NEWS

As the economic slowdown hits more businesses, we are encouraging all our clients to keep a close eye on profitability and strategies to improve this.

Give your REAL Client Manager or one of our team a call to book a business planning and review meeting to learn which of these strategies will be best for your business.

Here’s a quick overview to get you started:

 

Engaged Staff Strategies

• An engaged team is going to get you a lot further than a disengaged team. An enthusiastic team will lead to increased productivity, customer satisfaction, profitability, and employee retention. Providing value to employees will increase their productivity.  Providing training and development, flexibility and feedback will increase their engagement in the work place.

 

• If everyone understands the importance of profitability and the difference that can make in helping improve profitability by keeping costs down (do you really need so many print outs? minimising waste, etc.), charging accurately for time or keeping product failures/breakages as low as possible, etc. Getting everyone on board with profitability will have a roll-on effect for the whole business.

 

• It is also important to monitor staff members’ performance. This can include setting goals, setting KPI’s, holding regular performance appraisal meetings and reporting on areas of success and improvement as they happen.

 

Lead Generation Strategies

• It has been proven time and again that word of mouth referrals are significantly better than advertising. While advertising and marketing will help people be aware of your business and brand, it is the personal referral that will get prospective customers actually knocking on your door.

 

• Form alliances with complementary businesses to increase your potential customer network. Look at and market what differentiates you from your competitors. Spend your marketing budget wisely, know your potential clients and what avenues are best to target those.

 

• Network, Network, Network – join your local chamber of commerce, attend events!

 

• A solid online presence is so important. If you search for your business or the products/services you sell on Google, what page do you appear on? Keeping your website updated with fresh content (blog posts, case studies, project summaries) every month will help with your Google ranking. Also posting frequently to social media with links back to your website to “Read More”.

 

• If branding, marketing and social media isn’t your jam then pay someone else to do it.

 

Conversion Rate Strategies

• Ask for business and be willing to pitch for work.
• Use a Customer Relationship Management system (CRM) such as Salesforce.com to follow leads and track sales. 
• Follow up on leads – do not lose touch. Set up face-to-face meetings.
• Research prospective clients. Be confident in what you are selling.

 

Retention Rate Strategies

• Keep in contact with your clients, do not take them for granted.
• Make appointments to see them, provide training to their staff, make time for them.
• Reward your top customers.
• Constantly remind your customers why you are the best through your products and services.

 

Average Transaction Value Strategies

• Train your team to upsell. Do you want fries with that? Can you offer extras? Add-ons?
• Focus on higher margin products.
• Offer under-performing products as a bonus for high-margin products.
• Focus on profitable customers and higher margin products.

 

Number of Transactions Per Customer Per Year Strategies

• Expand your product range and aim to offer something new.
• Ask your client open-ended questions to uncover what they are after.
• Keep an open mind, don’t presume to know what your clients require. 
• Provide post-sales support.
• Build strong relationships, keep in touch with your clients and consider creating a loyalty scheme to reward loyal clients.

 

Pricing Strategies

• Review your pricing, particularly with a view to profitability and assess the Gross Profit per product/service.
• Look at what your competitors are doing and consider how you compare – what do you offer that they don’t which warrants a premium price?

 

The 80/20 Rule

It is likely that 80% of your sales come from 20% of your customer base. Are you delivering the best possible products/services to your most valuable customers? Are the maybe expecting more from you? Do you grow your total customer database or do you grow the profitability from your high value, 20% customer base?

 

If you would like to discuss how the above relates to your business, reach out to us!

 

Disclaimer

This information is intended to provide general advice only.  We recommend you discuss your specific situation with your Accountant.