Cathy Stucker - The Idea Lady

Attract Customers and Make Yourself Famous

Build Profits Three Ways (Part 1)

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This begins a three-part series on how to build your profits. Parts 2 and 3 will deal with ways to increase revenues, but part 1 starts from the other end: reducing expenses.

Every dollar you cut from your expenses goes straight to your bottom line. We’ve all heard the old saying that “You have to spend money to make money.” Yes, it’s true that you can’t reduce your expenses to zero, but there is probably waste in your spending which you could trim, and there are ways to spend your money more effectively.

Don’t confuse buying stuff with making progress in your business. Getting a new computer or buying fancy letterhead may be more for your ego than your business.

Each time you prepare to pay for something, ask yourself what contribution the expense will make to profits. Will it attract more business? Will it help you to reduce expenses in another area? For example, automating a function costs money up front, but could save (and make) money for a long time to come.

And this one may throw you: Don’t be afraid to trade money for time–always spend your time and money wisely. There are times when it makes more sense to spend money than to do it yourself. Now, I am a hardcore do-it-yourselfer. But when it makes sense, I pay someone else to do it.

This makes sense in at least three situations: One, when you can use your time more profitably. Does it make sense to turn down work paying $100 an hour so you can do something you could hire $10 an hour help for? I don’t think so!

Two, your cost in actual dollars may be less when you outsource. I could buy a copier or printing equipment and print my own manuals, or I can have it done by a print shop that already has the equipment. My cost is less to have them do it than to do it myself, even before you add in the value of my time.

Three, when hiring someone will get better results than if you do it yourself. If you are really uncomfortable making cold calls to set up appointments, you may not do it very well. Hiring someone else to take that first step could result in lots more appointments–and more sales!

Use your time and money wisely to increase profits. In the next installment, we’ll talk about innovative ways to increase your revenues (and profits) from each sale you make. In Part 3, we’ll talk about ways you may not have considered to make more sales.

Six Things You Need to Know About Sales

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This is a guest post with sales advice from G.L. Hoffman. It is excerpted from his book, Dig Your Job.

sales-woman

Sometime during your adult years you will wonder about starting your own business or company. Everyone thinks about it so you will too. There are a lot of factors than go into this decision and things you should know. Some people can achieve success on sheer effort combined with a great business idea…even if they have little experience or knowledge about business. However, no business can survive without sales. Here are some things you need to do to make your business successful.

1. Sales is number one, two and three on the priority list. You should plan on spending most of your time worrying and working on your sales efforts. Nothing else matters much. A sale happens when someone pays you for your service or product. Don’t get too excited if the marketing focus group says everyone will buy one. Get excited when someone pays for it.

2. To sell many, sell one. To build your company, you have to sell multiples. You can’t just sell one. Anyone can sell ONE. The trick is to sell a lot, right? Sure. But before you can sell many, you have to sell that one single customer so that he is excited and pleased to have your product or service. This is why when you talk to venture capital investors, they are obnoxiously insistent on waiting until someone buys something from your company. Everything else is classroom.

3. Do you know what scalable means? This is a relatively new business topic for an old business process. What this means is that you should try to develop processes in the business that can be easily duplicated and replicated. It is one thing to sell your product to one person, quite another to figure out how this sale was made so that you can make the next sale more efficiently. Success often hinges on your ability to continue to do the correct things faster and better that result in some tangible success.

4. Your sales people don’t work for you. The sooner you realize that all good sales people work, truly, for the customers and not for you, you will understand more about sales people than 90% of all non-sales people.

5. Sales trumps all. Sales will mask a lot of internal problems. Or, said another way….sales mean you can live to fight another day, and buys you time to fix and solve internal problems…which are sure to come.

6. Just stay in business. Too many new companies flame out, just like the afterburner on some supersonic jet. The pilot kicks in the after-burner for an added jolt of power, but once it happens, that’s it, no more power. If you can just continue your new business, first year to the second year, then to the third year…chances are great that you will make it. Do whatever it takes to make it to that third year. Don’t flame out.

G.L. Hoffman is a serial entrepreneur and venture investor/operator/incubator/mentor. Two of his companies have traveled the entire success path from the garage to IPO. He has been featured in Forbes, Wall Street Journal and other local business publications and newspapers.

Currently, he is Chairman of JobDig, an employment-focused media company that delivers multi-channel recruitment advertising solutions to employers of all sizes in all industries. JobDig publishes a free weekly jobs newspaper in markets throughout the U.S., operates the popular website jobDig.com, and partners with network and cable TV stations and radio stations in each of its markets to allow companies to leverage broadcast media in their recruitment advertising. The company also owns and operates LinkUp.com, a site that aggregates and publishes only jobs listed on corporate web sites from over 10,000 companies around the U.S. His daily blog can be found at www.whatwoulddadsay.com, JobDig.com, and now as a weekly guest writer at US News and World Report. He can be followed on twitter at www.twitter.com/glhoffman

Party On to Make More Sales

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Want to sell more? Throw a party! Direct sales programs have long used parties to get customers together and in a relaxed mood, ready to buy. 

You may think that party plans only work for housewares, jewelry and cosmetics, but these days parties are used to sell a variety of products and services.

Traditionally, parties have been held by and for women. A customer serves as hostess and invites friends and family to attend. The sales consultant brings products to demonstrate and takes orders from the guests. The sales consultant receives a commission on sales, and the hostess receives free or discounted products based on the volume of orders placed by her guests. Refreshments are served, games are played and a good time is had by all.

Although long-time favorites such as Tupperware and Mary Kay still market through parties, today even doctors are getting in the act. “Botox parties” started appearing in 2002, after the Food and Drug Administration approved Botox injections for cosmetic use. And party plan marketing is not just for women any longer. The ProShop@Home sells golf equipment and accessories, and many of its customers and sales associates are male.

Could your business sell more by starting a party plan? The businesses that stand to gain most from this type of direct sales program are those selling products that can be effectively demonstrated in a sort-of-social setting. Jewelry, cosmetics, clothing, kitchen gadgets, home accessories, children’s toys, and more are all successfully marketed through party plans.

Selling consumables, such as cosmetics, can lead to repeat business. When customers try and like the products, they will want to buy more to replace the initial supply.

As shown by Botox parties, parties can be used to sell services, too. The social element was attractive to partygoers, because having their friends there provided support and fun around something involving needles. Other services that could do well in a party setting might include spa services, such as chair massage, facials, and manicures, or a home psychic fair where guests get astrological charts and tarot card readings.

Parties could provide lessons in how to do something. You might charge for the lessons, or they could be part of the fun while selling needed materials and supplies. Guests at crafting parties could learn ceramics, jewelry making or knitting.

If you sell to businesses, you might try a variation on party plans. Invite customers and potential customers to an event at your store or office, such as a seminar or networking event. Getting a benefit, such as information or new contacts, will make it worthwhile for them to attend. While they are there, demonstrate a product and make a special offer.

Try several parties to see if this is a profitable system for your business. Host the first event yourself, and seek hosts for future parties among the guests. Also be on the lookout for people who could become sales consultants. Often, the best direct sales people come from the ranks of customers.

Easy Sales Tips - Make More Sales!

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No matter how successful a salesperson is, they always want to make more sales. Here are seven easy tips that can increase your sales and help you make more money.

Ask for referrals. Every time you close a sale, ask the customer who he knows who could also use your service. Things a little slow? Call some customers and ask them for referrals.

Talk to one more person every day. If you make cold ten calls a day now, start making eleven. No matter how many people—customers, prospects, vendors, others—you talk to in a typical day, make it a point to talk to one more. That tiny increase in effort can produce big results.

Focus on the benefits. Can you quickly and simply explain what your company does? If not, then work on your 10-Second Brag.

Suggest add-ons and upsells to increase the size of each order. Make sure the customer gets everything they need by suggesting additional products or services to go along with what they purchased.

Get customers to buy from you again. It is easier to sell to someone who already knows you and has bought from you in the past than it is to sell to someone who is not familiar with you. Contact past customers to remind them to buy consumables or to let them know about a new product or service.

Smile. Your good mood and positive attitude will be contagious. People like to buy from people they like, and your smile will make you more likeable.

Ask for the sale. You can do everything else right, but if you do not ask for the sale you will not get it. Do not make the customer close the sale himself. 

Build a Revenue Base

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You can insulate your business from the effects of income fluctuations by marketing your products and services in ways that build income streams that keep money flowing to you month after month. 

Look for ways you can encourage commitments from customers and keep cash coming in on a regular schedule.

During a visit to a spa I was asked if I wanted to buy a package of services, instead of paying for only the treatment I received that day. I got the advantage of a lower price for each service. The spa not only got me to commit to coming back for additional services, I have paid in advance for those services. At future visits, I may be tempted to try additional products or services. And by making my visits there a habit, they have created a relationship that will result in my providing them with ongoing revenue.

Some customer commitments do not require advance payment. Instead, customers are automatically billed each period, usually by bank draft or credit card, for the agreed-upon amount. Many customers enjoy the convenience of these arrangements, and customers may receive a discount when they commit to a longer term or pay in advance.

Service businesses often provide services on retainer. For a monthly fee, the customer has access to a specified level of service. The service provider is guaranteed a certain amount of income and the customer knows that the help they need is just a phone call away.

Maintenance contracts are a variation on the retainer idea. For a set fee the provider performs all routine maintenance, and may even include a number of hours of labor if a repair is needed.

Subscriptions are not just for magazines. In fact, just about anything can be sold by subscription. Consumables fit this model well. If you sell printer supplies (such as toner or ink cartridges), you might suggest setting up shipments where customers receive supplies on a regular schedule based on their expected needs.

Memberships offer another revenue possibility. You may charge for memberships in a facility (such as a health club), an organization, or even a Web site. There are membership Web sites for everything from grocery coupons to hobbies to businesses. Online membership fees range from a few dollars a year to hundreds of dollars per month.

Create revenue streams by selling advertising. Advertising opportunities might include posting signs at your place of business or on your vehicles, selling space in your customer newsletter, charging for mailing flyers with your invoices, or posting ads on your Web site. Google will automatically feed ads to your Web site and share revenues through their Adsense program.

Having these “automatic” revenues in place does not mean that you can then stop marketing. Customers will drop out and have to be replaced, and ongoing marketing will help you expand your business. However, having a base of revenue you can count on means that you can spend your time serving customers and growing your business instead of worrying about covering basic expenses.