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These people had become all consumed in their work and the hours had crept up along with the late night telephone calls. When they weren’t at work they were thinking about work. When we looked back at why they got into their own business, almost 90% of them said it was to have a better lifestyle, more time with their families, more freedom and flexibility. When we asked if they felt they had achieved it, only about 18% had.Most of them were still struggling to find any work, life balance and felt that the business would fall apart if they were not there. You can just imagine the last time they went on holiday…In some cases, it was years.Obviously you didn’t get into leadership or owning your own business because you didn’t feel that your life had enough stress or problems in it. Nor were you desperate to get less sleep, less freedom, less sex and ultimately less life…NO, “I bet you didn’t” which is why if you use a simple mathematical equation you can turn your business into a customer generating machine.Hot tip. The absolute first thing you want to do is to eliminate the word ‘cant’ and other similar negative words from your vocabulary. Be totally honest with yourself and get your team to do the same. Replace the word ‘cant’ with ‘wont’, yes, I can do it but I won’t do it. End of story.Create a culture with no negativity, only positive speak and positive self talk.So, let’s take a look at how using basic mathematics in 4 different ways will give you explosive growth in any climate or market.1. Get more customers of the type you really want You have probably come across the loyalty ladder at some stage in your career. It is a tool which helps you identify who your target customer is along with what your current customer looks like and their behaviours. Contacts are anybody you come into contact with who are not yet ready to buy your products or use your services.A lead is generated through a point of contact or evidence of wanting to become a prospect. They are still in the research stages.A prospect is somebody that you have identified as a potential customer. You creating a direct chain of communication with them, to ensure that when they make their buying decision they choose you.A customer is somebody that you are actively working with or that has just purchased one of your products.The clients can be suppliers that you work with or a person’s product you sell on their behalf.Supporters will endorse your product or service if asked, but they will not go out of their way to promote you.Advocates are normally past customers and clients, that become raving fans of your business and send you lots of referrals. The difference between a supporter and an advocate is that an advocate will go out of their way to promote you and your products.If you have not already done so, you need to do an audit to identify who your current customers are. Identifying what your ideal customer looks like.You could create a check list or even a profile of your favoured customer, which would include details like their age, gender, where they live, what income bracket they fall into, along with how often they have purchased your goods or services. From these questions, you can determine what their lifetime value could be to your company.Here is a quick example: Let’s say you own a pizza business and your average sale is $30.00.Let’s break it down over a number of visits:1 visit = $30.00 1 visit per month = $120.00 Over 12 months = $1440.00 Over 10 years = $14,400.00Then think about if they introduce one referral person every year that spends the same amount as they do:1 referral in year one = $1440.00 1 referral over 10 years = $14,400.00If $14,400.00 wasn’t enough, double that on one referral which equates to $28,800 and that is just with one referral.Now you have a true picture of your customer’s potential contribution to your business. Are you going to treat them like a $30.00 customer or like a $28,800 customer? Obviously you are going to treat them like a star client.Working this out not only helps you measure the potential growth opportunities out of your existing customer base, it also helps in a training capacity with your staff. You could even start a motto that every customer is a $28,000 customer, setting some service expectations down that you would expect if you were going to walk into a store and spend the same amount.The other benefit of working this equation out is that you can refine your customer base. If you know who your best paying and most desired customers are then you can go to work trying to attract them. You now have the basis for all of your marketing and relationship building ideas.By the way, did you know that if you use the word ‘client’, you can lose up to 80% of your customers. Keep it personal…Hot tip. Pray all you like, but move your feetIf you haven’t already then you will want to conduct an analysis of your customer data base. This will give you the analytics you need to make choices around how to manage your customers for the best return.If you don’t have a database, you are running the race in the wrong direction. Basically without an active, working database, you are bleeding potential income.Once, you have carried out your database audit you want to categorise your customers. The ‘A’, ‘B’, ‘C’, ‘D’ system is a quick and effective way of doing so.The ‘C’s’ are an essential part of your business as they are often the bread and butter.Once you have carried out your analysis, decide on who is going to manage each group of customers.The business owner should not spend their time dealing with the C customers. If it’s appropriate you can delegate to management. As the leader or owner you need to spend your time nurturing your ‘A’s.”A’s’ -The A’s are the big players, these are your strongest customers who are worth the most referrals and repeat business to you. The desired action with an ‘A’ is to give them ‘WOW’ factor service. To make them feel like they have a personal relationship with you and your brand.’B's’ -Your ‘B’s’ are your middle ground. They are a great source of steady revenue, but haven’t yet turned into you’re ‘A’ class customer. That doesn’t mean there is not potential for them to become an ‘A’ customer.Often the ‘B’ can move between the ‘A’ and the ‘C’ at different stages throughout their dealings with you. The appropriate action here is to work alongside them to help them become an A customer, but remember to spend the bulk of your energy, time and money on your ‘A’s.”C’s’ -The bread and butter of your business, they don’t set the world on fire and may be sporadic with their visits. They have no particular loyalty to you and your products.This doesn’t mean they don’t have the potential to move up the scale, but you want to get the best return on your investment today.Make sure these customers get ongoing communication around the company and products, so that they keep you at top of mind awareness.’D's’ – These customers are generally dissatisfied no matter how hard you try to please them. They drain your time, your staff’s time and can often be abusive to your team at the same time as bad mouthing your products in the market place. The best action to take with these customers is to politely delegate them to the competition. It is definitely, a win/win.2. Get your customers back more oftenOnce you have discovered who your favoured customer is, the next step is to create a plan to get them back more often. This can be achieved in numerous ways e.g. through product promotions, bulk advertising, direct mail or newsletters.Alternatively, if we are aligned and in harmony with customers needs and wants right now, which you have to be in a changing consumer world. You will already know that the most effective way to get your favoured customers to return is to build a personal relationship with them.Create a burning loyalty and desire to interact with your goods or services. You want them to feel a positive emotional response when they hear your name.You might be interested to know that the emotional brain processes information 80,000 times faster than the thinking brain. This is why we do some things automatically. A good example would be walking or even driving. The reason that this is important when communicating with your customer is explained in the following sequence.Event Automatic thinking That causes an Emotional response That causes ActionEvery time you communicate either directly or indirectly with your customers, you are creating an event that will end with an emotional response. The emotional response will either call them to action now or in the near future, or move them away from wanting to act with your products and, or services.When I attended a seminar recently one of the speakers was presenting on building preferred customer relationships. He was the owner of a medium sized business and he liked to have a personal interaction with his top customers. He wanted them to know he thought they were important.He was going to the Bahamas with his family for a 2 week vacation and before he left, he had his personal assistant order 500 postcards on line from the Bahamas. Once they arrived, he had his personal assistant write this message on every postcard.”Dear………..I am sitting on a beautiful beach in the Bahamas enjoying a vacation with my family. This morning over breakfast I thought of you. Can we make a time to catch up when I arrive home in 2 weeks? I will have my PA call you to make a time that works for you.Have an outstanding day. Signed………..”He signed all of the postcards and on his arrival in the Bahamas he mailed them to his top 500 customers.What do you think happened as a result of his efforts?That’s right; he had a full diary for the next month. Now, you might say his job is not to sell. In many cases you are right, but he saw his job as providing the best service possible for his customers by giving them his personal attention, so that the salesperson they were dealing with could ensure they maximised the profitability of each customer.The point is that with very little effort on his part, actually the only effort required was to sign and post the postcards, he was able to make 500 customers feel really special. They would not have known that another 499 people also received the same postcard.Just think about the referral opportunity here. Everybody reads a postcard, when people come to visit you at home and you have a postcard on the fridge, they read it.You may not want to do this yourself, but you could pass the suggestion on to the key account representatives or the customer service representatives in your business.Another quick suggestion is to always hand out 2 business cards to every person. The reason is simple, if you hand them one, chances are it will end up in the rubbish. If you hand them 2 one will still end up in the rubbish, but the second one normally gets kept.Companies are often looking for the next advanced way to wow their customers, but there is no point doing the big wows if you aren’t consistently doing the little WOWs.Hot tip. Business is won on the little WOWs, just like your success is determined by the little decisions you make everyday.Think small baby steps when you are training staff. Don’t start with the big stuff, they will get confused and miss the importance of the small details.If you don’t have an in-house training team, then access external resources. There are so many training companies around today that can assist you in training your people no matter what industry you are in.There is no excuse for lack of knowledge today. If all else fails try Google. I almost wonder when Google is going to start doing online degrees. The knowledge that is available on Google or even Yahoo is more knowledge than you could possibly know what to do with.The first time I was asked to run the strategic planning process for a company, I had no idea what to do. I set about asking people I knew that could help me. Their feedback and instruction was vague and they were not able to break it down for me. As soon as I went to Google, I was flying.There was everything I needed to know in one place. From a day of research, I was able to put together a pretty good format for the day, creating some good structure around the desired outcomes.Since then it has become important to learn as much as I could about strategy. I have researched how many top companies manage their strategic planning processes. Some good, some not so good. I have and do adapt the style to suit every customer, but without Google, the initial introduction to strategy could and would have been a disaster.Give your staff a topic and an hour to research as much as they can on a topic. Then ask them to present it back to you or through their manager present it to their group. The more knowledge somebody has, the more confidence they gain and the better off your customers will be as a result.It’s actually really simple. If you are the specialist in your field (which comes through knowledge,) you can expect people to pay more. They will happily do so, because they know they are receiving the best advice or the highest quality product in the market place.Remember at the beginning of this section, you read about how business growth is a matter of basic mathematics. This is a primary example of that.Whatever you do, don’t let your business bleed away easy money. This happens when your team doesn’t have the systems and measurable processes in place to follow up with your customers.Hot tip. If you fix the follow up, you fix the businessIt is exactly the same with your team. If you don’t have a training programme which makes sure they only learn good habits and practises, so they actually get to act them out repetitively, over the first 21 days, then you are unnecessarily throwing money down the drain.If you don’t have an in-house training department and you want to try a quick exercise with your team, you could use this example. As a matter of fact, anybody can use this example to drill down into who their customers are and how to get them back more often.This is a 3 step group exercise where you would break people up into groups of 3 or 4 (this number works well because it encourages everybody to have a say.)You will be breaking into groups 3 times for 15 minutes each time, you may want to change who is in each group every time to ensure that you capture all of the ideas across the entire group.Task 1 (in groups)Ask and write down these questions on a white board1. Where do our customers currently go throughout their day? 2. What new ways are they spending their time? 3. How can we find new ways to connect with them?What we want to know is, who is our customer and what are they doing on a daily basis? How can we use that knowledge for us to create a connection with them?E.g. A customer might take the train to work which might take 45 minutes. On the train they could listen to their i-pod, or surf the web on their I-phone, etc.How could we market to these people? Pod-casts, I-phone applications, Advertising on the train, etc.Start by giving the entire group an example, which will help to clarify your expectations of the exercise.Once you get the group back together, ask each group for their ideas and feedback.Write up all of the ideas on the whiteboard, (remember there is no bad idea) then you can move onto task 2.Task 2 (in groups)Ask and write down these questions on a white board1. Which ways do we influence our customers? 2. What is the moment of truth for our customers? 3. What can we do to shorten and add intensity to the moment?In this exercise, we are trying to identify the critical moments in the customers interaction or post interaction with us. E.g. A moment of truth could be once the sale has closed what they say about your product or service to their friends, family, etc or maybe they say nothing at all. You also want to come up with solutions on how you can add more impact, so that the moment of truth is intensified and the value proposition to the customer is greater.Again, bring the groups back into the whole group to share their feedback and ideas. Expand on these ideas to get more detail into them.Once you have completed task 1 and 2, you can move on to the last task.Task 3 (in groups)Ask and write down on a whiteboard1. What are the different parts of what we do? 2. Which of these could we use as a launching pad? 3. How could this launching pad be capitalised on by others?What you are trying to discover here are different avenues to launch your product or service through. These are often referred to as platforms.Once the group has finished bring them back together and summarise the findings of the exercise. The goal is to come up with as many new and creative ways to reach your customers as possible. Then deciding on which ones you will action.3. Increase your price and marginsThere are a lot of people that fall into the trap of getting into a price war by giving discounts. This then turns into giving massive discounts and so on and so on.If you want to increase your margins, in many cases you will be better off by making a slight price increase. This could mean losing a small percentage of your customers. What many small business people don’t realise is that you can still afford to lose a small percentage of customers and still increase your margins at the same time without it having a negative impact on your profitability. I have included a pricing table for you, so that you can easily see the differences between price discounting and price increasing.Once you have read through the table, run the numbers over your main product line, and seeing what you come up with. You may be very pleasantly surprised.Discount Versus Price Increase TableThis table highlights the increase in sales that are required to compensate for discounting on price.Let’s assume your gross margin is 30%. When you reduce that price by 10%, you will need to increase sales volume by 50% to maintain your profit.This strategy hasn’t worked well in the past and it’s not likely to change in the near future.Don’t fall into the trap of thinking that discounting is the only way to make more profit, because it may draw in more customers.You will be in for a short, sharp shock if you do this without knowing the true impact on your business.Your present margin is: 20% 25% 30% 35% 40% 45% 50% 55% 60%And you reduce your price by:To produce the same profit your sales volume must increase by: 2% 11% 9% 7% 6% 5% 5% 4% 4% 3% 4% 25% 19% 15% 13% 11% 10% 9% 8% 7% 6% 43% 32% 25% 21% 18% 15% 14% 12% 11% 8% 67% 47% 36% 30% 25% 22% 19% 17% 15% 10% 100% 67% 50% 40% 33% 29% 25% 22% 20% 12% 150% 92% 67% 52% 43% 36% 32% 28% 25% 14% 233% 127% 88% 67% 54% 45% 39% 34% 30% 16% 400% 178% 114% 84% 67% 55% 47% 41% 36% 18% 900% 257% 150% 106% 82% 67% 56% 49% 43% 20% -400% 200% 133% 100% 80% 67% 57% 50% 25% –500% 250% 167% 125% 100% 83% 71% 30% – - – 600% 300% 200% 150% 120% 100%However, if you adopt a premium pricing strategy the following table shows the amount by which your sales would have to decrease, following a price increase before your gross profit is reduced below its present level. For example, at a 40% margin a 10% increase in price could sustain a 20% reduction in sales volume.If you’re present margin is: 20% 25% 30% 35% 40% 45% 50% 55% 60%And you increase your price by:To produce the same profit your sales may reduce by: 2% 9% 7% 6% 5% 5% 4% 4% 4% 3% 4% 17% 14% 12% 10% 9% 8% 7% 7% 6% 6% 23% 19% 17% 15% 13% 12% 11% 10% 9% 8% 29% 24% 21% 19% 17% 15% 14% 13% 12% 10% 33% 19% 25% 22% 20% 18% 17% 15% 14% 12% 38% 32% 29% 26% 23% 21% 19% 18% 17% 14% 41% 36% 32% 29% 26% 24% 22% 20% 19% 16% 44% 39% 35% 31% 29% 26% 24% 23% 21% 18% 47% 42% 38% 34% 31% 29% 26% 25% 23% 20% 50% 44% 40% 36% 33% 31% 29% 27% 25% 25% 56% 50% 45% 42% 38% 36% 33% 31% 29% 30% 60% 55% 50% 46% 43% 40% 38% 35% 33%Many small business people who believe that price is the only factor influencing the buying decisions of their customers, will probably reject the concept that a high price strategy (and by implication high value product) will work.You may accept that perhaps it’s right for some businesses but not for your business. There is no business that does not have the potential to command a premium price for its products or services. As long as it has the ability to market their products and services in a way that the customer perceives ads value.There are 2 reasons customers will leave your brand. 1 – They will leave on price. 2 – They will leave on a perceived indifference. Basically they don’t think you care about them, or you don’t add enough value to the relationship.Here is a quick break down on percentage: 15% Leave on Price 68% Leave on Perceived indifferenceA client worked out recently that he could increase his prices by up to 8%. He could afford to lose 14% of his customers in the process, without it affecting his bottom line. By doing so, he was able to cut down the number of ‘C’ customers in his business and get a massive increase in the number of ‘A’ customers. These are the customers he wanted all along.There are plenty of examples that have been covered already on how to increase the perceived value of your product or service to your customers. Considering that 68% leave because of a perceived indifference, this is where you need to ensure that you have effective systems and processes in place and that extend your ability to reach every customer in a value adding capacity.4. Being more effective in your processesThis is often the easiest and least time consuming way to grow your business. It often get’s pushed to the kerb because there are perceived to be bigger and more important things that need to be accomplished. No matter how many big things you do, if you can’t master the little things, you have a gloomy future forecast.You will often hear people speak about working on your strengths and paying other people to take care of your areas of weakness. This is a totally justifiable and valid concept, but we don’t always apply it to the same degree at all layers of the business.Just imagine if you could get an improvement of just 1% across 100 of the things that your company does on a daily basis, what a massive difference it would make.You will be aware that when people refer to great sales people they often say that there is only a 2% difference in what they do above and beyond the average sales person. Remember it is all in the process.Hot tip. Think about this for a minute, would your business be better off by doing 100 things 1% better or by doing 1 thing 100% better? It’s an interesting question and the answer in most cases is obvious. Your business would be better off by doing the 100 things better.This entire concept comes back to when you read about measuring everything in your business. The only way you can measure anything is to have a system and or process that is capable of measuring.If you have an area in your business that is not performing where you would like it to, then the quickest way to get change is to make a non negotiable appointment with yourself. You can bring in the senior management team if you like.In order for creativity to flow you first need to stop, then you evaluate, then you can dream as big as you want to about the desired outcome. Once you know what you want the end result or product to look like, you can go about doing something about it.Always be testing, measuring and monitoring every part of your business. Consistently using good, easy to work with systems and processes. Remember, your success is a matter of basic mathematical equations.© 21daysto – All Rights Reserved. http://www.21daystoprofitableleadership.com Unauthorized duplication distribution is strictly prohibited