Blog

Fire customers

Okay – you’ve looked at your customers, and you have tried to increase the profit you make from each one of them.  You’ve tried all the tips and tricks you think are appropriate to your business, and you find at the end of that process that you are stuck with some unprofitable customers.
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Change the mix

So how do you manage to change the mix?  You need to research what you can sell to your customers that gives you a higher margin.

Look at your competitors.  Do they have a different mix?

 

So how do you manage to change the mix?  You need to research what you can sell to your customers that gives you a higher margin.
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High volume v high margin

Most business sell a variety of products and services.  Some businesses know their overall margins, so an electrical wholesaler may say that his margin is 20%.
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Public Relations

Your aim is to get a story published about you and your business, without putting your hand in your pocket.  Your piece will have to be interesting and relevant to the publications you have targetted.

 

For most people this is unpaid advertising.  But of course you have to have a newsworthy item to get in to the press in the first place.  So you are helping the newspaper or website fill their pages.  Right?
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Look at your advertising again

Space advertising – newspapers and magazines are a traditional place for advertising, and while a declining number of people actually read newspapers, for some age groups and categories of customer advertising is a good spend of your budget.  Sometimes trade magazines have a longer shelf life, and if you don’t already know what publications your customers already read now is the time to find out.
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Marketing mix

You need to change the pace every so often.  As well as promoting yourself and your business directly to customers, you may need to look at advertising and other marketing to get your message out there.

 

Don’t expect every one to jump at every marketing tactic.  If all marketing worked, then we could just take a one-size-fits-all marketing plan and impose that on each business in the country.  
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Marketing = change = stimulus = action

A lot of small businesses have no marketing plan at all, so if you do any marketing – congratulations, you are way ahead of the competition you face in the small to medium sized enterprises markets.  

 

If you don’t want to increase the profitability of your business, read no further.  And with any luck, your competitors won’t have made it this far either.
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Sorting the wheat from the chaff

We have spoken about new customers, old customers, new products and services, and existing products and services.  Now lets talk about a subject which is taboo for many businesspeople, particularly small, struggling and unprofitable businesses.

It is an accepted fact that 80% of the final effect springs from 20% of causes.  An Italian economist Vilfredo Pareto, observed in 1906 that 80% of the land in Italy was owned by 20% of the population; he developed the principle by observing that 20% of the pea pods in his garden contained 80% of the peas.  The effect is known as the Pareto Principal.  How does this help us?
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Existing Customers

If your business is up and running and you have customers, these are the number one asset to your business.  They have already bought from you, you are entitled to promote yourself to them.  The fact that you are already sending them statements, invoices, maybe even meeting them on a daily basis means that you have every excuse to communicate with them.  

That your customers came to you means that you served some of their needs at some point in time.  You need to look at what the need is or was and continue to satisfy that need.  It is vital that you find out what it is they will want in the future and try to anticipate that.
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New Customers

You have hooked them, they are in the shop, or they are ordering from you regularly.  The new customer will have to be looked after in the first few weeks and months of dealing with your business.

The new customer may have left another supplier for a good reason.  If you are lucky you will be able to find out the reason and take particular care that the customer does not leave you for the same reason.  For repeat customers the first few experiences with your business will be crucial – if you let them down in this period, they may move on to another new supplier.
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