Week 27 - Working the Hidden Gold Mine

For the next few weeks I am going to focus on building new income streams to support your business. How many products or services do you currently sell or rather, how many products or services are you currently relying on for an income? The best way to check this is to ask “would I still be in business if people stopped buying my main product?” The danger is obvious, market trends, product obsolescence, price competition, even the potential failure of your own health make this a very risky and “reactive” way to run your business.

By establishing new lines of business you can create a safety net for your business via increased sales and profits. If these new income streams are good you may actually find yourself having to work less. This is not unrealistic. Many of the new income streams may require little or no extra effort, they simply leverage off your existing products or services.

Now you could be thinking for example, “I own a concrete truck, there is NO risk as people will always need concrete!” Well, in the words of the late John F. Kennedy, “The time to repair the roof is when the sun is shining”. Today it might not seem that you need to offer new products or services, but change is inevitable and you need to protect your business. The relationships and income streams you put into place during the good times will be critical to you when your business is tested by stress.

One of the easiest ways to increase your turnover and your profits is to offer your existing clients other services or products which are complementary to your own. Many business owners already have these relationships set-up in some way, but as I keep saying, it is not a systematic approach. Essentially the relationships are set-up in an ad hoc fashion. To really take advantage of these relationships and build strong new income streams for your business, you must begin to proactively plan and nurture these third party relationships. So where do you start?

As the business owner you have the opportunity to:

• Sell or recommend other third party products or services to your customers
• Market your relationship with your customers to trusted third parties
• Remain in constant contact, resulting in sale after sale
  

Who has your customers before and after you do?

Before or after a customer buys your product or service, what else are they buying? For example, when a travel site sells a flight, the buyer might also be booking a hotel room, hire car and travel insurance. That might seem like an obvious example, so how about a cosmetic surgeon? Prior to their visit they might be members of a gym or skin clinic, or any other organization that aims to help people improve the way they look and feel. You see there are always products and services that go before or after what you sell or provide. Some other examples:

Office Computer Supplier

Before: Network cabling, associated network products, computer workstations
After: Software training or an on-going system maintenance service

Mortgage Lending Company

Before: Life or income protection insurance, real estate agents who have prospects without finance
After: Furniture removalists, solicitors, real estate agents for when a loan is approved

Refrigeration Company

Before: Architects, builders, shop fitting companies, food wholesalers
After: Shelving companies, food storage providers, maintenance contractors.

Menswear

Before: Gyms, fitness instructors, stylists, barbers, men’s magazines and web sites,
After: Barbers, shoe stores, personal products such as aftershave and skin care.

Sporting Goods Store

Before: Sporting teams, school sports programs, health food stores, associations such as Life Saving.
After: Sports clubs and bars, physiotherapists and massage therapists.


Next week we will look at striking deals with these companies and building the pillars to support your business long term.

Random Quote - Service

There are no such things as service industries. There are only industries whose service components are greater or less than those of other industries. Everybody is in service.

Theodore Levitt, Production Line Approach to Service, HBR

Week 26 – Chance: Unknown and Unpredictable Phenomenon - Let’s Avoid That!

Since “Week 8” back in October of last year I have been talking about marketing ideas, their foundations and how they all tie together to create compelling results. Before we move on, let’s wrap up.

If you only take only thing away from all this reading, take this:

The best marketing programs will fail to perform if you do not have an overall strategy and systems to support that.

The good news….once we have looked at creating new income streams I will go straight into how to create these systems which will help you to deliver on your strategy.

Look back through the previous 10 weeks and ensure you have considered your position on each of the suggestions. As a shortcut, here are the key messages:

• Help your customers to find what they didn’t know they wanted. Help your customers to get everything they need to do the job.
• Sales tools are not part of some elaborate con. They are supposed to help educate the customer. You must believe this yourself or your customers will not believe you.
• Use questions to up sell like crazy! This is why you are in business, so don’t be ashamed of this. Remember however that the approach must assist the customer to get the result they want, not just help you sell what you want.
• Always follow-up on customers who have recently purchased from you. Don’t stop there, build on the relationship and you will reap the rewards in future sales and word of mouth.
• One time follow-up produces one time results. Systematically follow up, and never give up.
• No matter what you sell, your customer is taking a risk at the point they decide to purchase. You can increase your conversion rate today, just by introducing risk reversal. You may not be refunding on a purchase, but every business in the world can do something to remove some/all of the risk from a transaction.

Week 25 - Remove the Risk and for Goodness Sake, Follow-Up!

Buying from your business is a risk! Most people in business understand that a guarantee is something that takes the risk out of any transaction. One of the barriers to a prospective customer making a decision is that without this guarantee, they are taking all of the risk. In other words, you tell them it is a great product or solution and ask for their money but the risk is all theirs. If your promises do not eventuate, they are the losers. The hesitation caused by this risk should not be underestimated.

When you last purchased a product that you had not bought before, did you feel a sense of vulnerability? Will it work? Is this brand reliable? The final decision you made involved a risk on your part. If you put prospects at ease through information and risk reversal, you will see your sales increase.

The key message is to reach out to your customers, understand the feelings that they have surrounding the purchase of your product or service and develop ways to make them feel comfortable. It might not jump out at you, but don’t simply dismiss the idea… “We cannot accept the stock back so how can we reverse the risk?” When you put one of these systems into place it really forces you to think about your product or service and how it is delivered. It puts your whole organization on notice that there will be pain if you do not deliver… not such a bad thing huh?

One of the craziest things in the world of business is that people fail to follow up. Once a customer has purchased a product or service they rarely hear from the company again. But follow up is much more than simply calling or writing to your old customers. Following up should become a religion within your business as it can be a perfect way to increase your conversion rate or tap a huge source of new business. Customers often need to be helped across the line and you can help them by making it easy for them to buy.

• First and foremost, follow-up customers who have recently purchased. Make this part of your system, that is, make it a rule that every customer is called two days after the purchase. Not only can you check on their level of satisfaction, you are opening a new dialogue that could potentially yield yet another related sale.

• Follow up your introductory letters regarding your business – tell your prospect you were calling to check that the letter was received.

• Follow up your quotes – keep following them up until you have a decision (even if the decision is a “no”, the lead may still be valuable, more on that later.) When following up your quotations, reiterate your USP, tell the prospect how to act and perhaps give them a one time offer for an immediate response. For example, “…we know you wanted the top of the line pool cleaner, we can actually throw that in for nothing if you sign the paperwork Wednesday.”

• Follow up prospects who have failed to return your calls – don’t consider your job done once you have left them a message. Your job is not done until you have spoken to them.

Once again: one time follow up will produce one time results. Remember, your competitors are always knocking on your customer’s doors so you need to build a wall in their minds to block out any other advances. The wall will only go up when they are hooked on the way that you treat them. Always see follow up as the ‘long term bonding process’. Is anyone in your business making follow-up calls?