And Make More Profits

An interesting conjunction of two business stories highlighted an issue that businesses often overlook.  It is so easy to become focussed on price, and the competition, without looking at other aspects of the business model that also affect sustainability, and profitability.

The most common reaction to competition is to cut prices, i.e. discount.  Now there is a place for discounting as a marketing tactic, but not as a strategy.  The problem with discounting is that it cuts your gross profit margin; a short term gain in sales, but……

My mantra is that it is not the volume of sales that’s important in determining the profitability of your business, but the volume of Gross Profits.
The second reaction, and usually from more savvy businesses, is to look at how they can increase value.  After all, people buy on the value they receive from their purchase.  And yes, discounting does increase value, but a better strategy is to look at how you can add value, without cutting your margin.

There is a third way to maintain or even increase your margin, and do so while cutting prices. 

Now the two stories; yes, my examples are all major businesses, but that doesn’t mean the principle espoused cannot be applied to your business.  It can.

The industries are retail, in the form of Aldi and Amazon, and mining, specifically Fortescue Minerals, to which I’ll add some direct experience I had in a similar exercise.

I’m talking about costs.  Costs are only relevant in the pricing process because they establish a lower boundary for the price.  In certain circumstances, there are strategic reasons a company may decide to sell a product below its cost for a period of time, or to a certain market segment as a “loss leader.” 

But that is not what I’m going to discuss.  As you shall see in a moment, I’m not talking about incremental reductions, but significant reductions -  I’m talking about real cost reduction.

Let’s start with retail.

The source of this story is the online newsletter Smart Company, and an article by Kevin More, “Why Aldi and Amazon are not Discounters”. 

When it comes to price, we often hear some retailers referred to as “discounters.” Retailers like Aldi, Lidl and Amazon. But here’s the thing. They’re not discounters and don’t think of themselves as discounters.

Firstly, Aldi and Amazon have a fiercely won and maintained a low “cost of doing business”. There are as few costs as possible between the receiving dock at the warehouse and the trolley in the store, and this includes their head office.

Aldi has no phone numbers to call the stores. This allows the managers to be on the floor filling shelves or at the receiving bay receiving products or on the checkout. And that’s just the manager.

The Aldi trolleys all have gold coin locks so shoppers invest their time in finding and returning trolleys. In fact, no store staff or suppliers to Aldi probably ever touch a trolley, other than to repair it. Only the shopper. Why is that important? Well collecting a fleet of 300 trolleys probably costs around $32,000 a year per store and for 700 stores with trolleys, this equates to a lazy $22 million a year.

So how can you offer lower prices all day every day ever since you were founded? And how can higher priced retailers compete?

Amazon chief Jeff Bezos is famous for his phrase, “your high margins are my opportunity”. He didn’t set out to sell groceries and electronics but the margins he saw were so attractive he had to compete. And it’s not just retailers that have high embedded cost, but major branded manufacturers too.

What he actually meant by the phase “your high margins are my opportunity” was that the combined high costs of many suppliers and retailers allow Amazon to offer either its own products vastly cheaper or branded products a lot cheaper.

Discounts in brand marketing means lowering the price of a branded item from the level the manufacturer would normally like to sell at and the shopper would normally expect to pay.  Aldi and Lidl have exactly the same philosophy.

They aren’t discounting; they just operate on a lower cost of doing business and are supplied by companies with a lower cost base. When you combine these two low cost bases, retailers like Aldi and Amazon need lower cash margins and so offer lower cash prices to shoppers.

Does this mean it is all over for full-service retailers and branded goods manufactures? Well no. It just requires a long-term plan to lower operating costs via massive capital expenditure.

Retailers have to apply money from today’s profits to protect future profits. They need to put money into new lower cost ways of doing business to allow them to sell at lower prices and still make a return for shareholders.

Now for Mining

The source for this story is an article in The Australian Business Review by Stephen Bartholomeuz, “Fortescue’s Great Achievement”.

Five years ago, when the iron ore price “crashed’’ to $US90 a tonne, Fortescue Metals was in crisis.

Today, after a year where the price averaged just under $US70 a tonne, Twiggy Forrest’s group reported a $US2.1 billion profit.

As is now well understood, the core of the explanation for the transformation of Fortescue from an overtly-leveraged and vulnerable minnow into a genuine third force in the Pilbara with a stable balance sheet has been its performance on costs, coupled with an increase in iron ore volumes from the 55.8 million tonnes it shipped in 2012 to the 170.4 million tonnes it shipped in the year to June.

From a starting point of C1 costs of more than $US48 a tonne the group has steadily and significantly shifted itself down the cost curve to the point where, in the year to June, C1 costs averaged $US12.82 a tonne, adding another $US445 million to the $US2 billion benefit it gained from reducing costs in the previous financial year. In June this year its C1 costs — which represent the “direct” production costs of iron ore — were $US12.16 a tonne.

Note the 75% reduction in the direct production costs of iron ore!

Now for my mining example.  Some years ago, I was asked to join a team tasked with reducing a major mine’s operating costs by 22% in cash terms.

This was a strict guiding rule for the team; no fancy accounting tricks.  The client was looking for real cash savings, much like Fortescue, except that we looked at more than the “direct” production costs.  Real savings were being targeted across the board.

The team was divided into small groups that looked at everything from the mining costs, to travel, vehicles, and the costs associated with the mining town which supported the operation.  All costs were on the table.

I must admit I was dubious that this could be achieved, but it was.  Much like the Fortescue example, the outcome achieved made a significant difference to the survival and prosperity of the mine.

Takeaways

•    Discounting is not a lower-cost way of doing business.

•    Adopt a “lower cost of doing business” business model and challenge all high, embedded costs.

•    Significant cost reductions can be achieved, but it requires detailed study.

•    It also requires working with suppliers who have a similar “low-cost” approach.

•    A lower-cost way of doing business allows you to sell at a lower price, and still give shareholders a return.

•    You will need to apply money from today’s profits to achieve a lower cost way of doing business.

Let's be Specific!

You can build a low-cost business model.  The key questions are – how much do you want to reduce your cost of business, and why?  What do you want to achieve?  What difference will it make to you?

If you can articulate your response to these questions, we should have a chat about HOW you might do that.

For more than 29 years I’ve been helping small business owners plug the profit leaks in their business and restoring their cash flows by assisting them understand where there profits really come from, where they’re leaving money on the table, and where their sales are costing them profits.

If you would like to discuss with me how you might do that, book a Strategy Consult here.

 

© Copyright 2017 Adam Gordon, The Profits Leak Detective 

Guarantees – your key to success…

Want to become a brand leader?  Have prospects want you over the competition?

Give a balls nailed to the wall guarantee. Something that makes you sweat and go, “Oh no! I could never do that”.

That was the challenge put by Rashid Kotwal of Revealed Resources.  Rashid helps businesses accelerate their growth by winning high value clients.  I interviewed him a while ago – “How to Gain High Value ClientsHigh Value “How to Gain High Value Clients”.

Take it away Rashid:

“Oh no! I could never do that".

And then I’d insist you feel the fear and do it anyway.

Why?  Because as customers our number one fear is “Will it work.  And if it doesn’t will they fix it.”  Answer that comprehensively and you’ll remove that barrier to a sale.

I received this from one of our readers, a home improvement specialist:

“Our commitment to each and every customer:

Do we get things 100% right all the time? Well, to be frank, no we don’t. But you know what, we’ve been in business for over 40 years and we haven’t been here this long without knowing the problems in advance that are likely to happen on your job when you’re installing it and we have a team here who are willing and waiting to help you!

And if we do make a mistake ourselves, whatever that may be, we’ll fix it! GUARANTEED!!

You’ll not have to put up with an inferior job from 2nd rate tradesmen, whether they’re installing or manufacturing your job and as we are the manufacturer too, we know how your job goes together.

We have the expertise to get it right… even if occasionally that’s not the 1st time!

With over 40 years of experience in steel fabrication, you can rest assured that your garage, shed, carport, veranda, rumpus room or whatever it is you buy from us… ‘IS BUILT TO LAST!!’”

Which is a great lead in to the subject of guarantees or risk reversal.

One of the biggest barriers to a sale is risk. Your prospects want to know you’ll stand by your product or service if things go wrong.

And obviously in most cases the answer is a resounding “yes”.

But ironically, just about every business fails to communicate this to their prospects and clients.

Why? Two main reasons.

They think it’s obvious that the client knows the terms of the guarantee or…

They think clients will take advantage of them and invoke the guarantee even when the client is obviously at fault.

Let’s take these in turn.

One of the most important rules in marketing is “state the obvious” and tell people what it is you stand for. If you stand by your product or service and will fix things that go wrong, regardless, you need to shout it from the rooftops.

Now I can hear some of you cringing at the thought, thinking you could never do that and it’s a sure way to go broke with the flood of customers wanting stuff fixed even though it’s their fault.

But you know what, it rarely happens.  Here are some examples from our files.

Pixel Perfect – one of Australia’s leading professional photographic labs, is fanatical about colour management (i.e. what the photographer shoots is accurately printed), Pixel would print and if necessary reprint work till it was just right.

14 years ago, it was a crowded market, and Pixel needed an edge. We told them to offer a 110% money back guarantee.

“No way, we can’t do that! We’ll get taken to the cleaners” was the response. “But what happens if something goes wrong with a print?” “Naturally we fix it” “So why not tell people?”

Suffice to say, after a lot of kicking and screaming, they implemented the guarantee and splashed it across all their marketing. And you know what? In 14 years they have NEVER had anyone take them up on it. And they are now one of the few professional labs in Australia who are still around and the business is extremely healthy.

How about “All Heads Service”, who provide car cylinder head replacements to Auto Mechanics around Australia.

They provide an unheard of triple guarantee…

If they make a mistake, they guarantee to either fix it or replace the cylinder head and reimburse the mechanic for all reasonable expenses.

The exclusive no fault warranty where they guarantee to fix the cylinder head even if the mechanic makes the mistake!

If at ANY TIME during the cylinder head warranty, the head gasket blows, they’ll fix it and provide a new head as well.

That takes balls! And it’s no coincidence they are a booming business because of it.

Now if you’re still feeling fearful about offering a guarantee like this, go back through your records and look at the facts. See how many times you’ve been called on it. And see how much good will you’ve generated once you’ve fixed the issue.

I’m sure you’ll be surprised at the relatively few times (maybe even never) of being called on the guarantee.

Case in point is a conversation I had with a New Zealand Landscape company.

We were talking about outdoor construction and paving and I asked if they guaranteed their work unconditionally.

“Oh, we can’t do that – what if it’s the customer’s fault – say they back a truck over the pavers and break them.” “Oh, and how often does that happen?”

They’ve been in business over 25 years and only once had a problem with tiles. And the manufacturer admitted liability and fixed it!

Given these odds, why wouldn’t they differentiate themselves from the competition by proclaiming they’ll fix any issue regardless of who or what’s at fault? These companies have builder’s insurance anyway – so what’s the problem?

Just feel the fear and do it anyway! Your business will go forwards in leaps and bounds.

And if you’re wondering what our guarantee is, “If you implement everything we recommend and still not get the results we stated, we will work with you for free until you do.”

Finally, if you’d like help articulating your new guarantee, drop us a note and we’ll help you implement a guarantee which will help you become a leading brand.  Guaranteed!

Thanks Rashid

What you can Takeaway?

One of the biggest barriers to a sale is risk. Your prospects want to know you’ll stand by your product or service if things go wrong.  A guarantee reverses that risk in the prospects mid.

The stronger the guarantee, the greater the impact on the prospect, and the greater the impact on your sales.

Does the prospect know just how strong your guarantee is?  One of the most important rules in marketing is “state the obvious”.  Shout it from the rooftops!

Customers rarely try to diddle you.

Check your records; that will tell you how often you have been called on to fix a problem. 

The faster you have remedied a problem, the more the goodwill.

Your guarantee provides an opportunity to differentiate yourself from your competition.

You Can Do That!

When clients approach me for coaching, so often, they are not getting the clients they need, the right clients.  Eight times out of ten this comes down to not knowing what is working, and what is not working, and why it is not working.

So often they have not demonstrated a significant point of difference from their competitors, a point of difference that gives the prospect real confidence in selecting them.

For more than 29 years I’ve been helping small business owners plug the profit leaks in their business and restoring their cash flows by assisting them understand where there profits really come from, where they’re leaving money on the table, and where their sales are costing them profits.

If you would like to discuss with me how you might do that, book a Strategy Consult here. 

© Copyright 2017 Adam Gordon, The Profits Leak Detective 

It’s not for everyone

Finding time is something that bedevils all of us; there’s always something that is urgent, or important, or both.  If you are like me you’ve tried prioritising the day, the week.  Or you’ve applied the 80/20 Rule to your list of “to-dos”, but the problem never really goes away.  To get ahead we need to get things done.

What if you had “more” time?  Can you create time?  Sean D’ Souza from Psychotactics has worked out a “tool” that helps.  He calls it “The Three Prong SystemTM” – “It’s about how we create this time; and at the same time how do we create revenue that enables us to enjoy our lives rather than just work endlessly.”

Sean’s insight came from, of all things, Elvis.  “The thing that set me off was the fact that Elvis is dead. And, what does Elvis got to do with business? Well, the point is that he had been dead since, I think, 1977.  And despite being dead, his estate was earning several million dollars. I think it was 20 or 25 million dollars a year.”

He has a structure in place that kind of boils down to THREE elements. And those three elements are:

Consulting - when he says consulting he means one-on-one.  You spend an hour, and you can never get that hour back. So, that’s one-on-one.

Training - And training is what would happen when you stand in front of an audience and you speak to them. Say, instead of one person on a call there would be 25 people, 50 or 100. And he knows this now through webinars and podcasts, anything that’s live.  You still have to show up, but there are several people on the other end of the call. So, you’re spending the one hour, but the revenue is several times over.

Leverage is having products; when a training session is recorded, it becomes a product. And suddenly, what happens is you don’t have to be there. Just like Elvis. He doesn’t have to be around anymore.

In the truest form, leverage allows you to create a product and then sell that product multiple times over. The whole system of sales can be automated, leaving you with the simple task of collecting the profits.

You know it works because of Elvis. You’ve come back to Elvis again.  You know it works because he’s not around, and the system works for him, but it also works for businesses where the person who came up with the idea no longer exists.

There are problems if you only use the first prong.  Most service businesses use consulting as a primary source of income. Consulting is pretty hands on and involves advising clients, monitoring the client’s progress and doing projects.

If you sell services, like consulting or accounting, or whatever, and that’s all you do, you can’t ever “leave the building.”  You have to be there all the time at someone’s beck and call. 

For the vast majority of people, when someone calls for a job, whether you’re a window washer, or mowing lawns, or a consultant, or a doctor, whatever, you go. So 100% of your income comes from consulting, and so you have to go.

What if you could do “Group Consulting”, advising a bunch of people at the same time.  And that is what “training” is.  The cost to the individual client may be less, but if you have a group, then your overall return for that hour, or however long it takes, is much greater.  You’ve converted that consulting from “one-to-one”, to “one-to-many”. 

And what if you recorded that training, added the notes, and made that package a “product”, and product which could be sold again and again?

The logic is unstoppable, and that is to reduce the consulting time to the minimum, and spend more time into creating products which can then be turned into both training, and leverage. 

The effort of creating the product is a one-time effort, and it brings on-going revenue.

“Every product then generates its own revenue, which then brings more training. That’s how it just feeds back into the system. But at the very core, you have these three parts, and your job is to reduce your consulting, which takes up most of your time to ½ or less than ½.”

And reducing consulting creates time which can be more profitably used elsewhere, whether it is in “product creation”, or taking a much-needed break, as Sean does.

The point is how are you going to make time? This is what the Three-Prong SystemTM does really well. It says that, if you start to increase your leverage, if you start to increase your training, you will do less consulting. Now people will say, “I love my work. I love my consulting.” Sure, so keep as much consulting as you want. But have bigger chunks of training and leverage, because that will allow you to choose your clients.

That will allow you to name your prices. That will allow you to do your consulting in a way that’s richer and better for yourself and for your clients. You can’t do that when you have to chase after every client that calls you.”

Once you understand where your business comes from, you can analyse what’s good for your business and personal health.

Can everyone do this?” No. It is specifically designed for people who have control over their own time. And that is a self-employed person.  Technically they have control over their own time.  When you work for someone else, you may have some flexibility, but ultimately, you’re bound by the requirements of management.

There is one other point to consider; you can’t jump straight away into all three prongs.  If your training, and products are to be successful, you first have to establish your credibility.  And that will usually start with consulting.  Consulting keeps you on your feet; clients ask questions you’ve never considered before, and you know the answers.  Now that doesn’t mean you can’t start with a product, and consult/train in that field to build sales, but for most, it will start with a service skill.

Making more productive use of your time creates time.

Note:  The content of this blog post is based on a podcast by Sean D’Souza.

Do you know where your business is coming from?

When clients approach me for coaching, clients with businesses that are underperforming despite the crippling hours and effort the owner is putting into them, it is not just marketing that is holding them back.  They so often lack a management mindset, and lack control over their business.  Eight times out of ten that lack of control comes down to a lack of knowledge of what is happening in the business, and where their business is coming from.

For more than 29 years I’ve been helping small business owners plug the profit leaks in their business and restoring their cash flows by assisting them understand the information they need to have control over their business, how to manage and analyse it, and how to answer that critical question – WHY IS IT SO?

If you would like to discuss with me how you might do that, book a Strategy Consult here. 

© Copyright 2016 Adam Gordon, The Profits Leak Detective 

Two critical Decisions

The American baseball player and manager, Yogi Berra, supposedly said: “If you don't know where you're going, you might not get there.”  I was reflecting on a client’s journey from the depths of despair, and the ultimate outcome of such despair, to being a national authority in his field, heading a profitable business, with another giant step upwards in front of him.

That journey has inevitably followed a rocky path, hindered by various pitfalls, obstacles, false tracks that lead to nowhere.  But as he got back on track each time, and traversed the path, the road ahead became clearer, firmer, and broader.

Let me tell you a little about the client, and the business.  Obviously, I can’t tell you the business name, or even the industry.  I can tell you he is a professional, with a staff of about ten permanent or part-timers.  Let’s call him Tom.

An intriguing part of the story is that in terms of his market, he operates in a niche within a niche – very focused.  That is a key part of the story.  It makes my client, and his business very different.  He is certainly not a “match in a matchbox”.  Despite such a narrow market base, it has enabled him to deepen his market and broaden his offerings.

But that is not where Tom started.  He commenced in his business covering the entire local market. Some years later Tom narrowed his focus to just one niche, but covering all aspects of that niche. 

He then narrowed it to the ‘niche within a niche’; a brave move.  Now we all want to grow our business (Do you want or need to grow your business), but it’s how we do so that matters.

So many businesses I know try to market to everyone, so afraid are they of losing a sale.  And their marketing message is to everyone, and as you will know, a message for everyone, is a message for no-one (Does your marketing tail stretch to the sea?) 

But Tom’s move to have a specific, narrow focus worked, at first.  The business grew rapidly, in part because he expanded his offering to this narrow market, training his fellow professionals, and selling them products to help them in their business.

This is known as the Three Prong Strategy, although Tom didn’t know about that. 

Prong one is one-on-one servicing your client, but you are limited by the hours you can spend, and how much you can charge for them. 

Prong two is one-on-many, and training is a good example of that.

Prong three is leverage, where products provide passive income. 

Business doubled every year, for a number of years, but this came at a cost – burnout.  He was doing all the work himself, principally Prong One, working 100 hours a week.  That is the danger in being reliant on Prong One.  You can only grow revenue by working more hours, or increasing prices.

But this lead to some of the false tracks which took Tom off his path.  First, to solve the workload problem, he bought in more professional staff.  It didn’t work out.

Then a partner was bought into the business, to spread not just the workload, but also the responsibility.  When that partner left, Tom was close to bankruptcy.

At that point, two key decisions were made:

1.    To focus even more specifically on the ‘niche within the niche’, limiting services to only one or to services in the base niche.

2.    To seek outside advice and mentoring

When you completely specialise, you become the “go-to” person in that market, the brain surgeon, not the GP.  However, if you stick to Prong One, as a professional you are limited by your geography; the time and price dilemma. 

So greater emphasis was placed on Prongs Two and Three.  The market comes to you, rather than you going to the market.  Professionals seeking Tom’s training have come mainly from Australia and New Zealand but have also included the US, UK and Saudi Arabia, Thailand, Canada, and South Africa. 

The second key decision relates to that common problem of being a professional, and not running a professional business.  As I discussed in “Will you be Road-Kill on the Business Road?” “one large hurdle that must be cleared in a business is the trap of treating the business as a job, what you do, and not a business. 

That is why it is so important to go into your business with a plan – plan your entry into the business, and, just as importantly plan how you will operate.  You need to be aware of each part of your business, and how it will operate in the plan.” 

Business Consultant Ben Fewtrell put it well - “The people that are self-employed earn money.  The people that own a business make money.”  So many businesses fail because they never learn the basics of how to build and run a business.

And that was the step Tom took, to learn how to run his business, as a business.  We developed:

A clear view of the road ahead (Can you see the road ahead?)

Paved the road to success with good information; the information needed to manage the business, disperse the fog of uncertainty, and give a clear view of his world. 

Implemented a consistent marketing calendar across all three prongs

Business management and staff management skills

There are now four, clearly defined lines of business, with the sales, costs and profits known for each.  Profits have become consistent, and increasing, instead of fluctuating from profits to loss.  Cash flow is watched, but no longer a problem.

The next step is planned, and will take Tom, and his business to the stratosphere. 

What are the Takeaways?

You have to know where you are taking your business.  If you are just treating it as a job, then it is unlikely you are taking it anywhere;

Good, regular management information is imperative for good decision making.  Where are your profits coming from?

Narrowing your market (niche) allows you to deepen your market and broaden your offering.  You will have greater depth and reach.

Develop a marketing calendar.  Consistent, regular marketing is required.

Build a team.  You can’t do it all yourself.

There are no silver bullets, building good businesses takes time.  It’s continuous, incremental improvement that makes the difference.

Tom’s business knows where it is going, and it will get there.

Do you know where your business is going?

When clients approach me for coaching, clients with businesses that are underperforming despite the crippling hours and effort the owner is putting into them, it is not just marketing that is holding them back.  They so often lack a management mindset, and lack control over their business.  Eight times out of ten that lack of control comes down to a lack of knowledge of what is happening in the business.

For more than 28 years I’ve been helping small business owners plug the profit leaks in their business and restoring their cash flows by assisting them understand the information they need to have control over their business, how to manage and analyse it, and how to answer that critical question – WHY IS IT SO?

If you would like to discuss with me how you might do that, book a Strategy Consult here. 

© Copyright 2016 Adam Gordon, The Profits Leak Detective 

This Checklist will Help

Tenders take time, and effort.  If you have to put a lot of both into your response, you will put yourself under pressure.  And you know what happens then; mistakes, typos, forgetting to add final details, not enough time to review and edit.

A poorly thought-through and presented response can do you damage and tarnish your reputation in the marketplace.  Your response gives the client an impression of the overall professionalism and capability of your business; lack of attention to detail, or signs of being rushed, will not fill the prospect with confidence.

First impressions matter and a bid often provides your client with the first insight into the professionalism and commitment of your business.

One of the reasons for the lack of success is the poor quality of tender submissions.  In fact I often suggest to clients, that if they can’t prepare a professional response, they shouldn’t respond at all.  A low price will not overcome a poor response.

Why submit Tenders & Proposals

If it takes so much time and effort, and can damage your reputation, why step into this minefield?

Whatever is happening in the economy, there’s never a shortage of Requests for Tenders or Proposals being issued.

Governments are usually the biggest buyers of goods and services in most markets, a major source of business, as mentioned in "How to Overcome the Bureaucratic Burden of Compliance".  Winning on-going government contracts is provides an important additional line of business, although I would suggest not making it your only source of business.

Some businesses are dangerously dependent on one or two customers, and the most dangerous number in business is one ("A Dangerous Business Number").

Tendering and winning ongoing contracts is an important way of providing your business with long term stability, and allows you to build your reputation through providing services to high profile Government and corporate clients.  Anyone who is serious about building their business must respond to tenders, but needs to respond professionally to have any chance of being successful.

If you haven't done it as yet, your you need to assess your current capability to submit persuasive tenders, and where the gaps are in that capability; what do you need to put in place to do so, with minimum effort and maximum effectiveness.

How to Assess if You are Tender Ready

When it comes to the competitive bid response process, business doesn't reward runners-up.  You either win or lose.  If you are not prepared when the RFT is released, the chances of winning are not high.  To avoid the problems of rushed tenders make sure you are tender ready!

Here’s a checklist that might help.

Score yourself on a scale of 1 – 10, where 1 demonstrates complete lack of readiness, and 10 complete readiness.

1.    Have you identified and documented the types of projects on which you are best suited to tender?

2.    Do you have a documented “bid - no - bid” decision procedure, assessing the competition, the likelihood of winning, the likely profits, and impact on your other areas of operation? 

3.    Do you have documented project plans, and contract management plans for each of your main area of activity to demonstrate how you will deliver the solution?

4.    Do you have a database of past tenders or samples of tenders in your principal areas of interest that you have analysed and developed draft responses?

5.    Can you demonstrate experience in meeting requirements of a similar nature, scope and size?  Is this experience documented in a form which can inform a tender response? Do you have a list of referees for these projects?

6.    Rick Management Plan – do you have a documented Risk  Management Plan that will demonstrate your ability to prevent or mitigate risks likely to arise in the types of projects in which you are interested?  Have you sample Contingency Plans for such projects?

7.    Community benefits –  Governments frequently look for community benefits from their projects such as employment,  training, procurement, etc.  Can you demonstrate the community benefits you would bring to your identified target projects?

8.    Capacity and capability – can you demonstrate your capacity and capability to meet typical project requirements?  This will include equipment, personnel, and finance.

a)    Have you documented evidence of the plant and equipment you will allocate to a typical project?

b)    Can you demonstrate the Project team/management structure which would be deployed for a typical project, including their roles and experience in such projects?  Are their CVs to support this readily available?

c)    Can you demonstrate your ability to fund a typical project?

d)    Can you demonstrate your documented processes and procedures to ensure payment of employees, subcontractors and creditors?

9.    Quality Management – do you have documented Quality Management  System?  Are you ISO9000  accredited? 

10.    Insurance – can you demonstrate current Public Liability, and Professional Indemnity (if required) Insurance, and appropriate Workers’ Compensation Insurance?

11.    Do you have a documented Project Control System in place?

a)    Operational Plan

b)    Work Health & Safety Plan

c)    Environmental Management Plan

12.    Do you have documented tender submission methodology, including how you analyse the RFT, understand the challenges leading to the requirement, identify the “hot buttons”, develop a Unique Value Proposition, develop a winning strategy, develop a project plan, and put in place a project team with assigned roles?

If you are not tender ready, and seek success in government tendering, now is the time to start preparation.  Put together your tendering library, and be ready for to respond.

A tender is a business transaction, so be TenderWins ready, and give yourself the time to be professional.  

Would you like to tell me about your tendering experience?

It will come as no surprise to you that I’m working on a new online course to help people win more tenders.  My course will help you learn how to submit well presented, persuasive responses so that you win more tenders, without stress or feeling under pressure.

You will discover responding to tenders is no longer a complex, unclear burden, nor costly and demanding.  You will learn how to prepare for, analyse and persuasively respond to tender requirements.  Winning more tenders will take the stress out of your life.

The course will be around eight weeks, with a new module each week delivered on-line, followed by a face-to-face webinar towards the end of each week to discuss participants’ questions and learnings from each module.  Participants will build their skills step by step, reinforcing their learning.

We’ll be doing practical exercises based on your real-life experience with tender responses, identifying and working on the opportunities for improvement.  Activities will be based on a Case Study.  Where possible, participants will be asked to utilise an unsuccessful tender they have submitted.  For those who have not yet submitted a tender, I will supply a real RFT, with some appropriate alterations.

But I would like to draw on your real-life experience in designing the course.  If you would be happy to have a chat about it, sThis email address is being protected from spambots. You need JavaScript enabled to view it.l with “Discuss TenderWins” in the subject line, and I’ll set up a telephone or Skype call. If I can’t help, I will suggest someone who can.

© Copyright 2017 Adam Gordon, The Profits Leak Detective 

You don’t get a second chance to make a first impression

Proposals are like presentations - they need to be engaging.  And it starts with your Executive Summary.  You need to draft a compelling Executive Summary so that the Assessor wants to read more. 

You’ve put blood, sweat and tears into that tender response or proposal.  It’s cost time and effort, time that could have been expended on other money-making activities.  But you know your response is important.  It could lead you into a new market, or cement your position in an existing one.

Your response is not a tick-the-box test; it’s a race.  And as in any race, there can only be one winner. While many of your competitors may respond to a tender, only one business will win the contract. You can waste weeks, months or even years responding to tenders, without any guarantee of success.

What is an Executive Summary and Why it is Important

The opening section of your response is usually the Executive Summary.  It summarises the key elements of your response the Assessor reads before getting down to the detail.  You need to condense how your understanding of their requirement, the problem they’re trying to solve, your value proposition, briefly describe how you are going to deliver the solution, and why they can be assured you will.

It lets the Assessors know upfront you clearly understand what the outcome they are seeking and tells them where they can find the information that meets the Assessment Criteria.

Simplifying the complex issues you deal with in more detail in your response is no easy task. But, it’s definitely beneficial for the Assessor (and you) when you can do it and do it well.

A good proposal is about the prospect, not you.

What should go into your Executive Summary?

By the time the Assessor has read your Executive Summary you want him to already have a tick in his mind.  Your Executive Summary should be persuasive and make a compelling case for the contract to be awarded to you.

Open with your understanding of the requirement and what the prospect is seeking to achieve.  That means more than just restating the title of the tender, or its Scope of Work.  Demonstrate your understanding of why the requirement is there, and the difficulties or challenges the prospect may have. 

So make the effort up front to understand their needs and challenges.  That mean research.

Follow with your Value Proposition.  This is like an Elevator Pitch.  In 1 – 2 concise sentences, make a powerful solution statement that expresses how your solution will more than meet their objectives, and add value.  Focus on results, using language that is specific and measurable.

Summarise your solution, and why your solution will meet the requirements.  But go beyond just meeting their requirement.  Demonstrate they will get real valuethey wouldn’t get elsewhere,

Next you summarise HOW your solution will address the prospects needs and challenges.  Highlight key features of your approach.  Acknowledge any perceived weaknesses and how these will be addressed.  Indicate where these are addressed in the body of your response.

In one paragraph, briefly summarise your relevant experience – provide specific, evidence-based  examples and reference contracts of a similar nature, scope and size.  Demonstrate that you’ve exceeded expectations in these contracts.

It's not just the experience. It is the skills, quality management, environmental management, contract management, project management,  people and equipment to do the job efficiently and effectively.  Choose you, and they won't embarrass themselves.

Now to validate why you are the only logical choice.  Identify the key benefits your solution provides.  The key here is to identify the key “features” in your solution, and importantly, what this will do for them – the “benefit”. 

Example:  Identify Feature A – "this means that (benefit)" and tell them how that meets the need or challenge.

Summarise your Value Proposition again and issue a Call to Action; propose a meeting to make a presentation, or if appropriate, a visit to your premises.

One last point – length.  This is the lead into the response.  You don’t want the Assessor to be wading through pages and pages.  They’ll have enough of that when they get into the detail.  Write tightly and restrict your Executive Summary to no more than two pages.

A persuasive and compelling Executive Summary will enhance your chances, not blow them.  Make a good first impression; don’t leave yourself scrambling to make up lost ground.

Would you like to tell me about your tendering experience?

It will come as no surprise to you that I’m working on a new online course to help people win more tenders.  My course will help you learn how to submit well presented, persuasive responses so that you win more tenders, without stress or feeling under pressure.

You will discover responding to tenders is no longer a complex, unclear burden, nor costly and demanding.  You will learn how to prepare for, analyse and persuasively respond to tender requirements.  Winning more tenders will take the stress out of your life.

The course will be around 8 weeks, with a new module each week delivered on-line, followed by a face-to-face webinar towards the end of each week to discuss participants’ questions and learnings from each module.  Participants will build their skills step by step, reinforcing their learning.

We’ll be doing practical exercises based on your real-life experience with tender responses, identifying and working on the opportunities for improvement.  Activities will be based on a Case Study.  Where possible, participants will be asked to utilise an unsuccessful tender they have submitted.  For those who have not yet submitted a tender, I will supply a real RFT, with some appropriate alterations.

But I would like to draw on your real-life experience in designing the course.  If you would be happy to have a chat about it, send me an email with “Discuss TenderWins” in the subject line, and I’ll set up a telephone or Skype call. If I can’t help, I will suggest someone who can.

© Copyright 2017 Adam Gordon, The Profits Leak Detective 

What do you think of me?

I was looking for an introduction to the problem many businesses stumble over in drafting proposal or tender responses, when I came across the following story by Value-Based Business Development Coach Bob Musial.

“My boss and I were escorted into the conference room. We waited for the Procurement Manager. It was a prospecting call on a pharmaceutical company. And while vendors could still go directly to people on both the promotional side and the clinical side, we were strongly encouraged to go through procurement first.

OK.  No problem.

Anyway, the Procurement Manager arrived after a few minutes. She introduced herself and sat down.

That’s when my boss launched into his “pitch.”

Problem.

It was all about the company, our products, our client list, his experience (mostly his experience) and a bunch of other stuff that I tuned out after about the first 10 minutes. I watched as the procurement manager’s eyes glazed over. Looked like she had tuned him out too.

There was a break in my boss’s self-aggrandizement about five minutes later. The procurement manager saw her chance and jumped on it. She used that very brief lull, turned to me and said...

“Don’t you have anything to say?”

To which I replied...”I like to listen first before I start talking. Figure I might learn something.”

She laughed and we had an instant connection. One that lasted and generated business for years.

A long time ago I learned it was more important to encourage others to speak first, especially a client or prospect. To let them empty their brain of whatever was occupying their thoughts. Then, I could refill it with appropriate responses.

Seems like my (ex-) boss never grasped that whole listening concept thing.”

OK, this anecdote is about a sales pitch, but if you read my last blog, you would be well aware that responding to a Request for Tender (RFT) or Request for Proposal (RFP) is a “sales opportunity”, except that the pitch is in writing, not face-to-face.  But without a well-written response you won’t get to that face-to-face meeting.

And here is the problem!

The opening section of your response is usually the Executive Summary.  You need to draft a compelling Executive Summary so that the Assessor wants to read more.  The Executive Summary is among the most important part of your response, and often the only section read by all Assesors. 

But so often tender responses open with a trumpet blast – about themselves, just like Bob’s boss.  How good they are, unique in fact, world’s best practice, latest technology, leading practitioners and on and on.  But that is not what the Assessors want to see.

What the Assessors want to see is that you understand the requirement and the problem they are trying to solve.  And they want to know right from the time they start reading your tender that you are singing their song.

It is an unfortunate fact that the majority of responses, even from large companies, begin with their song, not the clients.  A friend who was a retired senior Army office and often had to evaluate defence tenders once told me that his eyes would begin to glaze over with the umpteenth rendition of a ME-ME response – leading with themselves from the opening paragraph.

Your response will stand out from the competition if you open with the agency’s requirements.  Sing the Assessor’s song and bring a smile to their faces.

Demonstrate to the Assessors upfront that you understand what they are trying to achieve, and only then that you have a solution to their problem.  Show that you understand the outcome the RFT or RFP is designed to achieve.  They are not buying your product or service as such.  They are buying what that product or service will do for them. 

You will create a favourable impression in the Assessors mind if you are able to demonstrate a depth of understanding of their requirements in your opening paragraph.  That means researching the background to the requirement and what lead up to it.

An example - we won a nationwide tender from a Commonwealth agency for my wife’s conference and event management business in part because we were the only tenderer to research the background to the requirement and what the client was seeking to achieve.  And that is what we opened with – them, not us.

Only once you have demonstrated your understanding of what they are seeking to achieve, and their problem (talking about them), should you start talking about yourself, demonstrate you have the solution, how you will deliver it, and why you are different/better.  Now you can present your compelling case.  That is when you will find out what they think of you.

Would you like to talk about yourself?

Would it surprise you that I’m working on a new online course to help people win more tenders?  My course will help you learn how to submit well presented, persuasive responses so that you win more tenders, without stress or feeling under pressure.

You will discover responding to tenders is no longer a complex, unclear burden, nor costly and demanding.  You will learn how to prepare for, analyse and persuasively respond to tender requirements.  Winning more tenders will take the stress out of your life.

The course will be around 8 weeks, with a new module each week delivered on-line, followed by a face-to-face webinar towards the end of each week to discuss participants’ questions and learnings from each module.  Participants will build their skills step by step, reinforcing their learning.

We’ll be doing practical exercises based on your real-life experience with tender responses, identifying and working on the opportunities for improvement.  Activities will be based on a Case Study.  Where possible, participants will be asked to utilise an unsuccessful tender they have submitted.  For those who have not yet submitted a tender, I will supply a real RFT, with some appropriate alterations.

If you would like to discuss if this is a good fit for you, send me an email with “Discuss TenderWins” in the subject line, and I’ll set up a telephone or Skype call. If I can’t help, I will suggest someone who can.

© Copyright 2017 Adam Gordon, The Profits Leak Detective 

It may be simpler than you may think!

No doubt you have been in this situation at some stage in your business life.  You may want to break into a new market, or expand your foothold in an existing market, or, heaven forbid, you desparately need more orders for your business.

So you look at that great pot of gold of government business - money, income, revenue.  Government procure largely through tenders.  And they are big spenders.  For example in 2010 – 2011 the Australian Government let 79, 286 contracts value at $32.64 billion. 

The NSW Government is understood to spend about $12.7bn on goods and services each year.  During 2011 the NSW Government awarded 70% of contracts to SMEs (entities with 200 or fewer employees).  The remaining 30% of these contracts were awarded to non-SMEs (ie: large entities with 200+ employees).

The NT Government is the major buyer in the Northern Territory, procuring over $800 million each year. 

The largest single source of contracts in each jurisdiction is the Federal, state or territory government.

It is not just government that procure through tenders.  Businesses do also.  The larger the business the more formal will be its procurement processes. There are some differences of course.  The bigger the government decision, the more likely it is to drag.  The private sector is less averse to risk and typically makes their decision in a much shorter timeframe. 

But the more formal the private sector’s procurement processes, the more likely the same mistakes are likely to creep into respondent’s submissions. 

Writing tenders and proposals bedevils so many people.  It requires a different type of skill than the one they trained in, yet it can be so important to growing their business.

Many think the only way to win a tender or quotation is to lower their price; but doing so destroys their margin. 

Price is always important, but there are many other factors in writing a successful tender, proposal or quotation.

So learning how to avoid the tendering pitfalls will make a significant difference to your business.  More on that below.

I remember my moment of epiphany about government tendering.  It came about because I was tired of businesses complaining about the problems of tendering to governments:

It’s too complex, it’s too bureaucratic, it takes too long, it’s biased, repetitive, small businesses can’t win, big business has an unfair advantage, the requirements aren’t always clear, it’s too demanding, it’s too costly, it’s confusing – on and on and on.

You’ve no doubt heard them all as well, if not experienced them.  It doesn’t take much research to find such complaints are common not just to Australian federal, state and territory governments but also to overseas jurisdictions.

The killer requirement is “COMPLIANCE”.  So often, when responding to a request for quotation or tender, the detail the customer is asking for becomes a bureaucratic burden, particularly when the customer is a government agency.  So much unnecessary detail.  The questions just seem to go on and on, requesting seemingly unnecessary and irrelevant information, or asking for the same information in different areas.

It all becomes a pain in the you know whatsit!  It is tempting, and many fall for this temptation, to rush through the information requested, providing the minimum requested to comply, and get to the perceived real requirement, which of course is the price. 

And as a result, because they feel they have to comply, and it’s a burden, their rushed response is likely to be a poor response.  Of course, poor responses don’t help your case.  They don’t make a persuasive response.

There is another way of looking at this, a way that may help your chances of winning considerably, a different way of looking at the same coin. 

Take a step back from the quotation or tender and consider how you might handle a normal commercial enquiry.  What is stopping potential customers from buying from you in a non-tender situation?  Customers won’t buy when they have possible objections in their mind, or when they feel there may be some risk in the deal.  You need to overcome the objections, demonstrate value, take away the risk and give them good reasons to choose you.

So what could some of those objections be?

• You haven’t done this type/size of job before?
• Can anybody actually verify what you claim?
• How do they know you know how to do the job?
• Will you be able to finish the job on time?

On the other hand they will probably feel some comfort if the product or service you provide has worked for others.  So you tell them:

• How have others found your service?
• Customers prepared to recommend you?
• Customers who will reassure the buyer as to your capability?

The customer doesn’t want to look a fool if something goes wrong.  So where are the risks?  You tell them:

• About your systems and procedures?
• How you plan projects?
• How you overcome the unexpected?

In a world of choice, why should the customer choose you?    So you reel of:

• What makes you different - your Unique Sales Proposition (USP)
• Your demonstrated particular and useful experience and expertise
• How you innovate to improve your efficiency and effectiveness?

One way or another, you probably go through this process of reassuring the customer to make the sale.  It may be verbally, giving the prospective customer examples of the work you have done, the successes you have had, the customers who will give you a reference.  Or you may have a company profile which includes this sort of information.

Whichever way, you seek to make your potential customer as comfortable as possible in dealing with you.  A decision in your favour becomes a comfortable and logical next step.

Now go back andlook at that bureaucratic burden you have been dealing with.  In most cases all that bureaucratic detail you have been cursing is doing much the same thing.  It is aimed at removing objections, reducing risk and giving the customer reasons to feel comfortable with you.

It’s the change in attitude makes it simpler than you think to submit a compelling response.  See that tender response as a SALES TOOL for you, and not a bureaucratic burden!  Turning that pain in the whatsit into a sales tool for you will not only give you a completely different perspective, it will also considerably improve your success rate. 

Just what are you wishing for?

Would it surprise you that I’m working on a new online course to help people win more tenders?  My course will help you learn how to submit well presented, persuasive responses so that you win more tenders, without stress or feeling under pressure.

You will discover responding to tenders is no longer a complex, unclear burden, nor costly and demanding.  You will learn how to prepare for, analyse and persuasively respond to tender requirements.  Winning more tenders will take the stress out of your life.

The course will be around 8 weeks, with a new module each week delivered on-line, followed by a face-to-face webinar towards the end of each week to discuss participants’ questions and learnings from each module.  Participants will build their skills step by step, reinforcing their learning.

We’ll be doing practical exercises based on your real-life experience with tender responses, identifying and working on the opportunities for improvement.  Activities will be based on a Case Study.  Where possible, participants will be asked to utilise an unsuccessful tender they have submitted.  For those who have not yet submitted a tender, I will supply a real RFT, with some appropriate alterations.

If you would like to discuss if this is a good fit for you, This email address is being protected from spambots. You need JavaScript enabled to view it. with “Discuss TenderWins” in the subject line, and I’ll set up a telephone or Skype call. If I can’t help, I will suggest someone who can.

© Copyright 2017 Adam Gordon, The Profits Leak Detective 

How you get it may become the problem!

You know the old saying – “Be careful of what you wish for; You may get it!”  Now we all wish our business was more profitable.  That’s fair enough, but it’s how you get it that can be the problem. 

The first reaction is to look at lifting sales; we must sell more.  Sell more, make more money – simple!  But that can bring its own problems, as I’ve addressed a few times.

•    “I can’t do that” – looked at the problems that can arise in seeking to increase sales

•    “What would you have done” – the perils of profitless cashflow

•    “Can you get off the sales treadmill” – putting all your effort into increasing sales, rather than the profitability of those sales.

But there’s another issue you need to address. 

A second, immediate reaction we have when looking to increase profits is to cut costs.  It comes to mind almost as quickly as the thought to increase sales, and is especially prevalent when times are tough.

But cutting costs can also lead you into unchartered waters.  As I discussed in “Do you make it easy for customers to buy?”, cutting costs can make it more difficult for customers to buy from you.

Larger firms cut costs.  However, for most small businesses their cost structure is fairly lean so there is little to be gained there.  In fact, trying to do something in the cost-cutting area could even further damage the business, and ultimately lead to reduced profit, rather than the hoped-for increase.

Let’s look at why and how this could happen.

People

There’s no doubt people are the largest cost for small and medium businesses.  They are often around 50% of more in many small businesses.  But customer service is a critical element in customer loyalty.  If staff numbers are reduced, the customer experience can become less than satisfactory, leading to loss of customers.

And sometimes you have to let go people who have been with you a long time, or have skills which are hard to replace.  That happened recently with a client; they had to let go a “front of counter” lass who had been with them a long time.  Losing her meant a loss of knowledge of the business, a face and personality customers knew and liked.  It has an impact on other staff, and their loyalty.

Don’t forget the training you have put into long-standing employees.  When things improve, you will have to recruit again (a cost) and train once more (another cost).

Training

The training budget is another target for the bean-counters in tough times.  There are two costs of training; the cost of the trainers and courses they provide, and the loss of productivity while your staff are out of action while being trained.

Of course there are very good reasons for training:

• Sales training - the skills to turn a lead into a sale & close the deal. 
• Product knowledge – when new products or services are introduced, your team need to know all the features and benefits of the new offering, and be able to answer customer’s questions, if they to make the sale.  It’s a very quick turn-off for a potential customer if the salesperson displays a lack of knowledge of the offering they are spruiking.  And you have to replace the customer you just lost.
• Continuous improvement – things change, technology keeps changing, customers beliefs change.  You and your team need to keep on improving, finding better ways of running the front end, and back end of the business.  When times are tough, your business needs to be as efficient as possible.  That means continually improving your business processes.

Marketing

Don’t laugh, I’ve seen it happen!  Times are tough; we need to cut the advertising or promotional budget.  Yet you need to keep marketing to keep those precious sales coming in.

Those who blithely toss such suggestions at you usually have little idea of the complexities of marketing and the messages you need to put into the marketplace to get a sale.  Consider this; it’s all about “awareness” - awareness drives your promotion.

Think about this – you can divide prospective customers into three groups:

• Wanderers - those not yet aware they had a problem you can solve.  For example, they don’t recognise the clues suggesting they might be leaking profits.  They will not bother to think about the thing you are selling because it is not on their radar.
• Explorers - Those aware they have a problem, a need to be met, but are not yet ready to make a decision about a solution. 
• Seekers - Those aware they have a problem, a need to be met. They have become consciously aware of a need to change the status quo, activating a heightened level of engagement.  They are ready to make a decision about a solution.

There are not many customers in the last, more in the second, and much more again in the first. 

Just think about the message you need to give each of these groups.  They will be different

Marketing is complex, and can be costly.  Simply taking the cost-cutter to it is likely to cost you leads, customers, and profits.

Be very careful of what you wish for!

So, just what costs are you going to cut?  The act of getting what you wish for may become the problem.

 Cutting costs can help tide your business over tough times.  There’s no doubt about that.  But it can be a short-term sugar hit, and leave you with on-going problems that cost you profits.

Just what are you wishing for?

When clients approach me for coaching, so often, they are not getting the clients they need, the right clients.  Eight times out of ten this comes down to not knowing what is working, and what is not working, and why it is not working.

For more than 28 years I’ve been helping small business owners plug the profit leaks in their business and restoring their cash flows by assisting them understand where there profits really come from, where they’re leaving money on the table, and where their sales are costing them profits.

If you would like to discuss with me how you might do that, book a Strategy Consult here. 

© Copyright 2017 Adam Gordon, The Profits Leak Detective 

Seven Ways To Grow Your Business FAST

We all want to grow our business, and by grow, I mean both in sales, but more importantly, in profits.  How might you do that?

1. Focus on the 20% -  Many businesses waste a lot of money on advertising because they are trying to target “everybody”.  They haven’t done the groundwork to identify the right market for their product and services.  It will be those 20% of your customers base who buy 80% of your offerings, and make 80% of your profits.   You need more of these “ideal clients” than “everybody”.  A message targeting your ideal client, as opposed to everybody will cut your waste to zero and start getting maximum return from all your marketing.

2. Fine tune your Unique Selling Proposition (USP) -  If you are still competing with other businesses, then your USP needs work.  Your USP must target your ideal client; it can’t target “everybody”.  Your USP must make your business the only possible choice for your customers.  No one USP can be meaningful to “everybody”. 

3. Bundle – Bundling is a more sophisticated form of upselling.  When you make a bundle of things you are already selling and create a package with a compelling price, you are creating bonuses to the basic offer, and you can often make a lot more money.  Sean D’Souza calls it the “Yes and Yes” offer, moving from the “Yes or No” offer.  When people are not ready to buy, they are hard to tempt.  But when they’re ready to buy, they’re looking for the best deal they can get.  If the bonus is structured correctly, people will feel the need to buy the bundle for the bonus alone if it adds real value. 

4. Offer more ‘done for you’ products – Done for you products are those products or services which take an idea or concept a person has, and converts it into a complete sales package.  Not everyone has the expertise to create the product, let alone put together the templates to sell it.  People want more “done for you” offers. They are increasingly more appealing. And they are willing to pay just to get it done. What ‘done for you’ package(s) can you offer your customers?

5. Sell to groups – Most businesses, whether bricks and mortar or online sell one-to-one.  But you can sell one-to-many through workshops, training courses (whether offline or online) or webinars.  Obviously, there is more time and effort creating the course or webinar, but there can be a much greater return.  When you get good at selling to groups you can make significantly more per hour.

6. Get better at email marketing - Competition for attention in your email in-box is at an all-time high. Too many business owners are sloppy and don’t give enough care to creating good, relevant, compelling messages—consistently.  Research tells us that email marketing is still the number one way for businesses to communicate directly with customers.

Each year, the (American) Direct Marketing Association ranks marketing channels by the return on investment they generate.  Email has lead their rankings for some years; in 2010 they projected that email marketing would return an average of $42 for each dollar spent, down from more than $43 in 2009.  Email is the leader by more than a nose; the #2 channel was Internet search advertising, which returned just under $22 per dollar spent in 2009.

7. Resurrect the dead - You might be surprised how many of your customers have “gone missing”. Have a resurrection campaign to restore ‘dead’ customers; previously good customers who have inexplicably dropped off the perch.  Bring the dead back to life; this may involve gifts or special offers.  It should acknowledge that they haven’t used you for a little while, or that maybe you have done something that discouraged them.  Apologise and what you can do to repair the relationship.  Give them a reason to come back.

Incremental Improvement

Using one or more of these six tools will increase your income, and profits.  Doing all of them could make a tremendous impact.   Pick one or two to start and once you’ve implemented them, move on to another one (or two) on the list.

It’s all about sales, and profits.  You might find some related blogs of interest:

•    5 More Ways to Leak Profits
•    Does you marketing tail stretch to the sea?
•    When Shouldn’t You Increase Sales?
•    Is it What You say?
•    More Uses of the 80-20 Rule
•    Why the 80-20 Rule is So Useful

Have you asked the Million Dollar Question?

When clients approach me for coaching, so often, they are not getting the clients they need, the right clients.  Eight times out of ten this comes down to not knowing what is working, and what is not working, and why it is not working.

For more than 28 years I’ve been helping small business owners plug the profit leaks in their business and restoring their cash flows by assisting them understand where there profits really come from, where they’re leaving money on the table, and where their sales are costing them profits.
If you would like to discuss with me how you might do that, book a Strategy Consult here.

© Copyright 2017 Adam Gordon, The Profits Leak Detective