| Too often in business we get trapped into | | | | Its purpose is to stimulate a phone call, letter or a |
| reviewing our sales numbers without analyzing the | | | | visit. Best of all, unlike an institutional ad, it is |
| all important "profit" number. This is commonly | | | | trackable so you can make every dollar you |
| referred to as the "bottom-line" of a business. | | | | spend on it accountable. This then helps to |
| There are various ways you can dramatically | | | | measure the effectiveness of each ad.3) The |
| impact your profitability.1) Under Pricing Kills | | | | Easiest Way To ProfitsKeep a lid on spending! |
| Profits!Many small businesses have thinner profit | | | | Resist the urge to spend freely. You may like the |
| margins than larger firms do because they tend | | | | way a lavish office and expensive furniture looks, |
| to under price their products or services. So why | | | | but does it really contribute to your business? In |
| not just raise prices? I know the feeling--you're | | | | some businesses, a fancy office is critical; in most |
| scared that your competition might swoop in like | | | | it is not. I once had a small business owner who |
| a bird of prey and your customer base might | | | | spent $5,000 on his front office desk in a |
| shrivel overnight!If you have thought about raising | | | | business operation that had no "office visits." |
| prices but haven't done so, let me give you an | | | | Needless, to say, this business owner did not |
| example that may give you the confidence to do | | | | survive too long in business due to this and other |
| so. My client, Steve Lopes of Stanley Steemer | | | | extravagances. Get as much value out of every |
| based out of Edison, NJ had a positive experience | | | | transaction, whether you're leasing office space or |
| from raising prices about a year back. After giving | | | | stocking the kitchen.Important caveat: Don't |
| me much resistance to my advice to raise prices, | | | | compromise when it comes to spending money |
| Steve agreed it would be prudent to test it. The | | | | on your own self-development. Small business |
| result? Sales and profit went up for the month in | | | | owners don't give this enough importance and |
| which he raised prices and Steve was pleasantly | | | | thus spend far too little money in this area. This is |
| surprised at the little, if any resistance he got | | | | a big mistake. As an example, in the next 5 |
| from his customers.Since then, Steve has | | | | weeks, I'll be attending three conferences across |
| increased prices 2 more times. What happened to | | | | the country and investing about $4,300 in seminar |
| sales and net profits? Sales surged by 25% for | | | | tuition fees, travel and boarding. Not a small chunk |
| that 12-month period and net profits for that | | | | of change you would agree, but in my opinion, |
| same period skyrocketed by 84%. Since Steve's | | | | well worth the investment. You are the most |
| sales are in the 7 digits, these sales and net profit | | | | important asset in your business. Take good care |
| increases equate to very significant numbers. Best | | | | of you.4) Have You Got A Back End For Every |
| of all, it allows Steve with a lot of extra cash to | | | | Sale?Most small-businesses ignore the easy |
| do things he wanted to do in his business and | | | | money to be made with a back-end sale. Yet, the |
| personally.Still unsure about raising prices? | | | | really smart business owner never forgets that |
| Remember, you can always cut them back. More | | | | the most profitable words in the history of |
| likely then not, you'll be surprised at the positive | | | | business were: "Would you like fries with that?" I |
| impact it'll have on your business, assuming of | | | | have read that these words instantly doubled the |
| course you continue to provide the same or | | | | total sale.Your biggest expense is reaching a new |
| better level of service to your customers.2) Is | | | | customer. If you succeed to winning him over to |
| The Marketing Working?Make your advertising | | | | the point that he pulls out his wallet and gives you |
| accountable.You've probably heard the familiar | | | | money. . . he will often continue to give you |
| maxim: "Twenty percent of my advertising brings | | | | money if you offer something else. Yet, you do |
| in 80 percent of my business, but I don't know | | | | not need any expensive advertising to do this - |
| which 20 percent!" I see that as a common | | | | he's already listening to you. You simply have to |
| problem with many small-businesses. They don't | | | | open your mouth and offer him something |
| track their marketing to know what's working, | | | | else.Savvy small-business owners will have |
| what's not. This problem stems from a bigger | | | | something more expensive to sell, and something |
| problem and that is not being aware of the | | | | less expensive. Something else that fits in with |
| difference between institutional and | | | | whatever the initial sale was. . . and something |
| direct-response advertising.Institutional advertising, | | | | else that just has broad appeal. But they will |
| also known as image advertising, is all about you, | | | | always have something on the back-end.5) |
| the business owner. How great you are, your | | | | Outsource JudiciouslyOne of the battle cries in |
| qualifications, years in business, "full-service" | | | | business today is to determine the one thing that |
| product line, etc. It's the most common form of | | | | your business does best, become even better at |
| advertising. You see institutional ads every day in | | | | it, and outsource absolutely everything else. There |
| print or in TV. They're often cute, creative, funny, | | | | is certainly a lot to be said for taking a careful |
| utterly ineffective and not trackable. Simply put, | | | | look at every function in your business and asking |
| an institutional ad has no way to track results and | | | | yourself if you should outsource it. But take a |
| is there to keep the company name in front of | | | | hard look at the numbers before you decide to |
| the public.By contrast, direct response advertising | | | | jump on the outsource bandwagon! |
| is all about your customer and his or her needs. | | | | |