One simple way to increase profits

By Stuart 7 years ago1 Comment

How do you increase your profits?

The most common reply I hear is “get more customers”.  However, getting more new customers can take a long time and be costly.  Instead, wouldn’t it be easier to sell more services to existing customers?, the customers who already have an established relationship with you and like the service/ product you provide. 

When trying this approach, an common mistake is to market every service you provide to every customer.  The problem with this is that the one service a customer needs may be hidden in the middle of a list of loads of services or you may be marketing inappropriate services to the wrong customers.  For example, there would be little point in me sending marketing messages about payroll services to all my clients who work alone.  They (currently) have no need for this service and it would be obvious that I wouldn’t have put much thought into their needs.

How to get the right messages to the right customers

There’s a simple and practical way to get the right messages to the right customers.

Firstly, open a blank spreadsheet.  Start at column “B” and list all the services/products you supply across the remaining columns.

Then, in each row, list the name of each of your existing customers.

Once you’ve done that, work through each customer and “tick off” the services they currently buy from you by highlighting the relevant cell.  When you’ve finished doing this for every client, you’ll be left with a chequerboard effect, the white spaces being where customers doesn’t buy those services from you.  You’ll be amazed at how much “white space” there is left!

The second, and equally important, stage is to work through the list again, this time highlighting irrelevant services for each customer e.g. payroll for single person businesses.  Once you’ve done this, you can start to market your products/ services intelligently to the customers who may have a need for them.  As customers buy more from you, you can update the matrix, crossing off each service as it is purchased.  Once the spreadsheet is completely shaded in, you know you’ve maximised your income potential.

Categories:
  Business DevelopmentProfit Improvement
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One Comment

  • Jim Connolly says:

    An even better way for people to increase their profits Stuart, is for them to give you a call and ask if you will look after their business.

    In an age where most SME accounts are bland, generic and lacking in entrepreneurial awareness, you know your stuff and deliver it in plain English.

    As you know Stuart, I’ve worked with a lot (too many) accountants over the past 15 years and you are one of the VERY few that really understood the needs of small and medium sized businesses.

    Oh course, they should also crack-on with your spreadsheet idea. 😉

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