Marketing is about connection.
My favorite marketing tip that builds rapport, trust and opens doors of communication like no other is Tell The Story. One of the most effect ways to connect is to share how you got to this place in your life professionally. The Story helps others empathize, see your point of view, and share in your journey. My story starts with an incredible learning experience working for a fantastic small business in Liberty County (Thank You VIP!), followed by a decade of building a business from the ground up with my business partner. I was introduced to coaching as a client and it changed my life! I was so excited at learning the keys to being a successful owner that I wanted to help others have that same sense of accomplishment, stress relief and increased cash flow (the big one!) That led me to learn about getting certified and trained as a business coach, taking lots of courses both online and live, and even opened the door to help write the curriculum for a college-level degree program. Today I can say I love what I GET to do – it’s a privilege to help exceptional professionals become extraordinary business leaders. I get pure joy when I receive a call from a client who is experiencing those same life-changing moments I did years ago with my coach. What’s YOUR story? Share them with me for a chance to be highlighted in this blog: [email protected]
Your front counter sales person makes a difference…
Perhaps I am OCD about customer service. I spent 10 years working for a fabulous retail company that valued it above all else. I spent 11 years as the owner of a service-based company that recognized how important customer perspective is and that you need to sell an experience and not just a job. And as a business coach I encourage, extol and even require clients to provide an exceptional level of it to their prospects and clients.
Anyway…. I am going on a cruise and I wanted to get a spray tan before I go in order to not scare the little children with my amazingly bright white skin. So I ran into a tanning salon in a large shopping center near my home to make an appointment. It appeared there was only one person working the front counter (perhaps the entire store since I did not see or hear anyone else the entire time I was there). When I first walked in, the front counter person asked me what I was there for and I let her know I wanted to make an appointment for a spray tan. She smiled and said she’d be right with me. I waited patiently for her to sign in, bill, and instruct the person in front of me on how to use the tanning beds. It took at least 10 minutes to check in and help the person using the tanning bed… Then there was another person there to use a tanning bed who was obviously a regular based on the conversation and quickness of signing her in and simply directing her to which room was hers. After 15 minutes it was my turn! Great!
“We don’t make appointments for spray tans; we do it on a walk in basis only.”
Ummm…. was there a reason she didn’t say that 15 minutes ago when she asked why I was there? And since she appeared to be the only person working, I asked,
“Are there specific hours someone is here to do that?” I didn’t really get an answer, just a repeat that they take walk-ins only and that Thursday early evenings were the busiest time.
As a business coach I see the following in this scenario:
The business was understaffed.
They either could not or did not want to meet my desire for an appointment.
The staff was poorly trained in customer service.
The front counter person was not taught how to deal with this question in a positive manner. She was not trained to sell me on the value and benefits of their service that might outweigh my desire for an appointment (in fact, she didn’t tell me anything about their service). I felt dismissed and unimportant; I felt like she was more concerned with the person who came in after me than meeting my needs. If she took the same time that she did with the previous clients to discuss why I was there and what I wanted to achieve, chances are I would have been satisfied and happy to return as a walk-in. But I’m not.
The front counter sales person lost the sale.
And I tend to be a loyal, long-term customer, so this business didn’t lose a one-time sale; they lost multiple sales over years. So – someone else will be doing my spray tan. The salon across the street from this one. They take appointments and took the time to make sure I had all the information I needed for a successful spray tan experience. I’m paying more, but I don’t care. If their in-house service is as good as their phone service, I will be happy to pay it.
is the percentage of each sale that you get to keep after you have paid the necessary expenses to provide your goods or services. You have 2 profit margins: Your gross profit margin is the % you have left after cost of goods and/or cost of labor are paid (such as the labor for your technician). Net profit margin is the % that is left after you’ve also paid all of your operating costs (such as the rent, electric bill, administrative employees, etc.) In simplest terms, if a business sells something for $100, and gross profit was $25, the gross profit margin is 25%.
With our goal being to improve your profit margin by a moderate amount, say 10%, some changes need to be made to do that. Here are some ideas to consider:
- Increase your prices
- Advertise/sell more goods or services that already have higher profit margins built in
- Keep an accurate database – inaccuracies waste time and advertising money
- Add a commission-only sales person/team
- Provide sales training and encourage sales of higher margin goods/services
- Reduce/get rid of overtime for production employees – switch to shifts if necessary
- Reduce team size – unless you are maxing out the service hours for every service (production) employee, consider reducing your production staff.
- Reduce unnecessary management – give your best people the power to make decisions instead
- Outsource/hire temporary help for seasonal rushes
- Improve efficiency, productivity and time management – rearrange your layout to reduce how much traveling employees need to make to get work done and properly schedule their days to accomplish more.
- Create team incentives based on margins
- Reduce duplication – of both effort and materials
- Know your actual costs – review your KPIs regularly. Calculate your labor expenses to include not just hourly wages but FICA/MED, unemployment tax, workers’s compensation, and benefits. Make decisions based on these facts
- Set monthly expenditure budgets and stick to them
- Require authorized purchase order numbers for accountability
- Negotiate better pricing from suppliers
- Review all monthly bills (telephone, internet, trash pickup, electricity, rent, insurances, IT services, etc.) and negotiate with service providers for better rates/find new providers
- Review insurance policies to see what you do/do not need
- Put lights and HVAC systems on timers
- Recycle as much as possible
- Decrease travel range – travel expenses eat away at margin
- Stock on consignment – many vendors offer this option
- Reduce in-stock inventory and find right-on-time delivery vendors
- Only stock fast moving stock
- Buy direct and/or in bulk stock that sells quickly
- Work from a home office – if your services are on-site only or you sell goods primarily through the internet this is a great way to reduce overhead expenses significantly
- Join/start a buying group to reduce costs of goods
- Re-finance business loans at a lower rate/lower payment
- Change A/R account payment terms (example: 30 day terms to 7 days)
- Invest in technology – if you are wasting work hours dealing with slow/old computers, lost emails, bad connections, crashing servers, etc., it is time to upgrade to increase both efficiency and productivity
- Systematize the routines, humanize the exceptions
- Automate as much as possible
- Sell obsolete equipment/machinery
- Only buy what you NEED and BE TOUGH on the definition of NEED!
- Use a company credit card for bonus points and up to 55 days interest free
- Change accountants – you might be surprised how much a great CPA can save you
- Stop running ads that don’t work – measure ROI on everything by asking prospects and clients where they heard about you
- Collections – don’t carry a huge A/R balance.
In my opinion, the best options reduce expenses. However, as we’ve discussed in prior articles, if you are the “cheapest guy in town,” a price increase is probably a good idea to improve your margins.
Enjoyed this series? Let me know! [email protected]
How many times does your customer buy from you?
Maybe you are a realtor and most clients will only buy/sell with you once in 10 years, or you own a service business where you only see customers twice a year. You are thinking it’s not possible to increase the number of transactions they’ll complete with you. I want you to assume I am right when I say yes you can. Your perspective may need to change. A home buyer may become a real estate investor, or decide they want to be a realtor and take a class with you. If they have a great experience with you, they are going to refer others to you (an additional “transaction” as a result). They are eventually going to want to buy or sell again and you want them to choose YOU.
Let’s use an HVAC company as an example of a service provider. Are you cleaning ductwork when you go out twice a year? Have you mentioned it as a service? Did your technician complete a questionnaire with the homeowner to make sure all rooms are heating/cooling properly? Did you mention you clean dryer venting and how often that should be done to avoid a potential fire hazard? Give them reasons to want to do business with you more frequently.
It may be difficult to figure out based on previous year’s records what your average number of transactions were per customer. Do your best and then make a goal of a 10% increase. Here are some ideas on how to do it:
- Be consistent and reliable – I will refer the company that put in my new wood floors over and over and use them in the future because they showed up on time, every time and had the work done when they promised. However, my experience with carpet companies was 2 no-shows and 3 no-contact after the initial phonecall. This, unfortunately, is far too common with contractor services. Be the one who can be depended on and that alone will get you more sales.
- Provide exceptional service – make your customers feel special, give them magic moments to tell others about. You’ve heard the saying, “under promise and over deliver”? It works.
- Streamline your services – Make it easy to come back again and again. I don’t want to fill out the same form every time or start from scratch when I need to place an order.
- Keep in regular contact – this is where social media and email marketing can make a tremendous difference. Use these channels to remind people that you exist, educate them on what you do/sell, keep them informed of new offerings or sales, and make them feel good about doing business with you by sharing positive, uplifting, and personal news from your team. A monthly or weekly newsletter is a great option too.
- Continually update customers’ contact information; reach out to previous customers you haven’t seen in a while.
- Build a relationship – Know your customers’ names; tell them your full name; socialize; become a friend; send special occasion cards/gifts
- Inform customers of entire range of products and services – Educate, educate, educate! See the note above about staying in regular contact too.
- Hold special events – Customer appreciation event; Education/Information night; Closed door/Members only sales; Open House after hours; Tastings; Cooperative events with local civic/school groups
- Introduce upgrades regularly – Offering new services and the latest and greatest products makes a difference to clients; they like feeling on the cutting edge or knowing about something new first.
- Keep inventory stocked – don’t lose a sale because you don’t have something on hand that you normally do.
- Book the next visit now/ Plan future purchases with clients – Don’t forget to send out a reminder card/email as well.
- Time For Service reminders – if they didn’t book the next appointment, be sure to send a reminder when the next one is due. I don’t know why more salons don’t do this; I’d probably get my hair cut and colored more often if I had a reminder that it has been 6-8 weeks since my last visit.
- Keep following up – read the book Three Feet From Gold. Hand-write a note to customers you’ve “lost” and want back.
- Give promotional gifts or gifts for big $ sales – I worked with an auto repair shop that sent a card and a box of brownies to any customer that had a repair bill over $750. Those brownies got more returning customers and new referrals than any other marketing efforts.
- Labels and stickers on products sold/installed – A simple reminder of who they did business with can become a future service call.
Enjoying this series? Let me know at [email protected]