At some point, most business owners find their profits have plateaued. Or maybe they’ve even decreased…
This can be a huge concern especially if you are operating with more staff and clients, yet aren’t managing to make the profits you should be.
After helping 100s of business owners to scale and profit over the last decade, I’ve found that there’s actually 5 ways to grow a business profitably… and if your business isn’t seeing the profits it should be, you might find the reason below...
You’re chasing new leads
This can seem a bit counter-intuitive, right? I mean, what business doesn’t need more leads?
Well, the problem is that acquiring new leads is expensive. It requires a cost outlay in terms of advertising spend. However you get new leads, whether it’s Facebook ads, Google ads, print advertising… it all costs money.
And if your conversion rate isn’t great… you’re just turning money into digital confetti.
Let’s say a new lead costs you $10 and you convert 1 in 5 leads… you have to spend a LOT of money to get a few sales. What would happen if instead of throwing cash at advertising, you focused on improving your conversion rate instead?
What if you could improve sections of your funnel and bring that conversion rate up to 50%, or even 80%? Then your campaigns would be looking more like the cash machines they should be!
You’re focusing on one sale at a time
Many campaigns are set up to advertise one product, and if the customer doesn’t buy it, that’s the end of the campaign. The sale is either gained, or lost.
But most digitally savvy marketers know that the real money is actually made in the back end of the campaign.
By this I mean the upsells, downsells and special ‘one-time-deals’ that are advertised on the back of the initially advertised product.
Have you ever bought something online, and been offered something related at a discounted rate on the checkout page?
That’s some clever marketing. And it works.
The psychology behind it is that the customer has already committed to spending. So the hard work is done. The goal then is to fill their cart with 1, 2, or even 3 more items to maximise profit from the sale.
Offering upsells not only maximises checkout revenue, it also reduced front-end advertising spend. Instead of advertising just one product at a time, offering upsells and downsells means you’re actually advertising 3 or 4 products at once. Which brings your cost of sale down, and brings your profitability up.
There’s a hole in your retention rate
You’ve done all this work to acquire your customer. You’ve sold them a product or two. Or you’ve completed the service offered. What are you doing to keep them buying from you?
Are you remarketing to bring clients back in?
Do you have an ascension model where customers get offered bigger (and more expensive) deals as they keep purchasing from you?
Do you offer a VIP program or have a community that keeps clients in your world
If you’re simply letting one sale be the end of your story… that’s a huge mistake.
We all know that it costs more to acquire a new customer than to sell again to an old one. So if you are wondering why your profits haven’t increased despite being busier than ever… it’s time to get in touch with those people again.
Because your past customer list is an untapped goldmine.
Think about it - assuming you did a good job on their previous purchase, these people already know, like and trust you… which is 99% of making the sale.
Your break even point is wrong
A lot of people base their products or services on what they think it should cost, or what the market is doing, or any other arbitrary idea… not what their business actually needs to make per sale for it to thrive and succeed.
Every business has a lot of overheads - staff, equipment, office rent, taxes, and more. If you aren’t aware of your total costs, you cannot know your break even point at which the business is profitable. So how can you possibly expect your pricing to reflect your business break even point + 25% profit, as it should?
Businesses that set their prices simply based on what the market is doing end up competing with other businesses on cost… which means they don’t make enough money and face going bust.
What would happen if instead you set your prices to take care of your break even and make a healthy 25% profit on top… and then used some of that profit to position your product or service as superior, and worth the extra money?
Then you’ve got a much more profitable and reliable business on your hands.
Why The Help Of A Business Coach Can Help Your Business Overcome This
If you’d like to explore proven strategies to take advantage of the opportunities I’ve written about in this article, I’d love to help.
The Game Changers have helped 100s of businesses triple their profits and take more time off, by using a proven methodology that results in rapid and sustainable growth.
If you are interested in knowing more about The Game Changers, I invite you to book a complimentary 15 minute call. We’ll have a quick chat to get a broad overview of where you’re at, and what’s going on with your business.
From there if we think we might be a good fit, we invite you to a longer 1 hour call. On this call we go much deeper into your business, where you want to go, what has been stopping you from getting there, and whether we think we can help you achieve the success you want.
If that sounds like something you’d like to explore, click here to book your complimentary 15 minute coaching call right now.