Highlights in this episode:
- Upselling versus downselling
- Is it more profitable to start with the big product?
- Be sure to follow up
- Be fearless and you will profit
- Stay in touch with customers using a newsletter
- Make decisions by knowing your numbers
- Build your own authority with a media page
- Reduce errors with small batch sizes
- See what you can automate in your business
The full transcription of this week’s business news tips…
James Schramko here for this week’s business news update.
Here’s a tip for selling more things.
It’s okay to have small products that you market and then when people come in for the small products quite often that will lead to a bigger product sale. But I also want to point out that the opposite is true; when you sell big products quite often that will lead to small product sales. So let me give you an example of each.
The small product sale maybe that you say have a home ware store and you market candles or soap. People come in and they see that but then you’ve got a nice display with linen and sheets and towels and then mattresses and beds and then bedside furniture etc. so can lead up. The big sale example is perhaps you’re selling automobiles but then when someone buys the automobile they may also want some protective car mats, they might want special number plates, they may want tinted windows. So remember that it doesn’t matter whether you start with the small product or the big product, there are sales that can be generated from that first sale. So I think a big mistake people make is they focused too much on the essential model of small going through to big. Why not start with the big product right now and then sell down to the smaller products. I think you might find that more profitable.
The next step of course is to follow up. Because not only will there be sales today, there’ll be sales in the future and the best way to make the future sale is to stay in touch. To build a relationship and you can do that with direct response mail, you can do it with email, you can do it with SMS, you can do it face-to-face but put in plan a follow up model and you can reactivate sleepy customers when it’s time for them to repurchase even if it’s years down the track. In some products there’ll be a much shorter sales cycle. So figure out your average buying cycle and nurture those customers all the way through the cycle over and over again.
Here’s something around mindset of a business owner.
Quite often we’re scared of things that don’t even exist. We have objections to things that we shouldn’t and sometimes we think that something’s difficult but it’s not. And we probably all relate to a situation where we thought something was going to be really hard and it turned out to be easy. If you want an example of how some people overcome this, just have a look at children and how fearless they are with many new things. They can take on designing of apps, they can read books very quickly, they can pick up a new toy and learn how to operate it.
They don’t have the built in fears so a big part in running a successful business is to turn off these negative thoughts that we have all the time and start just assuming that things are going to be rather easy and just move forward. Sometimes you just go straight through you get the results you’re after and you are holding back for no reason whatsoever. So the technique that I want you to implement this week is question everything and remove assumptions that you might be holding that unless you test are probably not true.
Stay in touch
A great technique for staying in touch with customers is a newsletter. A newsletter where there is a video or sent out via the mail is a great way to give valuable tips and insights to your target audience and also a way for them to find out about other things that you have available for them or other problems that you may solve. I think it takes a little bit of discipline to get to a regular routine but once you do it it’s actually very easy. It’s like an athlete when they do training. If they don’t do it, they miss it and for that reason get into the habit of weekly communication, monthly communication if you find it difficult or daily communication if you’ve got that type of audience just get in front of your best customers and speak to them often.
There is a relationship between frequency and repeat purchases. The more you are omnipresent the more you are on the mind of the buyer and then the more likely it is that they’ll come to you when they’re ready to find something that you actually have.
So how do you make decisions in businesses?
Well I encourage my customers and I certainly in my own business my managers, we know our numbers. And by numbers I mean there’s a number for each part of the business that helps you determine what to do. For example if you’re a consultant, your number may be the hourly rate that you need to charge to make it worth your while to take a customer. For high level consultants probably a thousand dollars an hour. For a low level consultant it could be $30 an hour but that’s the number. If someone offers less or if you have the opportunity that presents that’s way outside of the number. It’s a way for you to make that decision rather easily.
If you have other things, if you sell time, then your number might be hours to deliver a project. You may know that you should only take on a project if you can deliver it within X hours. Perhaps you’re selling a fixed amount product but it takes X amount of hours to deliver. So then the determining factor is should we take the product on based on how many hours it will take to deliver? If it’s going to take more than say 20 hours to deliver then the dollars per hour doesn’t work out anymore so that number dictates that you shouldn’t take the project.
Build Authority Faster
With the internet being strong, a lot of people are going to the internet and research their potential business partners and for that reason it’s a good idea to have a media page where you can put links to where you’ve appeared in the media, interviews that you may have done, magazine articles, and make it easy for people to find out more about where you’ve appeared so they can go and have a look and form their own decisions without you having to do a lot of selling.
The more that you put yourself out there and the more that you become an authority in your expertise and the more published documents you have. That is the gold standard for people trusting you and wanting to do business with you. Of course things such as a book or published courses or any type of certification should go on that page.
Here’s a tip for cutting down the error rate in your business and we can take this from the manufacturing industry.
Work with very small batch sizes. So if you’re going to give an employee a task, then ask them to do the first part of the task and then bring it back for checking. And you can spot for errors before it goes to the next stage and the next stage. And also just do one thing at a time.
When I make these videos, I make 1 video and then I edit that video before I make the second video. You may think that it’s faster for me to make 2 or 3 videos at once and then edit them but what if I focused on the background instead of on me then I would have 3 ruined videos that I would have to reshoot instead of just one. Believe me it’s happened more than a couple of times. So small batch sizes, do one task at a time and check frequently especially when tasking a new person in your business to take on a task. Check on it often and you can catch mistakes while they’re still small before they turn into a big expensive costly rework situation.
Big tip this week is automation.
I want you to think about something in your business that you’re doing manually that could be done by software or by somebody else and see if you can get rid of it off your agenda. A great example for businesses is when they’re sending out manual invoices when there are so many programs around that can automatically send an invoice and by automatically, I mean not just by email but can actually print off put in an envelope, stamp and mail to a customer. I use Freshbooks for that but that is just one example of automation.
There’re many other things you can automate in your business so get on to it today. Find one thing that you can automate and perhaps make a comment below. Tell me what you’re able to automate today!
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