuring out what your customers want:
Listen to Your Customers
Ask Your Customers Sincerely
Offer More than Just a Product/Service
Know When to Ignore Them
These are all important when deciding what your customers want out of their shopping experience.
Listen to Your Customers
You need to listen to both what they say and what they don’t say. Customers may say they want one thing and really mean something else. For example, if you customers are begging for lower prices, you may find out their real priority is quick delivery.
Also, listen to your “silent” customers. These are the customers don’t bother to complain because the service is so bad they’ve just given up and don’t feel like their voice matters. They feel unwanted and when a competitor shows up, they’ll be gone.
Lastly, you need to listen to customers who only reply with “fine”. These customers are similar to the “silent” customers in that they are so used to bad customer service they only give a monotone response.
Ask Your Customers Sincerely
If you aren’t sincere when you ask their opinion, they are going to see right through you. You may be thinking, “What about the customers who aren’t saying anything?” You need to ask them sincere questions that get them thinking about their experiences. Make them feel like you really care, and you should!
Offer More than Just a Product/Service
Your customers are looking for much more than a simple product or service, they are looking for an experience that makes them feel good. They gauge every step of the process with a value. When you take this into consideration and treat them like people, they will feel like they belong.
Know When to Ignore Them
You may think this goes beyond providing good customer service, but in reality you can’t give them everything and someone people you will never make happy. You have to set limits and stick to them. If your vision and company don’t meet the needs of the customer, they will be best suited somewhere else.
These are the steps and tricks to figuring out what your customers want and how you can use them to work on your customer service vision and plan.
If you get stuck, try ourGUIDED TOURand let us help you through the process.
In the last post we talked about the first three of the 7 specific areas you need to consider in your franchise prototype process. Here are all seven again:
These 7 areas will fine turn your plan for the ultimate level of success. Today we are going to cover the last four.
Think of constructing your business model like planting a tree. At first, it’s so small and weak you wonder if it will even make it through the night. But you keep watering, fertilizing and nurturing it. Your ideas will grow the trunk and each of these strategies will extend out as the branches of your now strong tree. Finding the perfect support staff, employees, vendors/suppliers and other relationships will make your tree flourish with leaves and flowers.
The way you structure your management team is not only essential to your growth, but the happiness of your employees and, ultimately, your customers/clients. This strategy is results-oriented and doesn’t depend on the people, but the actual system that’s in place.
A management strategy is, in short, a set of standards that include goals, rules, a mission statement and other concrete things that tell your employees how to act, your management how to grow your business and your customers/clients what to expect.
These should all be in perfect alignment with your business goals.
You need to put together a people strategy that shows your employees how you feel about their job performance and dedication to your business. They also need to understand “why” they are doing specific tasks. This helps them to personally connect to their job which in turn leads to better production and a happier workplace.
There are a number of strategies you can use to keep it interested at “the office”:
Performance Incentive Programs
Contests that reward high performance
Employee of the Month
These are just a few of the ideas you can use. One of the best ways to appreciate your employees is by calling a meeting and asking them how they would like to be rewarded. Think about it for a while and put the best strategy into play. Keep it fresh and change up the strategy you use from time to time to keep your employees guessing. Once they get used to the prize, it’s time for a whole new approach.
You need to build a community within your company. There needs to be support, appreciation, and respect. The more “at home” an employee feels, the better they will perform and the higher their level of loyalty.
Marketing is, of course, essential to the success of any business, but it also must work cohesively with the other strategies you’re using. There are two major pillars of a successful marketing strategy-the demographic and psychographic profiles of your customers.
The psychographic tells you what your customers are the most likely to buy and the demographic tells you who they are, which can help you learn why they buy specific items. Without this information it simply doesn’t matter how good your business prototype is.
There are three types of systems in every business:
Hard systems refer to inanimate system or systems that have no “life”. Soft systems are those that could be living. Information systems which are, of course, everything else, including customer data, product information, financial…anything with data and numbers.
The most important of all three systems is the soft systems because it includes the sales systems your business uses. In your sales system, the two keys to success are: structure and substance. Structure being what you sell and substance being how you sell it.
All three systems are essential to the success of your business and while they all have their own very specific roles, they all must work together to get the job done. This also goes for your entire business development program.
I want to take a moment to recap on the ideas we went over through the business develop lessons.
An entrepreneurial myth, or e-myth, is an assumption that anyone can succeed at business with:
Projected a targeted profit
There are essentially three key roles that need to be filled to set your business up for success:
The four different stages of a business life cycle are:
There are a few things we are going to talk about:
Business Format Franchise
The Franchise Prototype
Franchise Prototype Standards
There are three main areas of business development:
7 specific areas you need to consider in your franchise prototype process. Here are all seven again:
We can help you work through all of these areas and give your business a jumpstart that puts you ahead of your competition right from the start. Use ourGUIDED TOUR and work with one of our coaches, plus gain access to a wealth of tools and resources.
Today I’m going to talk about the life cycle of a business and how to get the most out of each cycle while also extended the lifespan of your business.
The four different stages of a business life cycle are:
We’ll talk a little about what each of these cycles means and how they can each help expand your business’s lifespan.
This is generally considered the technician’s phase, which is the owner. At this point, the relationship between the business and the owner is that of a parent and new baby. There is an impenetrable bond that is necessary to determine the path your business will follow.
The key is to know your business must grow in order to flourish. You cannot stay in this stage forever.
In this stage, you need to start bringing your support staff together to delegate to and allow growth to happen. The first line of defense is your technical person as they need to bring a certain level of technical experience. This cycle really belongs to the manager though. The planning stage needs to start and a relationship should be built with the entrepreneur to plan for the future.
There’s a point in every business when business explodes and becomes chaotic. This is referred to as growing pains. It’s a good problem to have, but a problem nonetheless. You are often faced with a number of choices:
Avoid growth and stay small
Push forward into the next cycle
The last cycle is maturity, though this doesn’t mean the end of your business. Your passion for growth must continue in order for your business to succeed. You need to keep an entrepreneurial perspective in order to push your business forward.
You see how all three of these cycles are connected and depend on a strong foundation for each one of them for your business to be and continue to be successful. All three of your key roles must also work together to work through these cycles.
If you’re having trouble putting together your business life cycles and figuring out which of the key roles you fit into, try our GUIDED TOUR and work with one of our amazing coaches.
Chapter One from my book, “45 Minute Business Breakthroughs,” to download a copy of the entire book you can do that HERE
Let’s face it. The major hot button for most small businesses these days is the ability to generate leads. All small businesses want more leads, but few of them know how to successfully attract customers to their business.
As a coach, I have in-depth knowledge and skill when it comes to generating leads. So here’s the process I use to do this.
If you’re like 99% of the business owners I speak with, you may often feel lost or overwhelmed as you try to navigate through all the various options available these days. Websites, social media, SEO, email marketing, Facebook, pay-per-click and so on.
Let me do you a favor right now and completely remove that overwhelm from your life forever. Are you familiar with the 80/20 rule?
For business owners, it means 20% of what you do every day is generating 80% of your total annual revenue.
In other words, you’re only doing a few things daily that makes you most of your money. I can tell you specifically what makes up that 20%, and that’s all you really need to focus on after today.
There are 5 areas that make up that 20% – leads, conversions, transactions, pricing and profits.
I’m going to be focusing on just 2 or 3 of these 5 areas, so you can imagine what you could actually generate revenue-wise if you implemented all 5 areas.
In fact, let me show you what’s possible, and why these 5 areas are so critical.
I use a tool called a Profit Growth Calculator. Do you by chance know the exact number of leads and sales you’ve made over the past 12 months?
No! That’s OK… let’s plug in numbers for a make believe business. Let’s say your business generated 1000 leads in the past year… and your average conversion rate was 25%.
Let’s also say your customers bought what you sell 10 times throughout the year… and they typically paid on average around $100 per purchase.
Finally, let’s say your profit margin per sale is only 25%.
Notice at the bottom that you’re earning $62,500 annually. But, look what happens if we simply increase each of these 5 areas by a meager 10%.
You would see your annual revenue almost double from $62,500 to over 6 figures. By the way, that’s the ballpark most business coaches play in… the 10% increase range. Nothing wrong with that either, believe me.
Most business owners would KILL to almost double their revenue, wouldn’t you agree? Now, watch what happens if you could increase each of the 5 areas by 50%.
Your business would skyrocket from $62,500 to almost half a million dollars annually. Now, you may be thinking 50% gains in each of these 5 areas would be next to impossible. Let me assure you, a 50% increase is child’s play, and I’m going to prove it to you right now.
When asked, most business owners tell me “word of mouth”, or more often than not “referrals”, are how they generate leads. Referrals are obviously an excellent lead source. In fact, it may be the best one by far, but the problem is you never know when you will get them. They’re not reliable and you certainly can’t generate them whenever you want.
99% of businesses today do have a website. Do you know for sure how many leads your website generates every month? Do you know for sure how many sales your website produces every month?
Can I show you why your website isn’t generating leads or closing sales for you? In fact, would you like for me to give you the deeply hidden secrets that the marketing gurus DON’T want you to know?
Here’s the key to successful marketing. You MUST be able to enter the conversation taking place in the head of your prospects. Or, another way to look at it is to be able to address the number one question on your prospect’s mind at just the right time. So how do you do this? It’s actually quite simple when you know and understand the fundamentals of marketing.
The conversation that’s taking place in EVERY prospect’s mind revolves around two major points. There’s a problem they have, and they don’t want… and there’s a result they want but don’t have.
Now believe it or not, there is actually a marketing formula we follow that takes these two points into account and spits out a message so compelling it practically forces your prospects to buy what you sell.
It’s called the Conversion Equation, and it looks like this – Interrupt, Engage, Educate and Offer. The Interrupt is your headline – which means it’s the first thing someone sees when they visit your website, read any of your marketing collateral, or hear you speak. When someone asks you what you do, it’s the first words out of your mouth. That’s your headline… and it MUST address the problem your prospects have that they don’t want.
The Engage is your sub-headline – which is the second thing your prospects see or hear. It MUST address the result your prospect wants but doesn’t have. The Educate is the information you provide… either verbally or in writing… that presents evidence to your prospects that you and your product or service are superior in every way to your competition.
Unfortunately, MOST businesses aren’t different from their competitors, and that’s why you MUST innovate your business to create what we refer to as a market-dominating position.
You MUST make your business unique… it MUST stand out from the crowd. It MUST make your prospects say to themselves that they would be absolute idiots to buy from anyone else but you – regardless of price. And finally, the Offer. You MUST create a compelling offer that makes it so irresistible your prospects can’t turn it down.
But, here’s another critical fundamental of marketing. Because of the saturation of marketing messages these days, most prospects have become numb to most marketing.
Following our Conversion Equation can dramatically overcome this, but even with this powerful tool in play, it will still take multiple “touch” points before your prospects will buy what you sell.
For most businesses today, it takes anywhere from 20 to more than 100 touch points before a prospect makes their buying decision. Following the Conversion Equation reduces the touch points to somewhere between 5 to 12 points of contact.
But here’s the key… most businesses don’t follow up with their prospects at all, and this provides a HUGE window of opportunity for ANY business that does follow up… to position themselves as the dominant force in their industry.
But, in order to have the opportunity to get your message in front of your prospects 5 to 12 times, you MUST find a way to collect their contact information, and that’s the purpose of your Offer.
Most businesses offer something that only appeals to prospects we call NOW buyers – prospects ready to make an immediate purchase. Unfortunately, NOW buyers make up less than 1% of the total number of prospects that are in the market to buy what you sell.
These businesses typically offer prospects a free consultation, a discount, a coupon, a free assessment, a complimentary quote, or the biggest mistake of all… CALL US!
For most businesses, all of their marketing material… their website… their business card… all list their phone number as their sole offer… and that ONLY appeals to that 1% of NOW buyers. The remaining 99% of viable prospects are “investigating” and gathering information about what you sell.
They’re searching for information because they want to determine who is offering the best value. You see, prospects DON’T shop price – they shop VALUE!
The only reason prospects consider price is that most businesses don’t give them any other value proposition to consider except price.
Remember what I said a moment ago about making your business unique – creating a market-dominating position?
Most businesses don’t do that, and since they… and all of their competitors… look exactly the same, prospects are FORCED to shop price. So, with these fundamentals in mind, let’s see how your website stacks up to them.
Let me show you a website we just revised for a child psychologist so you can see what I mean… and then let’s take a look at your website as a comparison. Here is the child psychologist’s original website.
This is typical for this profession, and 99% of his colleagues’ websites look EXACTLY like this. Notice the generic headline – Parenting Advice and Resources from Dr. John Smith.
He has to have a headline like that because he’s attempting to be all things to all prospects. Basically, this doctor helps parents deal with adolescent problems. Look at the 9 areas he services – emotionally disturbed kids, behavioral problems, teen pregnancy, peer pressure and so on.
So, let’s compare this site with the fundamentals we just discussed. First, you MUST create a market-dominating position. This doctor could actually create 9 of them by simply positioning his specialty in each of his 9 individual areas of treatment.
For example, let’s say he decides to start with the top condition on his list… emotionally disturbed kids. These are kids that yell, scream and constantly have a highly belligerent attitude toward their parents. They scream at them and are known in some cases to threaten the parents. These kids can’t be reasoned with and these poor parents have NO clue how to deal with this situation.
So, here’s what this doctor needs to do. Forget the website completely – this doctor needs what we call a squeeze page. This is a single page that’s online and specifically addresses ONLY this one condition. So, what should this page look like… and what should it say?
Remember the second fundamental – you MUST enter the conversation taking place in the head of your prospect. There’s a problem they have they don’t want… and there’s a result they want but they don’t have. This is where we implement the first two components of the Conversion Equation… Interrupt and Engage. The headline is the Interrupt and it must address the problem they have and don’t want.
Here’s the squeeze page we created for this doctor that did that.
Notice the headline – Are You Sick and Tired of the Yelling, Screaming and Belligerent Attitude of Your Child? Does that address the problem these parents have and don’t want? Would you say that’s a 100% bullseye?
Now, for the Engage which is the sub-headline. It MUST address the result they want but they don’t have. Notice it says – Now You Can Discover the Secrets to Controlling Your Child and Instantly Restore Peace and Quiet in Your Home. Would you say that’s bullseye number two?
Now, let’s look at the third Conversion Equation component… Educate. In the doctor’s original website, because he’s trying to appeal to all prospects, his video said this – “Greeting parents. I want to welcome you to remarkable parenting. You will find tons of great information here with hundreds of pages of articles.”
Think how ridiculous this sounds if I’m one of these parents with a kid that has a belligerent attitude. Do I want to read hundreds of pages of articles? Or, am I searching for a specific solution to a specific problem? Do you see why most websites these days are basically a total and complete waste of money? They don’t address the things your prospects are truly looking for. Here’s the new script we created for this doctor.
“As a parent, are you struggling to gain control of your child’s attitude and emotions? Is your child yelling and screaming at you, while often displaying a belligerent and sometimes threatening tone that no matter what you do or try… you just can’t seem to get under control?
My name is Dr. John Smith, and I help parents like you every day learn the techniques that will solve these frustrating and destructive behavioral patterns once and for all. In fact, let me prove it to you. Enter your first name and email in the box to the right, and I’ll send you a series of 60-second techniques that will immediately restore peace and quiet in your home.”
Think that just might get more prospects to respond to this message? And that brings us to the final component of the Conversion Equation… the Offer. Look at the doctor’s original offer. It was for a free consultation. The only prospects that will accept that type of offer are those NOW buyers. Remember, they’re less than 1% of the total number of prospects looking for this type of help.
When your offer is to “call me,” that basically says “let me sell you” to your prospects. We are so used to getting non-stop sales pitches these days that we resist calling anyone with every fiber of our being. Most people won’t answer their phone unless they recognize the caller ID. This type of offer is called an incentive offer, and incentive offers only work for common purchases, emergency situations and impulse purchases.
And remember, most prospects don’t buy until they have been exposed to your messaging somewhere between 5 to 12 times. If you tell prospects to “call you,” and most won’t, how do you keep marketing to them? Obviously, you can’t. The secret to effective marketing is to offer what most prospects truly want… INFORMATION!
Look at the last sentence in the child psychologist’s video script… “enter your first name and email in the box to the right, and I’ll send you a series of 60 second techniques that will immediately restore peace and quiet in your home.” That offer is ZERO risk to a prospect, and it offers them something they truly want… a solution to their problem.
They can receive it by simply providing their name and email address… WITHOUT having to speak to anyone… or be subjected to any type of sales pitch. That’s why the offer on this doctor’s squeeze page says, “Learn the Secrets to Gaining and Maintaining Complete Control of Your Child in Less than 60 Seconds.” Is that a highly compelling offer that would appeal to a majority of the prospects directed to this page?
And do you now see why we call this a squeeze page? There are NO navigation buttons on this page to distract the prospect. In fact, there is only ONE action they can take… enter their contact information. Otherwise, they have to close the page completely… and if they do, THAT is when we can redirect them to the doctor’s main website to see if there is something else that might grab their attention.
That informational offer provides them with proof that this doctor can actually get them the results they’re looking for, and then within that information is an offer for them to schedule a consultation with the doctor, which they are now more likely to do.
But consider these numbers for this doctor’s original website. He could easily generate 300 or more leads per month using a pay-per-click campaign on Facebook. Those leads are then sent to his original website. He will then average around 10% of those leads… or 30 prospects… will see his offer for the free consultation and will call to inquire about it.
Notice I said INQUIRE about it, NOT request it. Out of that 10% that will call… only 10% of them will actually consent to the consultation… which equals 3 prospects.
Fortunately, for most professionals like this doctor, they typically convert 100% of the prospects they get in front of… so those 3 prospects will more than likely become patients. Note that out of 300 leads, the doctor winds up with 3 new clients. That is the national average today – 1% of all leads generated will typically convert into a new client. That’s pathetic!
But, now let’s look at the doctor’s new squeeze page. First of all, let’s leave his number of leads at 300 per month. That squeeze page won’t impact that number whatsoever. But let me ask you this and give me your open and honest opinion.
Do you think this new page will increase the number of prospects that will request this doctor’s secrets to gaining and maintaining complete control of their child? The doctor was getting 10% with his old site. What percent do you think would request this new, more compelling offer?
Most responses I get average somewhere between 50% to 70%. Well, suppose we stay really conservative and say that just 20% request the new offer.
That would mean 60 prospects would receive those secrets and actually see for themselves that this doctor’s methods really work.
And once they do, what percent of those do you think might request the consultation with the doctor? Remember, that originally it was just 10%.
Again, most responses I get average between 50% to 70%. I would tend to agree with those numbers, but we know he originally converted 10%, so to be really conservative, let’s just leave that conversion rate the same… 10%.
So, out of the 60 prospects requesting the doctor’s secrets, 6 of them now request the consultation. And let’s assume like we did originally the doctor converts all 6 of them into patients. That’s an additional 3 patients per month, isn’t it?
Now, let’s say this doctor only charges $800 for his services, even though in reality it’s typically 3 times that amount. $800 times 3 new patients is an additional $2,400 per month… which is an annual increase of $28,800. That’s obviously a dramatic increase in revenue considering we’re being ridiculously conservative… and all we did was make some slight changes to this doctor’s site.
So, let me ask you this. Do you think we could get similar results for your business? How many leads have you generated in the last 12 months?
How many leads would you estimate you’ve generated this month? How many of those leads requested your offer? If we could create a similar process for your business… and offer compelling information to your prospects just like we did for the child psychologist… do you think more prospects would respond? By what percent?
Could we conservatively agree that a 10% opt-in rate is easily a no-brainer? Do you realize just that one change alone would double your current sales revenue?
And that’s assuming we don’t increase your number of leads or your final conversion rate… which we will. If you said your last month’s revenue was $25,000… then just this one change alone adds an additional $25,000 to your bottom line.
In a recent case study I conducted, I found $58,000 in additional annual revenue just using this one simple strategy.
But consider this!
That additional revenue is NOT just a one-time increase. That’s revenue the business will generate year after year after year.
And… $58,000 in additional annual revenue increases the valuation of that business somewhere in the range of $150,000 – $200,000.
This article was taken from my book, “45 Minute Business Breakthroughs,” to download a FREE copy of the entire book you can do that HERE.
If you would like to explore other options of how I can help you take your business and your life to the next level, find out more about my one-on-one coaching programs by clicking HERE
Another option to consider is our online business coaching program. The E-Learning Marketing System is the most powerful and dynamic do-it-yourself client attraction program ever created. It was designed to give every small business owner unrestricted access to the tools, resources and support they need to build whatever size business they want. Check out our FREE Guided Tour to find out more about the E-Learning Marketing System by clicking HERE
Get a FREE copy of my Marketing Strategies e-Book for ideas that you can implement immediately into your business! “More Leads – Joint Ventures” is one strategy outlined in the book, which I’ll share here as well.
Do you currently have any established joint venture partnerships?
JV’s involve two or more businesses who decide to form a partnership to share markets or endorse a specific product or service to their customer base… usually under a revenue share arrangement. The key to creating successful joint ventures is to find partners who service the exact same type of clients that need or want what you sell.
Let me give you an example and I’ll use one we’re both familiar with… a florist. One of the most financially lucrative product lines for a florist is providing flowers for weddings. The average floral bill for a wedding often exceeds $3,000. But what we discovered about florists is they fall into what we refer to as an “event chain.” An event chain simply refers to a series of businesses that customers purchase from in a specific sequence.
For example, a wedding will never take place until an engagement ring is purchased from a jeweler. So jewelers are at the forefront of every wedding chain. Once the young lady accepts that engagement ring, this event chain kicks into high gear. First, this young lady knows EXACTLY where she wants to get married, so number one on her agenda is to book the church, chapel or synagogue where she wants the ceremony held.
Second on her list is to line up her wedding planner. Weddings today are a really big deal, and often women like to use the services of a professional wedding planner. Next up, she wants to secure the venue for her reception.
She knows most venues book out months in advance, so locking in that venue is high on her priority list. After that comes the wedding dress, so she begins the search for the perfect dress at an affordable price.
Next is our florist. The bride-to-be will want to begin selecting her floral arrangements for both the wedding and the reception. Then after the florist comes the wedding cake… the printer for the invitations and thank you cards… and depending on the financial ability of the bride to be, she may also be interested in hiring a limo… a DJ for the reception… a travel planner for the honeymoon… the hotel… catering and so on.
This event chain is typical of this industry. And for the florist, it specifically identifies a multitude of potential and very lucrative JV partners. But here’s why this becomes so important.
Every business ABOVE the florist has the potential to ENDORSE and SEND prospects to the florist. Unfortunately, the florist has NO control over that flow of prospects. Every business above the florist controls the JV relationship, so it’s critical the florist create such a compelling offer and relationship with these businesses that they feel obligated to send prospects their way.
But here’s what’s even better. The florist controls the prospect flow to ALL the businesses BELOW them in the chain, and by establishing specific processes and procedures to make sure their customers use those businesses, the florist can negotiate compelling offers with those business owners as well. So consider these numbers.
Let’s say this florist cultivates a JV relationship with at least one of each business throughout this entire chain. Staying ultra-conservative with our estimates, would you agree this florist… since they have NO control over the flow of prospects from these businesses… is it likely they could obtain at least ONE referral each month from just one of the businesses above them?
OK, would you also agree conservatively that since the florist controls the flow of prospects to the businesses BELOW them… that they could easily send at least ONE referral to EACH one of them every month? Keep in mind these are VERY conservative estimates we’re using here.
Since the average floral bill for a wedding is $3,000… then just ONE referral per month from those businesses ABOVE the florist increases their annual revenue by $36,000. Now let’s consider the businesses BELOW the florist where the florist controls the referrals. Let’s start with the wedding cake maker.
The average sales price for a wedding cake is also $3,000, and the florist could easily negotiate a 10% referral fee. So, just a single referral per month produces an additional annual increase of $3,600 for the florist.
Now consider the printer. The average sales price for printing is $1,000, and the florist again could receive a 10% referral fee, so that single referral per month produces an additional annual increase of $1,200.
If we stop there, this florist has just increased their annual revenue by more than $40,000… and that’s using ridiculously conservative numbers. Imagine if you continued to add up the revenue produced by all the additional referral fees the florist would earn from all the other vendors in this chain.
This same process holds true for businesses that aren’t in a chain. But just like the florist, they simply identify partners who service the exact same type of clients that need or want what they sell. Now I realize this looks easy, but it’s not… and here’s why.
You not only have to properly identify who would make an excellent joint venture partner for your business… but you also must determine the order to approach each one… how to approach them… and when to approach them. It’s critical you do this properly or you wind up burning through all of your potential JV partners and come out with nothing in return.
Let me ask you a quick question. Just off the top of your head, how many potential JV partners would you estimate might be a fit for what you sell? Would you believe that I could identify more than a dozen for your profession? So conservatively, how many referrals would you estimate might be possible if a dozen other businesses were compelled to refer their customers to you for additional purchases?
Conservatively, let’s say you only get 3 referrals every month that buy from you. That’s less than one per week. How much additional revenue would that add monthly? Now multiply that by 12 to see your annual revenue increase.
One more thing before we move on. Remember earlier we discussed the critical importance of creating a highly compelling informational offer that would promise so much value to prospects that they would knock your door down to get it?
Suppose the florist offered this informational offer in their marketing, “5 Things Every Bride Should Know to Avoid Disaster on Their Wedding Day”. This offer would place TONS of prospects into their drip campaign and result in a tremendous increase in sales. Those new sales can then be referred to their new JV partners and they collect multiple referral fees every month.
This would absolutely dwarf the revenue we just uncovered for the florist in this example. What I find really exciting about JV’s is this is a strategy I help my clients implement immediately… and it begins generating instant cash flow for them right out of the gate.
In a recent case study I conducted, I found $75,000 in additional annual revenue just using the JV strategy.
And again, that’s revenue that business will generate year after year after year.
$75,000 in additional annual revenue increases the valuation of that business somewhere in the range of $225,000 – $300,000.
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As a business coach and marketing strategist, I work with small and medium size businesses that have little or no money to spend on markeitng. I show them how to generate all the leads they can possibly handle without spending any extra on marketing or advertising.
One of my focuses is to look at existing marketing and dramatically reduce your existing spend while significantly increasing your response rate. I aim for a 2-10X increase in response rate, but 50-100X is not out of the question.
If you’ll invest 45 minutes with me on a video call, I’ll show you how I can find at least $10,000 inside your existing marketing. I’ll show you how to get it and I’ll show you how to put it in your pocket.
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I was recently working through some marketing strategies with one of my coaching clients and we got onto the topic of pricing. She really wanted to make a push to increase her sales in the short term and wanted to decrease her prices and have a sale as a promotion.
I told her that I didn’t think that it was a good idea. There are better ways in which you can offer your customers more value with different strategies such as bundling. But first I wanted to walk her through the numbers to show her why I didn’t think a sale was her best option.
Unfortunately I haven’t always seen it this way and have made similar mistakes with my own companies in the past. But now that I’ve worked through the numbers and see the math, I definitely focus on other marketing strategies.
I’ll spend some time in other articles to talk about different strategies, but for now I’m going to walk through the steps I showed her that explain why I don’t like the idea of using a sale to add value to your customers.
The real key to success in marketing is to offer more value than your competition. Prospects will pay twice the price if they believe they’re receiving four times more value. Unfortunately, most businesses in a vain attempt to increase their value begin to offer discounts, and that often destroys their margins.
Would you believe me that in some businesses if they discount their price by a mere 10%, they now have to sell 50% more just to break even?
Let’s look at an example:
If you sell a widget for $100, and you have a 30% profit margin, you make $30 for every widget you sell. That means your cost basis for that widget is $70. If you discount that widget by 10% and sell it for $90 instead of $100, your cost basis is still $70. Now you are only making $20 in profit instead of $30.
For this business to make $1,000 in profit selling their widgets at $100 each, they would need to sell 33.3 widgets ($30 X 33.3 widgets = $1,000). But by discounting their price 10%, now they need to sell 50 widgets ($20 X 50 widgets = $1,000). They now have to sell 50% more widgets just to get back to their original profit margin. (33.3 X 1.5 = 50).
But consider this… when was the last time you saw a business offer a measly 10% discount? Most of the time they offer 20% to 40% discounts… and wonder why they are going broke. And to add even more bad news on top of this already bleak scenario, did you know that the latest research shows that discounting doesn’t actually impact a prospect’s buying decision unless that discount is for 40% or more?
So what about increasing prices?
Most small businesses have NEVER raised their prices. That’s because they don’t know the facts when it comes to increasing their pricing. They’re scared to death that ANY price increase, no matter how small, will lead to a mass exodus of all their customers. But is that really true?
Let’s use the same scenario as before. You are selling your widget for $100 and decide to increase that price by 10% to $110. Will that small increase REALLY lead to a loss of customers? Honestly, I believe a few will leave, but they are most likely your biggest price shoppers that show NO loyalty or patronage to your business anyway. They are the ones that beat you down on price every chance they get, and the moment you begin to make a decent profit, they will leave you in a heartbeat for the next business willing to accept a financial beat down. But even though there will be some customer attrition… to what extent? Let’s look at the numbers.
Their business is now making an additional $10 per widget… All of which is pure profit. Right there, that’s a 33% profit increase. For their business to make $1,000 in profit selling the widgets at $100 each, they needed to sell 33.3 widgets. But now, by increasing the price 10%, they only need to sell 25 widgets.
That means just to BREAK EVEN, they would need to LOSE 25% of your customers over a measly 10% price increase… and that simply ISN’T going to happen!
Want to know the closely guarded secret that successful businesses don’t want you to know?
STOP Discounting!!! Instead, innovate your business so you offer more value than your competition and increase your prices.
Of course, if we were working together we would need to perform a thorough price analysis on your business and determine the most lucrative price increase for you, but this is definitely a strategy I strongly recommend to all of my small business clients to help them increase their revenue. There simply is no FASTER or EASIER way to generate additional revenue.
After working through these numbers my client made the decision to increase her prices rather than have a sale and decrease them. So far, along with some other marketing strategies we applied, it is proving to be the exact thing she needed to do for her business.
Once you know and understand these and the other marketing strategies I teach, it’s just a matter of getting it all implemented in a timely and efficient manner to watch your business explode!