Here are profitability ideas for sales, marketing and customer activities.
#21 – Know which of your marketing activities produce the best results
Effective marketing is a combination of the right message sent to the right target customer using the right medium.
Right message: What is the purpose of the marketing? Is it to get the telephone to ring? Give customers simple actions to take to be more comfortable in their home or office? Building your brand? Make sure you know the purpose of the marketing you are doing and it clearly states the desired action by the recipient.
Right target customer: Who is your ideal customer? Talking to people who can’t make decisions, are not responsible for the heating and air conditioning in their home/office, or are too far geographically to serve profitably is a waste of money. Find out where your existing customers are and market around them.
Right medium: Where do customers find information when they need heating or cooling services or replacement? My bet most of the time when you ask, it is a referral or they see your truck which leads them to your website. Most people tune out ads because they are inundated with them.
Whenever someone contacts you, please ask how they found your company (if it is someone who has never called before). Tally and track the results.
This is where you should place your marketing efforts – they will produce the best results.
#22 – Know which of your sales people produce the best results
Burning sales leads is one of the greatest hidden costs of business operations. Here’s what I mean:
Salesperson A and Salesperson B each have the same average sales price.
Salesperson A’s closing ratio is 25%. That means for 10 leads that you give salesperson A you will win two and a half sales.
Salesperson B’s closing ratio is 50%. That means for 10 leads that you give salesperson B you win five sales.
Salesperson A is killing you by burning leads. His effectiveness is half Salesperson B. Why not give all the leads to salesperson B who has double the closing rate of salesperson A? (or, what if salesperson A got trained properly and increased his closing rate and average sale?)
Salesperson ineffectiveness will kill your bottom line.
#23 – Know who your most profitable customers are
Along with marketing tracking and sales tracking, determine who your most profitable customers are. Who are the ones with the highest net profits per hour? Who always invest in high efficiency equipment?
And, on the flip side, who always wants a cheaper price or to negotiate a price break? Who are the customers that are never profitable for you?
Model both. Then market to the customer types with the highest net profits per hour. You will increase your profitability.
Next week: Final two ways to increase profitability.
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Books/Audios that could help your business and you.
Casey Brown makes an interesting case for whether you should raise prices and how to raise prices if you decide to do so. She has implemented what she suggests in the book and gives you stories from companies she has helped change their pricing strategy.
Click here to order on Amazon: Click Here