9 Steps to Make Your Business More Profitable in 2010

As Britain is coming out of a recession, companies are competing to gain the edge on competitors and make their organisation more profitable; it is vital that organisations realign themselves to gain that competitive edge and ensure they are even more successful in the coming year.

Every organisation is different, but change is a good thing for any business to incorporate from time to time. To make your business more profitable in 2010, consider using some of the following tips to implement change and increase sales.

1 Re-position Products and Services

One key way to increase profit is to re-position your products/services for a more lucrative sector of your market. It is important to consider who your current product or service is aimed at and if this is the most lucrative customer to be focusing on.

Next, research other customer groups within your market who are less concerned about price and more interested in quality and service – what are these customer groups’ key frustrations with their current suppliers and what do they really need that they are not getting? Consider these points when you re-position your products and services.

2 Introduce Team Sales Incentives

Sales departments are one of the most important in an organisation. Team sales incentives can turn your business into a sales organisation with everyone’s focus in the right place. Try piloting a sales incentive scheme where employees can receive a bonus for sales. Ideally, you should keep this simple and remember that most people prefer cash. When calculating bonus amounts, ensure that you have covered cost of sales and expected overheads.

3 Train all Staff to Up-sell and Cross-sell

A small investment in training can yield a significant return in income. Many people have not received sales training and often sell in an ad-hoc way. By investing in sales training, you will achieve a consistent skilled approach which your team can continue to refine.

It is worth including up-selling (selling a more expensive item) and cross selling (selling additional items) into the training, however, before you do this, consider the product or service you are offering. Do you have a range of products/services to meet different budgets and do you stock additional items that could be sold with your existing products and services? It can also be beneficial if your sales staff have access to profit margins to encourage higher margin sales.

4 Introduce Follow on Selling

It is important to develop a range of products and services that follow your existing offering. This continues to add extra value to your clients and will maximise the income you can generate from each client. This is vital after investing money into marketing to gain clients and investing effort into meeting their needs. Don’t waste the trust and relationship you have built up.

Consider what clients need after they finish with your product or service. It is key that you consistently ask all clients this as part of your sales process.

5 Tier Your Customers

Classifying your customers into tiers depending on needs and budget can allow you to develop different products or services levels to meet each tier. This allows you to generate additional revenue from your client base without losing existing business. It also creates more value, for those that can afford it, which will help keep customers loyal for longer.

6 Attract New Customers

Create a free or low priced entry-level product or service to allow people to sample your products or services for minimal risk. This is a very effective way to get new prospects into your buying stream. Even if you only break even on these front end products, they allow you to make significant returns on the higher value backend offerings.

Now is a great time to be executing this strategy because many people are unsatisfied with current suppliers due to quality cuts made by your competition in response to the recession.

7 Make it Easier to Buy From You

Many businesses make it difficult to buy from them due to poor handling of leads and no follow up process.

Consider how easy it is to buy from your business. Take into account your sales process, how leads are handled, who follows them up and how long it takes to respond to prospective clients. Trust is a vital part of business, so make sure your sales department is doing what they say they will for the customer.

It is extremely worthwhile looking at the percentage of leads that are converted into sales, and what happens to the rest of the leads. If there are a high number of unconverted leads, pick a selection and follow them up personally to find out why they didn’t buy from your organisation.

8 Gain Customer Referrals

Customer referrals are the best type of new business leads because, not only are they free but higher percentages usually go on to buy. Most customers are happy to give referrals but businesses are often shy to ask. The key is timing.

Ensure you have a process to get referrals from customers, and make sure that this is done regularly and that it is done at the point in your sales process where your customer is on an emotional high. Consider how you will request the referral from your customer.

Always analyse what percentage of customers give you referrals and how to measure and improve this figure on an ongoing basis to continuously improve the leads you receive.

9 Gain Customer Feedback

Customer feedback is like gold dust. It tells you why the client buys and what they want and need, which allows you to continually evolve your offering and build your competitive edge. Systemise the recording of feedback at different points during the sales process; ensuring feedback is gained against the customers expectations. Dig to find where the real value is for the customer.

You may find that some expensive parts of the offering may not be of value to customers. Having access to this information will allow you to reduce expenses and increase focus in areas that do create perceived value.

If customers have used a competitor in the past, find out how you compare to them. It is also worthwhile to gain feedback on why they came to you in the first place and how you stood out from the crowd. Feedback should be quantitative, so you can measure whether you are getting better and qualitative to provide the detail for your understanding.

Make an effort to ring one client a week personally for an informal chat. When you receive good feedback, this is a great time to sell additional offerings and ask for referrals. It is also a great time to find out clients current and future needs.

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