Increasing sales may not be good for your business. Are you crazy, you say? Not at all. We often are concerned that we have more customers than ever before but aren't making more money. There is a very easy answer. The solution can be found in an analysis of your customers. There are a certain level of customers or clients that make you money; about 20% and a group of about 10% that are costing you money. These are the one time buyer or the small quantity user. Costs that are amortized across the whole sales process decrease per unit when tied to larger quantities. That means that the 80% of small customers are costing you more than you are making.
You need to analyze your customers to see which group they each belong to. It is important that you direct your best marketing efforts at the 20% of customers who are improving your bottom line. Your middle group probably tends to be very loyal so special attention is not necessary. The bottom group are the customers that you fire. You can easily reduce your number of un-profitable clients by increasing minimum orders or convenience fees. In time your customer list will contain fewer names, but they will be the most valuable.
Doing a SWOT analysis and ROI study will show you where you should direct your best efforts. Losing a customer who is costing you money is no loss at all. Find your losers and eliminate them.
Showing posts with label business growth. Show all posts
Showing posts with label business growth. Show all posts
Wednesday, September 21, 2011
Monday, February 28, 2011
Happy Campers
A surprise to many business owners or leaders is the fact that their customers are not their most important asset. The most valuable asset you have in your company is your well-trained staff.
Happy and committed employees will build and maintain a strong customer base; disgruntled team members will do just the opposite.
Some of the most successful companies today have created employee models that seem frivolous and expensive, but the return in incalculable. Creation of a workplace Corporate Culture that is respectful of your employees while maintaining the bottom line is large part of your success. It guides how employees think, act, and feel.
Companies like Apple Computer, Ing, and Zappos have gone to extremes for their employees; you can even bring your dog to work. The fall-out from this is the line of talented people waiting to work for them. You can get the same results, on a smaller scale, with creative benefits that they'll value more than money. Studies have shown that money is rarely the prime motivator. Comp days, flexible schedules, production bonuses, wellness programs, unique, customized incentives, or at least a R&R area all lead to happy productive employees. In absence of these things, words of praise, respect, and compassion will work well. Empowerment is the key.
In turn, your employees will go out of their support to you. They will want to be knowledgeable, helpful, empowered, and courteous, This translates to an atmosphere where shopping, or whatever, is a pleasant experience. These customers and clients will tell their friends and that the word will spread.
These concepts should not be reserved for your management or sales staff. They should be applied to everyone from the janitor to the boss. Your goal is success and this is a very important component.
Happy and committed employees will build and maintain a strong customer base; disgruntled team members will do just the opposite.
Some of the most successful companies today have created employee models that seem frivolous and expensive, but the return in incalculable. Creation of a workplace Corporate Culture that is respectful of your employees while maintaining the bottom line is large part of your success. It guides how employees think, act, and feel.
Companies like Apple Computer, Ing, and Zappos have gone to extremes for their employees; you can even bring your dog to work. The fall-out from this is the line of talented people waiting to work for them. You can get the same results, on a smaller scale, with creative benefits that they'll value more than money. Studies have shown that money is rarely the prime motivator. Comp days, flexible schedules, production bonuses, wellness programs, unique, customized incentives, or at least a R&R area all lead to happy productive employees. In absence of these things, words of praise, respect, and compassion will work well. Empowerment is the key.
In turn, your employees will go out of their support to you. They will want to be knowledgeable, helpful, empowered, and courteous, This translates to an atmosphere where shopping, or whatever, is a pleasant experience. These customers and clients will tell their friends and that the word will spread.
These concepts should not be reserved for your management or sales staff. They should be applied to everyone from the janitor to the boss. Your goal is success and this is a very important component.
Thursday, August 6, 2009
Because We Always Did It That Way
Are your systems really as efficient as they could be? Have you calculated the actual time it takes for each task and how it may be improved with additional training of your staff? An easy measure of efficiency is a count of rejects. An accurate count can help you monitor material costs, labor efficiencies, and often employee attitudes.
The attitude of your employee can make or break your business. The idea of team building is not new, but is still not used as much as it should be. Employees who are invested in the outcome of their efforts and are true team members are more likely to contribute positively to your bottom line. Being team members helps employees take ownership and therefore do a more conscious job. They will care a lot more. Having input in their professional future helps their feelings of self worth and sense of being appreciated. Several studies have reported that many employees are more concerned with the culture and environment of where they work that with the paycheck. Of course the paycheck is important, but it is not the only driving force for a lot of people.
"Because we always did it that way" is a guarantee for failure. Not being open to change is an automatic roadblock to growth. Change should be the only part of your business that is consistent. Your business is a living thing that is constantly growing and changing. Become a fly on the wall and take a hard look at your processes. And keep in mind that flys don't have egos; the best thing you can do for your business is to get out of your own way. A successful enterprise is a reward in itself and plenty of fuel for your ego.
The attitude of your employee can make or break your business. The idea of team building is not new, but is still not used as much as it should be. Employees who are invested in the outcome of their efforts and are true team members are more likely to contribute positively to your bottom line. Being team members helps employees take ownership and therefore do a more conscious job. They will care a lot more. Having input in their professional future helps their feelings of self worth and sense of being appreciated. Several studies have reported that many employees are more concerned with the culture and environment of where they work that with the paycheck. Of course the paycheck is important, but it is not the only driving force for a lot of people.
"Because we always did it that way" is a guarantee for failure. Not being open to change is an automatic roadblock to growth. Change should be the only part of your business that is consistent. Your business is a living thing that is constantly growing and changing. Become a fly on the wall and take a hard look at your processes. And keep in mind that flys don't have egos; the best thing you can do for your business is to get out of your own way. A successful enterprise is a reward in itself and plenty of fuel for your ego.
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