Maximize And Optimize

3 Elements Critical To Growing Your Business

For many business owners a successful marketing strategy consists mainly of getting new customers. Of course bringing in new customers is important for every business but it is only a small part of the overall OPTIMIZATION equation

In order for your business to realize exponential growth, you must do the following three things:

1. Increase your customer base.

2. Increase the frequency of purchase of each and every customer.

3. Increase the average amount of each customer's purchase.

Your marketing must address all three of these areas in order optimize your business. However, most businesses spend almost 95% of their marketing dollars just on gaining new customers. What they don’t realize is that if they fail to increase their current customers' frequency and amount of purchase, they may be wasting valuable resources.

3 Steps To Steer Clear of One-Shot Selling

One-shot selling is when businesses take no pro-active effort to get some current customers to return. It's not that people never go back; it’s just that the businesses does nothing to give these customers a good reason to do so. The following 3 step formula gives you the tools you need that will keep customers coming back over and over again. This formula can and should be applied to every business.

Step One: Always capture the names and addresses and e-mails (if possible) of all of your customers.

Step Two: Systematically contact all of your current customers and simply ask them for more business.

Step Three: Offer them some kind of reward when you ask them for more business.

Even though this seems simple enough, I can promise you that any business that is struggling isn't doing it and 90% of businesses that aren't struggling could double their profitability - if they would follow these 3 simple steps.

If you follow these steps, it requires that you contact the customers either individually, or by a letter that is computer addressed and laser printed and sent to them. Don’t just send them a coupon in the mail on the back of a postcard.

Passing Out Coupons

What about a method of passing out coupons? It sounds like a good idea, but most of the time the people using that half-off coupon are looking for a cheap price rather than the best value.

Not only do you not make any profit from coupons like that, but it sends out a message that you have to give customers something for half the price because your product or service it isn’t even worth charging full price for it.

You have to pro-actively seek to work the back-end. If you already have sunk the cost of generating and nurturing a customer once, why not solidify the relationship and profit from him/her forever instead of letting your customers dictate what their buying habits will be how often they'll come back? Most businesses are reactive rather than proactive when it comes to re-selling their customers. It’s not difficult to do this correctly and profitably. It may be something as simple as writing them a letter or giving them a telephone call. Remember, if you don't ask for the business, your competitors surely will.

Joint Ventures

If you want to leverage your time and marketing dollars, one of the best ways is to enter into joint ventures with other businesses. When looking to maximize profits, the first place you need to consider, of course, is reselling to your own customers.

Your customers are your business' most valuable asset. Therefore, you should be able to see the potential profits that are available if another business will make its customers available to you. This can be done in the form of consignment of goods, an endorsement or a more integrated joint venture.

There are two basic ways joint ventures can work. The first way is to let other companies play off your customer base and then you take a percentage of each resulting sale. The second way is to work a deal with other companies to make their customers available to you and then you pay them a portion of each sale.

The joint venture principle is simple. A business will spend a limited amount of time, money, and resources developing a relationship with its customers. The customers will have some level of confidence in that company and that will eventually translate into their willingness to respond to other offers made by the company.

For instance; a company might spend $45,000 a year in marketing and advertising, $70,000 a year on commissioned salespeople, and $7,000 a month for retail space. These, along with dozens of other expenditures add up to almost $250,000/year spent to develop customer relationships. Now, if you work a joint venture with the owner of that store, you can access all of that $250,000 spent – for simply the cost of a letter.

Joint Ventures (JV’s) Can Offer Your Business The Ultimate Financial Leverage

There are literally hundreds of ways for you to construct joint venture deals. However, you have to be willing to actively pursue and put together those deals. When presenting another business owner with your joint venture proposition, your initial approach is the most important one.

First and foremost, you will want to preach the benefits of the joint venture. Just simply asking him to endorse your product is not enough. You have to present the entire picture first to help him understand how it works. If the JV is too one-sided it will not flourish. A 50/50 deal is good, a 60/40 deal can work, whereas a 90/10 deal will eventually fade away.

The function of marketing a business through a JV can offer remarkable leverage. The great thing is that these concepts can be applied to almost any kind of business with much success as long as you keep an open mind and always continue to think outside the box.

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