Selling into prosperity
You can spend yourself into bankruptcy, but you can’t save yourself into prosperity. For that, you have to sell more stuff, profitably. Yes, you need to be an efficient, low-cost operator but, after you’ve trimmed expenses and improved your systems and processes additional savings get harder and harder to find without cutting into the very heart and muscle of your business.
At some point you have to sell more. You have to create, deliver and communicate compelling, customer value and experiences that will grab your target customers, clearly differentiate you from your competitors, make you famous and grow your bottom line.
And here’s the good news. You don’t need to increase sales by a huge amount to make a significant difference in your bottom line. For example, if your gross margin is 35%, increasing sales just 5% will likely grow your bottom line by 35% – if you maintain your margins and expenses at current levels. If your gross margin is 25%, 5% more sales will grow your bottom line by about 25% – if you maintain margins and expenses at current levels.
Get the idea? Whatever your gross margin percentage is, 5% more sales will grow your bottom line by about that same amount, as long as you don’t cut your prices, reduce your margins or spend like a drunken sailor. How much better would you have to be to increase sales by just 5%? Not how much cheaper but how much better?
Bonus Tip: In most businesses, the easiest way to increase sales by 5% is to make sure your existing customers, the ones who already know you, love you and trust you, know about all the value, products and services you offer.
Reality Check: Whatever product or service you sell, your market is over-served and under-differentiated so, basically, you’re peddling a commodity. To increase sales and profitability, you need to stop being a commodity.
Solution: Here are three simple steps to rethink your business, clearly differentiate yourself and sell your way to prosperity:
Step One: Redefine your business, not by what you sell, but rather by how you help your target customers.
For example, a mortgage company would no longer say, “We sell mortgages!” That just doesn’t grab people. They would powerfully redefine themselves as being in the business of helping people have a stress-free experience buying a home wisely, securing the best mortgage and then paying off that mortgage as quickly. conveniently and inexpensively as possible. Isn’t that what people really want when they’re looking for a mortgage?
This Step One requires you make a fundamental decision in your business. “Are we trying to get our customers to do what we want them to do or are we committed to helping them do what they want to do?”
Step Two: What kind of help do they need?
Now that you’ve redefined yourself by how you help, take some time to think and feel like a customer. Sit down with your team and start making a list of all the help your target customers need in order to know about you and all the value you offer, to wisely choose and effectively use what you sell – and what kind of help they need in any way related to doing business with you. Think about what gives them stress, or causes confusion, suspicion or doubt.
Think of what products, services, information and coaching, after-sale support, convenience, confidence, kindness and encouragement, payment methods or terms, updates, reminders or maintenance they might need to have a complete, successful and stress-free experience with you and with what you sell at every touch-point. To jump-start your creativity, consider these four simple questions:
- Do all of our target customers know about us and all the value we offer? How can we help them know more about us and trust us?
- Functionally, emotionally and financially, what are our target customers really trying to do when they buy, install, use, service, update and eventually recycle what we sell?
- What do they want or need to know to wisely choose and effectively use what we sell? How can we be their Caring Coach?
- How do they want to feel when they do business with us and every time they ‘use’ what they buy from us?
Step Three: How will you deliver some of that help better than your competitors?
Now that you know exactly what kind of help your customers need, get creative. What’s the most wonderful way you can deliver that help, effectively, consistently and profitably every day, without fail better than your competitors?
- what can you do to help them to know about you and all the value you offer?
- how can you help them to do what they’re trying to do?
- how can you help them to know what they want or need to know, and,
- what can you do to help them to feel the way they want to feel?
Think ‘wow’. Think ‘amazing’. Think about what has never been done before. Think and feel like a customer and have the creativity and the courage to create compelling customer-owning value and experiences at every touch point. Compelling value and experiences that will ‘grab’ your target customers, clearly differentiate you from your competitors, make you ‘famous’ and grow your bottom line.
In conclusion: Involve the best minds and hearts in your business in this process (If you’re a very small business, ask some bright friends to help you). Get creative! Break the rules! Ask what’s possible and what’s next?” Then, dare, decide and commit to action.
That’s it for this week. Stay safe. Live brilliantly and do at least three important or kind things each day!