Maximize Results

The Power Of A Mature Business

As many businesses mature, they require less and less advertising because of the referral activity of the accumulated customer base as well as general word-of-mouth advertising. The typical professional practice, for example, will get 90% of its new patients from advertising in Year One, but should (need to) get less than 10% from those same sources in Year Ten.

A great entrepreneurial trick is to accelerate the maturation process.

This means that your business must become famous and respected within its market as quickly as possible.

Another way to think of this; my example; I'm a marketing guy who doesn't market. I do virtually nothing overt or direct to attract new clients, as a speaker or consultant. I have more new client flow than I can handle as a result of being known, being seen, being talked about, as well as direct referrals. This should be the goal of any good marketer; to arrive at a position where all the marketing can be redirected at the "back end" of the business.
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The Power Of “Easy Payments”

If there is one factor that has ever-increasing impact in the sale of everything, it is financing. These days, if you can't or won't offer financing, you're dead. And a way to gain competitive advantage in businesses where "easy pay" is not yet prevalent is to offer it.

One expert in dentistry has shown me proof of increased sales of elective, cosmetic procedures by as much as 30% in offices actively promoting easy payment options.

I think if I were a carpet cleaner, I'd offer to charge the job amount in 2 or 3 installments to the customer's credit card.
Lillian Vernon, Figis and other cataloguers offer their customers "No Payments Til February" on Christmas shopping orders.

Everywhere you look, financing is a major marketing strategy.
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The Power Of A ‘Slack Adjuster’

A 'slack adjuster' is a high margin, high profit item sold to a small percentage of your customers, that makes a disproportionate contribution to your bottom line.
In the information products business, it's often the high-fee BootCamp. In the appliance business, it's the extended warranty "paper".
What is it in your business?
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Price To Meet Marketplace Changes

Some years ago, I did some work for the founder and former CEO of Steak-N-Ale restaurants. He jumped on the recession, with "early bird dinner discounts" and low-priced, complete steak dinners (by cutting the size of the steaks). More recently, Taco Bell and Wendys added "value-priced" menu items.

•Times to consider reactive price changes:

•Inflation

•Recession

•Competitors' actions

•Cost increases

•Cost savings

•Seasonal fluctuations

•Demand-supply in your favor

•Supply-demand against you
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Two-Tiered Pricing Almost Always Increases Profits

This is one of my "big" consulting tricks: let's assume you sell a "fruit-of-the-month" program at $19.95 a month. I'd keep that, but also create a "deluxe monthly basket" program with the fruit plus cheese plus wine, at $49.95. If I sell the same number of subscriptions, but some percentage opt for the "deluxe", I increase sales and profits without increasing the number of customers.

This strategy has worked for a number of my clients with newsletters or other continuity programs. And if you have a number of subscribers to be renewed on one plan, building the renewal offer around renewing as-is or opting for a "bigger" program always boosts profits; typically 30% of those renewing will move up.

Even the hotel industry has figured this out with designated "Club Floors" or business-equipped rooms at higher rates.
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Raising Prices Can Instantly Increase Profits

Most professionals wait too long to raise fees; most marketers fail to test the limits of their products' price elasticity. Yet any price increase, even a dollar, that does not decrease volume obviously improves profitability. Sometimes a price increase that DOES decrease volume still yields higher profits.
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Price Need Have No Relationship To Cost

There are "mark-up formulas" that we often talk about and use in business. For example, for direct-response marketing, we look for a 8X to 10X mark-up. In traditional distribution through retail, there tends to be a 20% to 1X (100%) mark-up from mfg cost to wholesale, and a 1X mark-up from wholesale to retail. But the most important thing to keep in mind is that these are MINIMUM mark-ups. The entrepreneur's job is to get the maximum possible mark-up for himself as well as for his re-sellers. So "what the market will bear" is the ultimate determinate of price.

Some products are much more "price elastic" than others, based on a myriad of factors, including relative uniqueness, scarcity, perceived value, market responsiveness, and so forth. Testing and pushing that elasticity is important.

Sometimes guilt limits price. With "information products", for example, somebody'll say: how can you charge $100 for a book that only costs you $1.00 to make? But with such products, there's no relationship whatsoever between manufactured cost and price, because the value to the end user is not based on the thing but on the information contained in the thing.

Methods of marketing and distribution have a great affect on price. Information in book form, sold through bookstores, may be saleable at $10 to $30, yet that very same information packaged differently for sale through directmail may support a price of $100 to $300. If that same information is delivered through a seminar: $1,000.00 to $3,000.00.
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To view all of the profit producing and wealth creation resources go to
www.glazerkennedywebstore.com