Shifting Your Business Strategy – 1 August 3, 2009Posted by David Dirks in Increasing Your Profitability, Sales Strategy/Tactics, Sales Tactics, Solving Business Problems.
Tags: business development, business strategy, growth, IBM, marketing growth, markets, new markets, sales, strategy
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IBM’s movement from great to nearly dead to great again has been nothing less than one the greatest stories of business transformation yet told. I’m not going to recite all the IBM history but suffice to say that it has gone from great hardware/systems builder to now to the premier provider of consulting services. IBM is truly a big dog when it comes to high performance in shifting business strategy.
The shift from from hardware only focus began in earnest around 2002 when current CEO Sam Palmisano made the decision to buy PricewaterhouseCooper Consulting. While IBM still sells a lot of hardware, it’s shift into new lines of business via its consulting platform is growing faster and becoming its fuel for greater profitability.
The profit margins in consulting for IBM are far greater than those generated by hardware and even its software units. IBM has also defty sought out acquisition opportunities that can add to its shift to selling more consulting services. Not only that, but oftentimes selling consulting services leads to selling more hardware and software. What a harmonized business model if I ever saw one.
What does the IBM story mean to you? The question is really in your court: Can find opportunities in your business model that will allow you to shift and expand it to other related areas? Too many business owners are fast to recogize either the limitations of the revenue growth or the lack of (in this economy for sure) but slow to see other opportunities to expand revenue growth.
Does the IBM strategy shift apply to small businesses? Yes and any all other businesses as well. For example, let’s use the landscaping business, which typically is a small business model. Most landscapers just focus on selling physical services like cutting your grass or planting new trees, shrubs, etc. That’s the typical operating box for a landscaping business. However, what if that landscaping business offered a ‘consulting services only’ platform? That kind of business platform would just provide consulting expertise to those who wanted only that and not the physical labor component.
I’m a good example of that kind of customer. Personnally, I find landscaping, from cutting my own grass to planting trees to clearing areas for new grass, very enjoyable both physically and mentally. I don’t want anyone to do those things; I’ll do them myself. However, I’m not an expert on horticulture either. I could use some expertise on some landscraping projects I take on myself from time to time.
But in the local survey I did recently, most landscapers either don’t offer or don’t market their consulting services. It’s all about the physical services. Are there more people like myself who only want the expertise but not the manual labor? Perhaps. This example is just to show you that shifting your business strategy to related areas within your business model is possible no matter what business you are in.
I’m not saying that marketing & selling consulting services is the only shift you can make either. IBM is just a handy and well-known example of a successful and profitable shift in business strategy that most people can identify with.
Free-Analysis Marketing April 28, 2009Posted by David Dirks in business strategy, Increasing Your Profitability, Recession: How to Beat It!, Sales Strategy/Tactics, Sales Tactics.
Tags: competitive strategy, free analysis marketing, marketing, sales, sales stratetgies, Sales Tactics
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The Big Dogz always know how to keep applying what works in almost any market or economy. They’ll take advantage of marketing opportunities that other businesses either miss entirely or just sit on the sidelines wishing they had.
Take Scotts LawnService, which is a well-branded and nationally known entity established by the Scotts Company (yes, those same people who make the fertilizer and weed killers you use on your lawns each year). The local Scotts LawnService in my area sent out a mailer with one simple offer: A FREE lawn analysis. I believe I get one every year from them.
Their deal is simple. They come to your home and conduct soil samples that allow them to test for the ph levels of your soil and for other key ingredients that should be a part of a healthy lawn. That’s the part they do for free. The analysis is detailed and tells you what you need to do (with Scotts or without them) to improve the health of your lawn.
But there is another key part. They also include a price quote to provide the service necessary on your lawn to bring it up to snuff (if it needs it). That doesn’t cost you anything either. I’m not obligated to do anything with them and they know it.
Here’s the deal: they know that they’ll be enough people who also take advantage of their price quote to more than make up for those who don’t (and the expense of mailing them). The old true & tried ‘free analysis’ works time and again…as long as the analysis has some depth to it and isn’t shoddy.
Scotts has many competitors in this field of lawn care. Anyone with a truck, lawnmower, rake, weed whacker, leaf blower, and some ambition can get into this business. Whether they are good at it or not is another story.
I’m going to take a wild guess that many of the lawn care & service operators are having a tough time of it right now. How many of them do you think are coming up with ways like this to improve their chances of survival?
Oh, one more thing. Scotts also offers a ‘satisfaction guaranteed’ policy. “…we guarantee you’ll be thrilled. And if not, we’ll do what it takes to make it right.”
That’s another way to insure you survive. Guarantee your work. Between that and the free analysis, it’s no wonder Scotts LawnService remains in business year after year. The Big Dogz always know how to apply the right pressure and do it assured that their competitors won’t.
Beating A Recession – 12: Blow Up the Brick & Mortar! February 23, 2009Posted by David Dirks in business strategy, e-Small Business Resources, Increasing Your Profitability, Innovation: Not Just for the Big Dogz, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics.
Tags: beating a recession, online marketing, online sales, retail strategies, service business strategies, website sales
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Want to save a significant amount of annual expense and increase your profitability…and lower your cost of goods and services so you can remain competitive? Sure you do. However, many of us are still married to the concept of having a retail or service space to conduct business. I’m challenging that right here and now.
First, instead of investing dollars in ‘brick and mortar’ retail or service space, invest heavily in transferring your ‘place of business assets’ to your website and create an intranet that allows your employees to work remotely.
The growing trend is for businesses to move their infrastructure investments into creating a better user experience on the web and being able to conduct their business via the web. Invest and make your website so customer-friendly and seamless to use (navigation and purchase-orientations) that you no longer relay on a ‘physical’ presence in order to be able to conduct business.
Case in point. I have a friend of mine who recently decided to close down her retail shop that sold hiking and camping equipment. It wasn’t too long ago that she had expanded her ‘brick and mortar’ presence to increase her retail space. Then the economy took a hit and gas prices jumped. She then decided to close the retail business. However, she didn’t give up. She had maintained that retail space for over 10 years and had built up relationships with her customers, who were both local and national. She already had a pretty good website that contained excellent information of value to her customer base. On top of that, she and her husband have a gigantic amount of expertise (intellectual capital) built up based on years of experience in the outdoors. Why waste those assets just because the retail space was bleeding the business?
So she decided to invest time into expanding their website so that customers were still able to come and tap into their expertise and knowledge but also make purchases on the web. She is in the process of transforming her business onto the web and creating a customer experience that made them popular for many years. Note: She’s still refining the website to her satisfaction so I promised her that I wouldn’t reveal it. Once she is operational, you’ll hear about it via this blog.
Before you say, “So what? Isn’t everybody doing that?”…the answer is no, few local business invest in creating a robust and powerful web vehicle to sell their expertise and products.
Sure, most businesses have a website (and there are a bunch that still don’t!) but the website was usually built as cheaply as possible. Some are just awful and look like they were pasted on construction paper then slapped on the web (I wouldn’t bother then).
Here are a few things I want you to consider, even though it might creep you out to think of operating your business from your website:
1. Can I sell what I’m selling now without having to carry the burden of a retail or office space? The common reaction is, “what? and have no place for my customers to touch and feel the product?”. Yup…that’s exactly right.
Let’s say you own a health food store. Banishing the ‘brick and mortar’ seems like a trick, right? I’m mean, customers are used to coming in and asking you what you recommend for this or that issue that affects them, right? People like the personal service and the expertise you might have in the area of health foods and herbs that are designed to help with an ailment of some kind.
What if you could create that same personalized experience on your website? What if you had the ability for people to ask you the same questions in realtime…both online and the phone? You could ‘chat’ with them and make a few product recommendations. Then they can purchase your goods either right from your easy to use and super secure website or via phone order.
2. Let’s take a shot at a service based business. No products but selling services. Let’s say you are a CPA and have a few partners with some additional specialty accountants on the staff. Most firms of this description would rather jump in front of a moving bus before giving up the office space. What are they spending on space? $3,000…$5,000 a month? Whatever it is, it’s a pretty hefty sum and doesn’t include the utility bills, liability insurance, etc. that tack on additional expense.
Who said you have to carry expensive office space? You do. However, I’ll bet most of your business is conducted by phone and you probably meet them at their place of business for the face-to-face meetings that are needed (and sometimes necessary). But what if you invested instead on the infrastructure that allowed your partners and other expert staff to work from the comfort of their own homes? Shocking, huh? I understand that nervous twitch you just got from the thought but I have to tell you that this kind of transfer of ‘conduct of business’ is already underway.
Listen folks, the technology is already here that allows you to work remotely and securely from any location that has access to high-speed internet.
What I’m suggesting here is that you close down your offices and work from a distributive environment. Need to house files? Sure. You could still maintain some dramatically limited office space if you need to house phyisical files? But what if you optically scanned those docs and made them available on a securely-accessed site, so you peeps could still work? Yes you can.
I’m hard pressed to find too many businesses that couldn’t make this change from ‘brick and mortar’ retail or office space to a web-based, distributive work environment.
Let’s take a quick look at just a few of the key advantage:
1. Dramatically reduced expenses (after an initial investment for upgrading your distributive work environment and your website experience) means you have more capital to work. Freeing up cashflow is critical in any economy, let alone this one we’re in now.
2. Lower operating expenses means you can re-direct those funds to build up cash reserves, lower you cost of goods/services, hire more people, and expand your product/service offerings without worrying about the cost of doing these same expansions with the limitations of the usual retail or office space. Note: unless you can arrange drop shipping directly from the manufacturer or distributor of your products, you will of course need to access some physical storage space for warehousing and distribution of product to customers. Usually that kind of space requirement is far less expensive to maintain than a premium retail space.
3. No geographic limitations anymore. Wow. This is my favorite one of all. The infrastructure investments you make to create a website that is customer-centric, user-friendly and seamlessly allows people to buy from you means you can do business any where in the world. Think of that kind of website married to a distributive work environment takes the shackles off your ‘local’ business. You’re not local anymore.
4. You can now take the infrastructure savings of reduced or eliminated reliance on ‘brick and mortar’ and apply that to a powerful and robust marketing budget to expand both your ‘local’ and web-wide ability to sell products and services.
Take a white sheet paper out and begin thinking through how you could design a way to conduct business without the ‘brick and mortar’. Force yourself to think it through with the attitude of “How can I do this” versus “How many excuses for not doing it can I come up with?”.
In succeeding postings we’ll take a look at some businesses that have been doing just this…and doing it well.
Innovation in the Newspaper Business – 1 February 7, 2009Posted by David Dirks in Increasing Your Profitability, Innovation: Not Just for the Big Dogz, Recession: How to Beat It!, Sales Strategy/Tactics.
Tags: digital product sales, innovation, new revenue development, newspaper business, newspaper marketing, publishing, recession
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For quite some time now, I’ve been watching and musing over the struggle that the newspaper publishing business is going through. Craigslist has usurped the leading role of providing classified advertising that the newspaper once held. They’ve done that by providing free classified ads that actually work. They are geographically specific and apparently people read them…online that is.
Is online the answer? Well, I’m not so sure about that in the sense that newsprint websites haven’t solved the revenue and profitability issues…at least not yet. I was talking to a friend of mine recently who was on the mark when he said: newspapers had a huge window of opportunity to get into the web business years ago but they by and large left it behind. It was a big window of opportunity that has since been taken over by blogs and other free portals to news like CNN, CNBC, and the like with their online websites.
What’s left? Well, I think the win in publishing is this: don’t look for a big hit to bring revenues and profitability home. Everybody seems bent in the industry to find the holy grail that will revitalize the publishing business model. I have news for you: there is no such thing as a ‘big hit’ here. The victory in the newspaper business I believe will come from incremental successes. The victory will be many pieces of the revenue puzzle all coming together to create a healthier publishing model for the newspaper business.
What incremental pieces? Already in play is the newspaper website that is tightly integrated with the print version and produces some level of revenues. The cost to publish online should in fact be quite minimal compared to the infrastructure necessary to print a paper. Selling advertising on both platforms has been well underway for a while now. Not enough to rebuild the business model but important nonetheless.
What else can you sell if you’re in the newspaper business? Try this one on for size: CONTENT. Newspapers produce a ton of content daily, weekly, etc. The current business model is publish today and forget tomorrow.
There is always some excellent journalism that gets forgotten and never reused in any purposeful way as soon as the next edition hits the newstands.
Purposefully repackaging selected content is another way to create increment revenues and profits. You already paid for journalists to create the copy that drives the content. Why not get additional mileage from it?
How? How about creating and selling special hard and softcover editions of specialized topics? What editions? How about “The HS Sports Year in Review 2008”? Or “The Year in Review 2009 for (name your town/city here)”? You could probably find many other specialized areas of interest that could be repackaged and sold in another format. People like to see and hear about themselves, their local sports team, in the newspaper? What kid or parent wouldn’t want to buy the the “The Hudson Valley Sports Review 2008?” as a momento or gift? With print-on-demand technology today, you don’t even need to keep a large inventory of these specialized editions.
I like the local sports repackaging. You have basically 365 days of sports content and surely you can find enough great stories to fill a book.
You could also produce other digital products. Many newspapers today use video to record special events and newsworthy items. That content is repurposed mostly for the newspaper website. But who says you can’t produce a ‘year in review’ dvd? Same concept as the book only this time your adding live footage of sports and news events of the year…couple with some great photography. What a great way to repackage video footage and digital photographs? I’ll bet you could create a great ‘year in review’ just based on photography alone!
Yes, it’s the ‘Time-Life” version of repackaging great content to sell another day!
Repurpose your content. Newspapers are great researching and writing it. Let’s not waste the work of the excellent journalists who toil to create it. Repackage and repurpose everything!
What do you think? Am I crazy? Let me know your thoughts!
Beating a Recession – 9 January 28, 2009Posted by David Dirks in business strategy, Increasing Your Profitability, Recession: How to Beat It!, Solving Business Problems.
Tags: chief revenue officer, creating new products, growing revenues, increasing profits, newspaper business model, raising revenues
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I think I’ve found my dream job. In the last several years, you might have heard this title being flaunted around and wondered what it meant. Chief Revenue Officer. When I first heard this title I’ll admit I thought it was a bit over the top. Over time, with a bit more insight and study, I see this relatively newcomer position in a different light. I think it actually makes sense!
Most organizations are run with functional silos like sales, marketing, customer service, product development, research & development, and on and on. In a smaller business you’ll surely have less silos like these (as you may be wearing all the hats!), but the ‘division of function’ is usually there in one form or another.
The issue can be summed up in one word: inefficiency. No matter how well your organization does, it suffers to one degree or another from the inefficiencies caused by functional roles. The sales people are responsible for driving sales. The marketing people are responsible for driving consumer interest in your products/services. The customer service people take care of things after the sale. Great people within great functions but the difference is that they generally see into the forest but not over the trees. Everyone is focused on making sure they do their part in the most optimized way but not necessarily able to see the big picture.
Even if all these functions run well, you can bet there are plenty of missed opportunities to drive revenues and profits higher. Enter the Chief Revenue Officer whose job it is to find opportunities for increasing revenues by leveraging existing resources that are underutilized today.
Let me give you a great example using the newspaper industry. Traditional newspapers are struggling mightily to figure out how to stay alive, let alone grow revenues. Everyone is trying to bridge the gap between the printed paper and the digital paper and figure out how to make money at it.
With all that focus on trying to figure out what the business model for traditional newsprint media should be, little has become of it. Instead, we see more newspapers and other publishers going out of business or into bankruptcy re-organization. It’s a dire state of affairs not made any bit easier by this current economic downturn.
The print media is exactly where I’d want to be the CRO. Journalists focus on the great work of producing excellent journalism, as they should. Hiring a CRO who is NOT married to the sterotypes of traditional publishing is who you want. Why? Simply because you need someone who can look over and into the entire organization and be able to QUESTION EVERYTHING.
Why? What? When? Where? How?
If I was a CRO of a newspaper publisher, my task would be to question everything. I would look deep for resources that were underutilized across the organization, not just in one department. I would look to connect the dots on processes that are unconnected and less effective at generating revenue.
As a publishing CRO, here are some places I’d start in an effort to improve and grow revenues for a traditional print media publisher:
Follow the People magazine and Harvard examples. People magazine popularized the concept of creating special ‘Year in Review’ issues are to this day one of their best selling issues even though it’s more of a soft cover book than magazine. Did I mention that it’s very profitable too? Their secret sauce? They take the best and most exciting content pieces written during the year and re-package them into a ‘new’ content piece.
Harvard University has a extremely talented group of professors who are required to publish as a part of their teaching role. Harvard Publishing takes those many content articles produced over the years and creates special edition books that focus one speciality area such as innovation or venture management. What did they do? They re-packaged content and distribute it on a wider and broader basis. Very profitable business for them.
What does a newspaper produce every day? Content. Tons of content primarily sold only in one way: through the daily or weekly paper. Then it’s offered for free on their website the same day (with few ads either). The content that most people like to see is local coverage of newsworthy events or top local issues of the day. What are the most read sections of the paper? Primarily the business section and the sports section.
Here’s the game: How about re-packaging local sports highlights during the year and make it available to readers? What parent wouldn’t want a copy of that to see a photo of their son or see their local team in print? What about a special community ‘Year in Review 200X’ that was composed of some of the best local stories of the year? Why not? If you publish 365 days a year, you’re bound to have excellent content that people will have long forgotten except for a nicely bound softcover magazine that capture those fascinating highlights forever? What about a series of business guides based on stories and columns written on a variety of business subjects during the year?
You get the picture.
I like the idea of hiring an unbiased, objective, question-everything Chief Revenue Officer. What an opportunity to really be held accountable for producing new sources of revenue and increasing the profits from revenue streams already in hand!
More on this in an upcoming post. Stay tuned.
Retailing Winners: Deep Discounters and Used Re-Sellers January 23, 2009Posted by David Dirks in Building Foot Traffic, business strategy, Increasing Your Profitability, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics, Sales Tactics.
Tags: beating a recession, business strategy, buzz marketing, differentiation, fighting a recession, increasing profits, increasing revenues, market differentiation, recession strategies, retail sales, revenues, sales, sales strategy, Sales Tactics, small business sales
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We should have seen this one coming. While most of retailing struggles, there are those who are doing just fine, thank you. I noted a recent cnbc.com report that told the story of Family Dollar Stores with quarterly profits jumping 14% in the 4th quarter of 2008. Deep discount stores have for a long time been the butt end of business jokes but no more. If every dog has its day, then this dog is having a good one. Mind you, stores like Family Dollar and 99cent Power have always done well and only just increase their sales and profit tempo by several fold in tough times like this.
Gamestop is another interesting retailing story. They sell both gaming hardware and software but with a twist: they also re-sell used gaming equipment and gaming software. Just think of it. When some people move up to the next system or change systems, they are often stuck with a substantial inventory of gaming hardware and game cartridges. However, they realized that there is a very vibrant and growing secondary market for this stuff. So they buy it outright and re-sell it at good profit. So far, the kids can’t get enough of this stuff and keep buying and selling. Gamestop also offers a discount off of new games if you bring one in for trade. Either way, they make a good profit.
You might be familiar with a franchise called “Play It Again Sports” that buys and then re-sells used sporting good equipment of all kinds. What an idea! Take the stuff that we who have kids seem to accumulate in droves, buy it on cheap (we just want to get rid of it not realize an ROI!), and re-sell it to folks who are smarter than we are (because they can buy sports equipment in excellent condition for a fraction of the cost we paid for it). It’s a great play but especially in times like these where every dollar spent is measured carefully.
What can we learn from these retailers? Here are a few questions I’d be asking myself:
- What part of my business could take advantage of this concept of offering deeply discounted or re-selling high quality, slightly used products? For example, if I owned a retail shop that sold hi-tech equipment (think like a Best Buy but on a smaller scale), I might seriously consider buying slightly used, ‘late-model’, high-quality equipment from folks who are looking to unload it for cash.
I’m not suggesting here that you sell junk. Leave that to the yard sales to move. Instead, you are creating another source of incremental sales revenue and profits by way of offering a less expensive alternative to ‘new’. Don’t worry about selling the new product as there will always be those who will only buy new…however, in these times there are a lot less of them.
- Don’t get hung up on the concept of selling slightly used products. Don’t let your pride get in the way of your ability to DRIVE TRAFFIC TO YOUR STORE. This is about creating another level of differentiation that customers will value.
- Set up a distinct area of your store or website that offers the re-sale product and promote the heck out of it. Nine times out of ten if it doesn’t work, it’s because it wasn’t promoted every way possible. You can build it but if they don’t know about it, they won’t come.
- You have to let folks know you are a buyer of product. You have to market to the people who own the product you want to resell. If you promote to sell product, you also have to do the same to buy it.
- Buy low, sell high. Establish an idea of what the used product goes for on the market given different levels or grades of quality. Ebay is a great place to start. Look there to see what used items in that category are going for.
- Set high quality standards for the used products you buy. The good news is that you don’t have to buy anything that you deem junk. Set standards for quality (and safety) that anyone could use to measure whether a used product is worthy of you buying.
This concept of re-selling slightly used product or deeply discounted new product doesn’t fit every business model. Remember, this is about giving customers and potential customers a reason to come to your store (or retail website).
Beating the Recession Webinar Now Available! January 2, 2009Posted by David Dirks in A New Webinar!, business strategy, Buzz Marketing: Lowest Cost/Highest Payoff, Increasing Your Profitability, Innovation: Not Just for the Big Dogz, Public Relations Strategies, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics, Small Business Advertising.
Tags: business growth, business profitability, business stability, growth, marketing, marketing pr, marketing webinar, promoting your business, promotion, public relations, recession strategies, revenues, sales, sales webinar
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You’ve asked for it and now we’re offering it…
If there was one webinar that you could attend and spend a few bucks on, this is the one. With business conditions as they are, you can either choose to ignore it or do something about it. This 5-hour webinar is designed to help you impact those marketing and sales issues that you can control…and there’s a lot you can control!
We’ve designed this webinar to be jam-packed with actionable marketing and sales strategies that are designed to move your business forward and keep it moving in any economy!!
For registration information, go to:
Note: There is a significant discount for those who sign up before 1/23/09…don’t miss out on that.
Free resources!! October 17, 2008Posted by rickbron in Achieving goals, Bronder On People, business strategy, Changing behavior, Coaching, Increasing Your Profitability, Management, Performance issues.
Tags: doing more with less, effective, efficient, productivity
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Thought that might get your attention! The Big Dogz know how to get additional resources for free. They do it by focusing on the resources they already have. Most people in the workplace are doing the best they can. They are giving you their concentration and commitment to producing at a high level. Sometimes it is the work that gets in the way of the work getting done. Here is how to get more for less in your team.
Convene a meeting with your team members and tell them you want them to answer two questions for you.
- What can we do to be more efficient?
- What can we do to be more effective?
Notice that the question is “What can we do..”, not “What can be done…”. This is an important distinction. The Big Dogz know that if you ask the latter, you will get suggestions on what others could do. The focus is on us, and what is in our control.
Let me define efficient and effective. I borrow the distinction from Tom Peters in his book, In Search of Excellence.
Efficient — doing things right
Effective — doing the right things
So you ask your people to focus on those two questions and then you leave the meeting. Tell them you will return in 45 minutes to review their suggestions. I can hear some of you saying, “Yeah, right, they will have nothing to say!’ Well, you are probably right. The first time you ask them to do this activity; they will usually produce nothing. They provided suggestions in the past. And, they have been ignored! It is no wonder that they will be reluctant to give you ideas.
Thank them for their time and concentration. Schedule another meeting within 30 days to address the same two questions. This will get them to thinking you are serious about being more efficient and effective. Keep having the meetings until they actually come up with a suggestion. Now do your secret management stuff and get that thing done! If you don’t, you can save time by not having these meetings once a month!
The people who know how to be more efficient and more effective are the people who do the work. Too often managers come up with brainstorm ideas of their own on how the department can be more efficient or effective. Most of the time these ideas could work. People like to have their own ideas. They are more likely to implement a suggestion they came up with rather than one you came up with.
The Big Dogz know that patience pays off. Keep asking your people how to do more with less and they will respond. If you have five people and they improve productivity by 20%, you have gotten another full person for free!
So, now in the next 30 days, you schedule a productivity improvement meeting with your folks. Send me an email at email@example.com. I want to know how it works for you.
How to Create More Revenue Streams March 9, 2008Posted by David Dirks in e-Small Business Resources, Increasing Your Profitability, Sales Strategy/Tactics, Solving Business Problems.
Tags: marketing, nonprofit fund raising, revenue streams, sales, small business strategy
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If you’re looking for ways to increase revenues, www.cafepress.com might have the fix you need. The concept is simple: you set up a free online store within cafepress.com, decide what kinds of items you want customized to your designs, and start selling them.
If you have a loyal customer base, they might want to purchase items with your customized designs on them. Shirts, hats, mugs, books, cds, you name it and Cafepress.com can just about make it for you.
In this case, you don’t carry any inventory nor do you pay for any until a customer actually purchases it from your online store provided by carepress.
How do you profit? You make the difference between what Cafepress charges you for the item and what you decide to charge for it. And, with their basic store, you pay nothing. If you decide to upgrade to an online store with more features, then it could cost you as little as $4.95 per month to have your own online store.
Check out their website at www.cafepress.com and check it out. Build a free online store; determine what merchandise you want to carry, and promote it in every communication point you have with your customers. They can’t make it any easier than this.
Non-profits take note: This is an excellent way to create additional development funds when donation money gets tight. You risk no capital and have the chance to get your nonprofit supporters to buy merchandise that provides great benefit to your cause. It’s all good.
Sales metrics that Work -3 January 7, 2008Posted by David Dirks in Increasing Your Profitability, Sales Metrics, Solving Business Problems.
Tags: business metrics, customer sales, profitability, Sales Metrics
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Business metrics are designed to do two things: to help you ask questions and then point you in the direction for the answers. By themselves, business metrics do nothing more than monitor your business performance in a specific area of your business. Like the computerized dashboards found in most cars today, your business metrics can help you to identify both strengths and weaknesses in your business. When your oil indicator light comes on, it just points to a potential problem; it doesn’t do anything to fix the problem.
Whether you have a retail, B2B, or service-based business of any size, business metrics are your friend.
In previous blog posts, (see under “Sales Metrics), we discussed sales metrics related to your square-footage and your employees. Now let’s look at your customer.
What is your average sale per customer? This is a basic sales metric that can tell quite a story if you keep track of it over time. Seasonal fluctuations are easy to pick out when you look at this sales metric on a monthly basis. Over time, average sales per customer can help you determine:
-Is my share of their wallet getting larger or smaller? If your average sale per customer year-over-year goes from $550 to $375, you’re already in deep. Why is your average sale per customer on a slide? What can you do to reverse the trend? If your average sale per customer is going up, then you need to understand exactly why it’s going up. Is it because of specific sales or marketing activities you are undertaking?
You’d be surprised at the number of businesses that have a few successful years and then plummet out of business. Chief reason: they were too lazy to really understand the dynamics of their own success. When those dynamics no longer had any positive affect, they had no clue what to do to stem the losses. They were ‘too busy’ to spend time looking at business metrics.
-What can I do to reduce seasonal fluctuations in average sales per customer? Years ago, one local ski shop in the Hudson Valley decided that the seasonal fluctuation in their ski business could be offset by expanding their business to sell patio furniture in the off season. It turned out to be a great counterattack against their traditional business.
What is your net profit per customer? The best way I think you can look at this metric is on a customer-by-customer basis. If you have good financial controls, you should be able to determine how much profit each customer generates (monthly/quarterly/annually) based on the goods or services they have purchased from you. If you can’t, then you’d better find a good accounting firm before even considering this metric.
-Why are some customers more profitable than others? Is it because of the mix of goods or services they buy? Is your pricing varying from customer to customer? Are the repeat business discounts you’re providing too deep? Is your pricing built on solid financials or some educated guesses? What can you do to encourage customers to purchase better-margined goods or services?
Good business metrics can help you drive your business results by identifying areas of strength and weakness. The key is to understand the ‘who, what, when, where, and how’ of each metric so that you can work towards creating better performance in the areas that count, like overall profitability. The worst thing you can do is to ignore them.