7 Strategic Moves That Boost Your Profits

7 Strategic Moves That Boost Your Profits
by Marcia Yudkin

Work smarter, not harder, by making small but
significant shifts in the way you do business. Simple
adjustments, clearheaded analysis and two minutes here
and there may be all it takes to boost your bottom
line. Carefully consider these options, and you
should be able to implement at least one or two of
them right away.

1. Drop your least profitable offerings and
concentrate on your most profitable ones. Note that I
said "profitable" - not those bringing in the most or
least money overall. You can sort your products and
services by their profitability if you analyze your
expenses according to which sources of revenue they
support. "Most small business owners lose sight of
precisely where they are making money and where
they're not," says David Shepherd, author of the book,
Your Business or Your Life. By getting rid of the
offerings that require the highest percentage of costs
in order to deliver them, you can see immediate
improvement in profits, says Shepherd.

2. Send "difficult" clients or those you simply don't
like to your competitors. In a survey by David
Maister, a consultant for top professional firms
around the world, only 30-35 percent of respondents
said they liked their clients; 50-60 percent said they
tolerated their clients; and 5-20 percent didn't like
them at all. "Why spend the majority of [your] life
working on tolerable stuff for acceptable clients
when, with some effort in (for example) client
relations, marketing and selling, you can spend your
days working on exciting things for interesting
people?" asks Maister. You'll feel more enthusiastic
about your work and get more done when you send
unpleasant or troublesome clients to get their needs
met elsewhere.

3. Pursue customers who can or will pay more. A
consultant once told me that she'd come to the
conclusion that people starting a small business
simply wouldn't pay the fees she felt she should
charge. I didn't agree, because I'd had clients ready
to spend big on launching their new business. They
were in their forties and fifties and either had a
budget to spend from a company that was laying them
off, or they were willing to raid the retirement fund
they'd accumulated working for a large corporation.
It would be possible to target others like them and
make multiples of what she'd be earning from those
just scraping by, but I think she just didn't believe
what I was saying. Almost always, your existing
market includes people who have more money or are
willing to spend more of what they have for your
stuff, and by marketing to people like them, you earn
more for the same effort.

4. Reuse everything you create in different formats or
for different purposes. If you've taught a seminar,
turn your handouts into an article (that's how what
you're reading came about). If you collected industry
data to direct your marketing, sell your research to
colleagues. If you regularly interview experts about
what's new in the field, incorporate their insights
into a product. And so on. "Do once, sell three
times" is a shrewd money-making mantra.

5. Create an untiring army of sales reps through an
affiliate program. Colleagues who don't have their
own products or services, or whose offerings
complement yours may be happy to promote your wares in
exchange for a commission on the business that they
refer. On the Internet, so-called affiliate programs
make that process easy. You decide on the terms, find
marketing partners who agree to them and give those
partners a link to use that keeps track of leads or
sales coming through that link. I use FusionQuest.com
for my affiliate program because unlike most such
services, they themselves take no commissions from
sales coming through the program.

6. Cultivate and reward your referral partners. Two
ordinary words work magic when it comes to nurturing
relationships with people who regularly send you
business: "Thank you." If they send you sales with a
particularly high value, a gift, such as a book, a
fruit basket or tickets to a show might be
appropriate. How do you initiate such relationships
in the first place? This can be as simple as inviting
professionals out to lunch and asking them what they
do so that you can refer business to them. Only an
idiot would not reciprocate by turning the same
question back to you.

7. Invest more to get customers who have a high
lifetime value. Keep in mind that when done properly,
marketing is not an expense but an investment.
Correspondingly, you need to know how much you can
afford to invest to acquire a customer. The smart way
to think about this question is not in terms of an
amount for your marketing budget that you think sounds
reasonable but in relation to how much you can earn
during the whole time someone remains your customer.
For instance, spending $100 to lure each new customer
may sound outrageous until you realize that each one
spends $4,000-5,000 with you over the course of three
years. With that profile, it might be smart to spend
much more than $100 per customer to lure them into
your fold.

Why slave away doing things the way you've always done
them when you can earn more by using some of these
strategies? Please let me know when you try any of
these moves, with extraordinary results!

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Marcia Yudkin is the author of 6
Steps to Free Publicity and 10 other books. She runs
a private member site, MarketingforMore.com, which
supports business owners who are growing their
businesses. Learn how to avoid the most common pricing
mistakes in her free report, "Charge More & Get It,"
available from
http://www.marketingformore.com/survey.htm .