A Mystery Shopper Has Visited Your Business !
|
|
The quickest way for any business to make 10% more profit each year is to put up its prices by 10%, but if it is as simple as that, then why aren’t we all doing it? The reason is that we have a fear that in doing so, we are going to lose our customers.
However, like most fears, when you analise them they are only “false expectations appearing real.” The reality is that in any market you can and should increase your prices, and if you know how to do it properly, you need never be fearful of losing a single customer.
The first thing to understand is that you must know your numbers. If you do not understand your own profit and loss account, know your gross profit from your net profit and what products make money and which do not, then you are right to be fearful. Without this knowledge, you will not know where to start and may well find you are increasing prices in the wrong area of your business and wake up the next morning with no customers at all. So if you are not tracking these important figures and do not have detailed analysis of what you sell and how much it costs you, then stop reading right now, book a meeting with your accountant and do not read any further until you have got the information at your fingertips.
OK, so now I will assume that you are financially literate. Your next step is to understand that if a company making a 30% gross profit were to increase its prices by 10%, it would have to lose 25% of its customers to be financially worse off. Yes, that is right; if 20% of your customers objected to the price rise of 10p in every €1 and went elsewhere, then you would still be better off putting your prices up. Also if you raise your prices by a higher figure, say by 30%, you could afford to lose 50% of your clients. Think of the time and effort you would save!
If you don’t believe me, work it out for yourself, then read on! If you can’t work it out, then go back to your accountant! Obviously if you have higher or lower margins the figures will be slightly different, but the concept will be the same.
I have been working on this one strategy with clients for 7 years and in all that time, the average loss of customers from a price rise is 1-2%. But this could be a hidden bonus for you in this as well. The clients that do leave as a result of a price increase are usually the ones that have always quibbled about price, don’t pay on time, cause you stress and grief and use up time that should be spent with your top clients. By losing your worst clients, you can spend more time on your best clients who will in turn buy more from you and stay longer. And there is a further bonus in that these bad clients that leave you go to your competitors and make their life hell instead! So you really can’t lose.
OK, you still may not be convinced by my argument and think that there must be a catch. Well, for some of you, no, there is no catch. If you only have a few products or services, you really believe in them, you give good value and have a good relationship with your clients; you can put up your prices tomorrow. I helped one service provider client do this and we doubled the profitability of his business virtually overnight.
For those of you with multiple products and services which are more commodity-based, where your clients have little loyalty and there is high price sensitivity and competition, then a more strategic approach than a general price rise is needed. For you, rather than increasing all prices, you need to work out which products and services you should increase and which you should leave alone. As I said above, you have to know your numbers, but this time down to a product line margin basis. Then you need to look for those products that are going to meet one or more of the following criteria:High volume, so that a small increase can have a big effect (e.g. 1p on a litre of petrol)
High ticket price – so that a reasonable € increase is a low % increase (e.g. €5,000 on a new Ferrari)
Highly differentiated – where you can show a real point of difference that will justify a higher price (e.g. Apple’s iPhone)
Low access to knowledge – where access to competitors’ price and offering is harder to find or is confusing (e.g. energy tariffs)
Able to reposition – turn your product/service into a basic/better/best, so the basic competes on price and the others on value (e.g. Tesco’s value and finest range)
Add-ons – have a basic range and charge for extras (e.g. BMW & Mercedes).This list is not exhaustive, but I find with my clients I rarely need to go beyond the basics to make a difference, and what a difference – for every €1 on the price, 100% of it goes straight to your bottom line!
So go on, take ACTION and put up those prices- just warn me first so I can get my order in before you do!
You’re on Facebook–congratulations. But many businesses make the fatal mistake of thinking social media begins and ends with Facebook, and never really bother to look beyond those borders. Chances are, if your followers are active Facebook users, then they are also avid users of other forms of social media, including but not limited to: Instagram, Twitter, Pinterest, LinkedIn, Tumblr, etc.Facebook gets the most traffic, at close to one billion users a month, but you can’t turn your nose up at Twitter either–it gets over 300,000,000 (300 million!) unique monthly visitors.If you’ve put all that effort into crafting fantastic content for your Facebook page, doesn’t it make sense to make sure it gets seen across the widest spectrum of social media possible?Here are some practical tips on how to maximize post spread (and increase the number of “eyes” on your Facebook post content):
People often get stuck on the number of Facebook “likes” as an indicator of success–but beware of this. Liking a Facebook page is a shallow indicator because it requires no real engagement on the part of the follower other than simply pressing the Like button. “Shares,” on the other hand, are a real indicator of how good and engaging your content is, because the act of sharing a post takes more effort and is therefore a good sign that your followers will go the extra mile for you.Social media expert Brian Carter, says, “When we click share, we’re obviously saying ‘I like this so much, I wish I had created it myself. I want everyone I’ve connected with on Facebook to see it. I’m ok with my family, coworkers, supervisors, bosses–and anybody else I’ve friended, knowing that I like it.”Creating shareable content is often a shot in the dark because it is not easy to predict what people will find interesting, emotive, engaging, or fun on any given day. Think of the average Facebook user as a fish in a massive shoal of fish–weaving and changing course in a seemingly random pattern. What is known, however, is that the more shares a post has, the bigger the chance that the entire shoal of fish moves towards it.So, how do you create shareable content, if it’s such a shaky science? Although nothing is guaranteed, here are some practical tips.First of all, look at the research on what kinds of posts get shared on Facebook. Dan Zarella, a HubSpot marketing specialist, conducted research into 20,000 posts shared on Facebook, and found out that the most shared posts are those that:
For example, look at this inspirational quote:A Facebook post that shared this simple jpeg image got over 23,000 likes and over 10,000 shares–now those are stats to turn any business green with envy.In short, make people feel good, or share something so universal that it strikes a chord, and you have your opening hook to drag thousands of potential followers back to your Facebook page.Let’s not forget what Brian Carter says about the act of sharing a post, in that it indicates that the user is proud to share your content with his/her entire circle of friends, family, bosses, etc., and that the content is saying something important about the values or beliefs or the interests of the person sharing it. In this vein, stories or posts that are engaging, newsworthy, and reflective of positive values do well on Facebook. The trick is in finding that balance.
Research done by The New York Times, called “The Psychology of Sharing,” found that 73 percent of people share Facebook posts in order to process and absorb the information in more depth, 49 percent share in order to influence and inform others, and 94 percent share a post in order to help.This suggests that learning and self-education is a huge factor in why we share Facebook posts or pages–we like to learn, and we like to help others to learn. Businesses can draw in many B2B Facebook followers by creating and sharing informational content that will help the industry in some way, or prove useful to its participants.You can become an industry resource by following some basic tips:
Take a look at the Prius fan page as a good example of how a company can be a learning resource for its customers:If you look closely at the question section, the ever-helpful Prius rep has answered a question from a Malaysia citizen in a thoughtful manner, even though the page was originally set up as a learning resource for the company’s North American customers. Responses like that garner loyalty.
One of the most effective ways to get Facebook likes and shares is to offer a competition or coupon offer that is available only to those followers who like/subscribe to your page, or perhaps share an important post (perhaps the competition announcement post itself). Everyone likes competitions and the chance to win something, and nobody in this day and age will pass on the opportunity to get a money-off coupon.Here are two examples: the first an example of a Facebook competition post by a UK company, and the second, a money-off coupon from Tide:
If you are still experiencing some doubts about how to go about growing your Facebook followers without spending a dime, then here is a very useful infographic laying out how exactly to structure, balance, and plan your Facebook content in a way that informs, delights, educates, and ultimately gains you a loyal and growing fan base of Facebook followers:
You miss 100% of the shots you don’t take. –Wayne Gretzky
I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed. –Michael Jordan
The most difficult thing is the decision to act, the rest is merely tenacity. –Amelia Earhart
Definiteness of purpose is the starting point of all achievement. –W. Clement Stone
Life is what happens to you while you’re busy making other plans. –John Lennon
Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do, so throw off the bowlines, sail away from safe harbor, catch the trade winds in your sails. Explore, Dream, Discover. –Mark Twain
Life is 10% what happens to me and 90% of how I react to it. –Charles Swindoll
The most common way people give up their power is by thinking they don’t have any. –Alice Walker
The best time to plant a tree was 20 years ago. The second best time is now. –Chinese Proverb
Eighty percent of success is showing up. –Woody Allen
Your time is limited, so don’t waste it living someone else’s life. –Steve Jobs
Winning isn’t everything, but wanting to win is. –Vince Lombardi
Every child is an artist. The problem is how to remain an artist once he grows up. –Pablo Picasso
I’ve learned that people may forget what you said, may forget what you did, but people will never forget how you made them feel. –Maya Angelou
Whether you think you can or you think you can’t, you’re right. –Henry Ford
Whatever you can do, or dream you can, begin it. Boldness has genius, power and magic in it. –Johann Wolfgang von Goethe
People often say that motivation doesn’t last. Well, neither does bathing. That’s why we recommend it daily. –Zig Ziglar
Life shrinks or expands in proportion to one’s courage. –Anais Nin
There is only one way to avoid criticism: do nothing, say nothing, and be nothing. –Aristotle
The only person you are destined to become is the person you decide to be. –Ralph Waldo Emerson
Go confidently in the direction of your dreams. Live the life you have imagined. –Henry David Thoreau
Few things can help an individual more than to place responsibility on him, and to let him know that you trust him. –Booker T. Washington
Start where you are. Use what you have. Do what you can. –Arthur Ashe
When I was 5 years old, my mother always told me that happiness was the key to life. When I went to school, they asked me what I wanted to be when I grew up. I wrote down ‘happy’. They told me I didn’t understand the assignment, and I told them they didn’t understand life. –John Lennon
If you look at what you have in life, you’ll always have more. If you look at what you don’t have in life, you’ll never have enough. –Oprah Winfrey
If you’re a good (or even just halfway decent) manager or leader then you probably already know most of this,
Integrity matters. Most good employees – and all great ones – have integrity. So, lying to them, to their co workers, or to customers / suppliers is sure to turn them off. Even just “little white lies” are all sure to catch the private ire of those employees who can best help you and your organization succeed. Don’t think they don’t notice; they DO.
It’s a small thing, but it really does make a difference. Even small gestures of appreciation, complements on good work, acknowledging that someone stayed late / came in early help keep talented people motivated and engaged. A small gift card, permission to leave early for the day or work from home the day before a holiday (if work is getting completed), a kind word, an email, all of these things cost very little but go a long way. I suggest making a point of doing them.
I’ve been part of organizations that truly lived their core values. We all knew what they were. We all agreed they were important, or at least accepted them as such. I have been in companies that barely even mention their values – and really, what that says is, “Our core value is to make more money for our owners, whatever it takes.” Not exactly compelling, but that’s what is being conveyed.
Good people almost always actually want what is best for the organization. They may have differing opinions on what that is, but they can be passionate, even fiery about it. If you’re dismissive of their concerns, you’re headed down the road to losing top performing people. Just what kind of weak, arrogant, incompetent, narcissistic leader doesn’t want to hear things anyhow?
Note that there are two dimensions to this – professional development and personal development. I would include leadership skills, street-smarts, maturity, self-awareness, EQ, general health and well being all as part of this. Leaders only follow stronger leaders, so be sure you are mentoring them. Let them learn from you; telling good stories from your experience can be a great way to do this. Help them become better professionals – and better people. Additionally, don’t delude yourself into thinking that their career growth is their problem. It isn’t; it is your problem so make a point of investing in it and top notch people will likely repay you for this with good work.
We all know that hiring people who really fit and are highly talented is tough. We know that the repercussions of a bad hire are awful for everyone. Make sure people really will fit into your organization. Let’s face it, a half hour “get to know you isn’t really enough to get to know a prospective employee well enough to make a truly informed decision. Talented people often don’t mind a tough (within reason) selection process because they are usually competitive people who thrive on challenge. Invest the time needed to really explore what makes a person tick before you hire them. Oh, and by the way, talented people want to be around other talented people.
Do I really need to go here? Yes, unfortunately. It’s not just classical micromanagement either. I’ve seen truly exceptional people who excelled in their role end up with their jobs “dumbed-down” to cater to the lowest common denominator, and to the point they were no longer challenged or motivated. Needless to say, it wasn’t long before they were looking for an opportunity somewhere else.
Great people will get discouraged and either leave or adapt to mediocrity if that is what they perceive is deemed acceptable. I’ve seen mediocrity accepted, rewarded, applauded, and even promoted! The impact of this on team morale (and on the highest performing team members) was palpable. Set the bar high and then become a cheerleader – even if people don’t make it over the high bar, point out how high the bar was set and how high people did get, and celebrate the success they did have at the right level. They may just make it over that high bar the next time.
People are human. Why do we seem to forget this so often? They have personal struggles, ambitions, families, crises, etc. One of my favourite bosses from the past was a gentleman who knew my wife’s name, my son’s name, my dog’s name, and more. He didn’t go beyond appropriate boundaries, but I really knew he cared about me as an employee and as a person. I knew I could talk to him and he’d help me out however he could. He got a lot of loyalty from me in return. I should also point out that talented people watch how you treat other people, and they take note of it.
Yes, the “usual” things will usually get a good person out of your organization as fast as they can possibly find an opportunity elsewhere. Incredibly, I’ve seen organizations under-pay very good people. One executive even said to me, in private, “Well, just what are they going to do? Leave? They have no place to go. This was disappointing to say the least, and I lost a lot of sleep over it. Plus, it wasn’t long before people actually did have someplace else to go, and go they did.
Many of us aspire to big roles at work — we want to be the boss. Of course, once we get there, it’s not always as glamourous, or as easy, as we had imagined it would be. That’s especially true for entrepreneurs.
The secret to excelling at being in charge are subtle, but important. It’s a topic several LinkedIn Influencers weighed in on this week.
Here’s what two of them had to say about what it takes to be an entrepreneur and the head honcho.
Richard Branson, founder at Virgin Group
“I’m often asked, ‘What does it take to be the boss?’ It’s a hard question to answer,” wrote Branson in his post What Does it Take to Be the Boss? Managers Versus Leaders. “In my opinion, there are two types of bosses: managers and leaders.”
A leader’s role, he wrote, is to work with people “to change the lives of others for the better”. Management, on the other hand, is “about maintaining processes, disciplines and systems. Where managers keep the rules, leaders have to be willing to break them, or at least find creative ways around them”, Branson wrote.
Both are important in business and to being a boss, but “it’s critical that you possess leadership qualities”, especially if you want to go into business for yourself, he wrote. The key, he wrote, is to have both types of people in a company for the best chances of success. “The business world needs both managers and leaders to fill the role of the boss,” Branson wrote.
“When you believe in something, the force of your convictions will spark the interest of others — helping you recruit people that share your vision and are motivated to help you achieve success,” Branson wrote. “And passion is not only just a handy recruitment skill; it will also help you strike up meaningful relationships and partnerships with other entrepreneurs and business people. Many of these… will likely be great managers who can help your business grow.”
Ron Shaich, founder, chairman and chief executive at Panera Bread
“Say the word ‘boss’ and most people imagine a well-heeled executive, jetting between meetings and bellowing directives that a faithful group of employees dutifully carry out,” wrote Shaich in his post Want to be the Boss? Better Know Exactly What it Means. “Not exactly.”
“To me, being the boss… has meant solitary hours contemplating challenges,” he wrote. “It’s meant sleepless nights weighing options before making hard decisions that no one else wants to make and knowing that their success or failure is ultimately my responsibility. It’s meant sweating the details.”
Shaich offers what he calls “the harder truths about calling the shot”. Among them:
“Usually, the business owns you; you don’t own it,” he wrote. “Building a business is all-consuming — as in, it consumes all of your waking hours and many of the ones you should be sleeping. It’s with you in the car, the shower and on vacation. Most people who build businesses can neither turn off nor throttle down their commitment to their pursuit.
“You’ll have many opportunities to make decisions because a boss’s challenges are never-ending.
“As long as that business is your responsibility, you will need to think long term. You will need to innovate, iterate and improve.
“Ironically, if you are successful, you will not be beholden to fewer constituencies; you will be beholden to more.”
If it sounds daunting, Shaich wrote, it’s still something he’d never trade for something easier.
“While being the boss can feel at times like a long and lonely journey, there is a payoff — and it’s not power or money,” he wrote. “For me, it’s the joy of solving problems no one else can. It’s seeing opportunities others miss and developing strategies others can’t imagine. It’s building a venture from the ground up.
“Being the boss is infinitely rewarding when you truly understand what you are working toward.”
The exploration of weather’s influence on sales reveals that inclement weather often influences retail sales negatively. Retailers can predict some of these trends using long-range weather data along with sales by month across several years, and reduce profit loss even when the weather is undesirable.
Weather influences in a number of ways. Inclement weather keeps foot traffic away from brick-and-mortar stores driving customers to online retailers, which can reduce sales as much as 10 percent. Bad weather also prevents traveling and closes stores.
Not all retail stores are negatively affected by bad weather. Retail pharmacies, for example, sell necessities such as prescription and over-the-counter drugs, and the resulting sales are stronger than other retail segments. While it seems counterintuitive that people would shop for optional items during bad weather, highly popular clothing stores and those that cater to teens can experience growth during a bad winter, at least more than other stores. Sales are partially dependent on what customers consider a necessity. The fact that inclement weather’s influence does not reduce sales across the board suggests that retailers can plan effective strategies to cope with weather.
Managers can cash in on these trends in weather by paying attention to when customers tend to buy certain items in response to weather and then stock stores accordingly. A leading auto company did this by noticing that older automobile batteries tend to die after a few days of below-zero weather. Following such a spate of weather they advertised the batteries. A second way to monetize weather’s influence in the retail sector is to make staffing decisions based on weather reports, calling in fewer employees during bad weather when fewer customers are expected to shop.
Making money from thoughtful decisions about the weather’s influence and the resulting sales can be bolstered by data analysis. Relevant data can include long-range average temperature in bad weather months and other weather data, sales during those months. While large companies have in-house analysts, tools exist on the web that allows people without specialized statistical training to plan effectively around weather events.
The weather’s influence can drive profits up or down; depending on how carefully you plan for handling bad months. These strategies may not directly increase profits but they may effectively reduce loss, saving the company from financial hardship.
Robin Sharma believes there are certain skills and attitudes that allow you to rise to extraordinary success:
1) You’re paid not just to work. The place where your greatest fears live are where your greatest growth lies. This ability to stretch yourself out of your comfort zone will allow you to grow as a leader.
2) The old model of leadership is obsolete. Now anyone can show leadership.
3) A job is only a job if you choose to see it as a job. Your job is an opportunity for you to express more of the talents that you have.
4) Your number one competitive edge is growing leaders at all levels. Your job is to grow more leaders. If you are not doing this you are just enabling followers.
If you are developing talent all around you and you are growing more leaders, your business will become unstoppable in the market place. You will also feel fantastic about your work because you will be provoking and inspiring people to do work that they have never done, that’s Leadership!
1) Inspiration. Creative businesses where born in a moment of inspiration.2) Influence. Your team will behave exactly the way that you behave.3) Impact. Less Talk more Do, Ideation without Execution is mere delusion. In the age of dramatic distraction there is a need to roll up your sleeves and FOCUS on a few deliverables.
The number one trait of success:
1: Who did you become? Did you spend all your potential?2: How many people did you help? How many leaders did you grow? How much value did you create for your clients?
One of the toughest things you must do as a businessperson is get paid! You work hard for your clients to provide them with a valuable service, and then spend months chasing your money. The truth is, many invoices get put on the back burner, because unlike credit card companies who will immediately report the late payer to a credit agency, the smaller business will usually not do this. It’s a tough call, sometimes, but you’re the one who will suffer if you don’t make it.
The First tip is the one you NEED to use for this month while people have any money to give – We all know it will get doubly hard to collect money in Jan/Feb
Follow up every day until you receive your money. Obviously, you should try to get paid before this need arises. Once your client realises your payment policies are lax, s/he will opportunistically attempt to exploit it. And remember – every minute that you are working to get paid is a minute that (A) you are working a second time for money you’ve already earned and (B) you are not working on a new job, which still needs to be finished on time, and you’re running that job later by the minute.
You will need to consider ALL these tips in Janauary so you do not have a list of unpaid invoices in December 2015 !
Make your payment policies clear at the time your services are retained. However your business is approved, at some point, your client must agree to your estimated price for the work they want done. If your payment policies are stated clearly on your contract, bid, or whatever document you use to bind the contract, you are ahead of the game.
Accept all forms of payment and encourage credit card payment. If possible, take credit cards. In this way, you are sure to be paid in timely fashion even if the client doesn’t have the funds at the current moment. Shop for a merchant account provider and set up credit card processing for your business.
Get a deposit in advance. Unless you have a relationship of long standing with the client, get money in advance, and then plan to collect some more midway through the job. Usually, this is 30/30/40 – 30% in advance (to bind you, and to enable you to purchase materials), 30% upon completion of some agreed-upon benchmark, and the balance upon completion. By the way, make sure it’s clear that “completion” means on the day you deliver it – not whenever they feel like it.
Always let the customer pay when they offer. One of the dumbest things business owners do is shoot themselves in the foot by not accepting a payment when it’s offered. Many times, a client will ask, “Do you need a cheque now?” and the business owner says, “No, that’s okay, we’ll get it at the end.” Don’t do this! If the customer is happy to pay up front – let him!
Make arrangements for payment before you deliver the final product. Hold back enough so that they will need to pay you before you deliver the finished job. It is notunprofessional for you to do so, though many business owners consider this a “low-rent” practice. It’s not low-rent – it lets them know that you are a professional accustomed to being paid for your work in a timely manner. Just say something like, “Hey, Mr. Jones, I have your job all ready to deliver. Can you have a cheque ready for me if I swing by around 3 PM?. The balance due is €470.78.”
Apply your payment policies to every single customer. Don’t give your friend Joe’s buddy a bye on this. If anything, treat friends of friends with even less trust than a stranger – they often attempt to take advantage of your cozy relationship with their brother, buddy, whatever. If this guy has not paid you by your due date, call him immediately and ask for payment. If you are put off till the next day, call again the very next morning.
Contact the credit agencies. Printing a warning on the bottom of your invoices is fine, but if you fail to follow it up, you won’t ever be taken seriously. Contact the credit agencies and report late-payers. If it’s their first time, call the client first, and let them know that you’re terribly sorry to do it, but unless you receive their payment before the 30 day deadline, you will have to report it to the credit agencies, thus damaging their credit. It’s a powerful incentive to pay.