Are Your Business Offers Leaving Money On The Table?

By | Grow Business, Time Management

Upsell Business OffersAre your business offers leaving money on the table?

Last month, I was in the market for a new SUV. When I went to the car dealership, I selected what I really wanted and just prior to making the purchase, I was made an offer to upgrade to a service, a valet service for repairs and maintenance.

Every time I need to have routine maintenance and service done on the vehicle, a driver from the dealership will come to my house with a loaner vehicle, drop it off, take my vehicle in, have the service and repairs done, and then return my SUV to my home.

So I won’t have to waste time at a dealership, sitting around drinking bad coffee, waiting for repairs to be done.

Instead, I can be doing something more productive with my time, which I value far more than the cost of this upgrade to the private valet service.

Many business owners fail to make upsell offers or cross-sell offers of products or services to their customers. And you’re leaving money on the table if you don’t make these offers.

Let’s say that 20% of your customers accept the upsell or cross-sell that you make to them.

Now, run the profit numbers on that and see what a difference it will make to your bottom line.

If the economy is down and you’re struggling, it may be the difference between staying in business or closing up shop.

Of course, when the economy is booming, it’s a gravy train because you’ll have a higher conversion rate when your customers are willing to spend more.

Now, it’s important to make sure that your upsell or cross-sell is related to the underlying base offer. If you’re trying to upsell or cross-sell something totally unrelated, it’s not a natural fit.

Then your conversion rates are going to plummet because it’s incongruent with the desires that induce the customer to come to you in the first place.

Don’t wait for customers to come to you and ask, “What else do you have?” Chances are that question will not be asked. And this means your business will not be as profitable as it could be.

So take a look and see what you have as potential supplemental offers.

Now, what if you don’t have any other options?

Create some.

For example, take a look at what’s out there in the market and see if there’s something that you can sell from elsewhere on an affiliate/referral basis to a non-competing business. Make a deal with this non-competitor to earn a commission off of each referred sale or to get paid per referral whether or not a sale is made.

Why you should be Cobra Kai, not Mister Miyagi

By | Grow Business

continuity agreements are ideal for martial artsSometimes your expertise is the biggest obstacle to your business succeeding. This is true for both products and services.

I’m active in a niche that’s facing a bloodbath after the COVID-19 shutdowns. And it’s true the government-ordered shutdowns pushed them over the edge into bankruptcy.

But these businesses were zombies before the coronavirus hit. It was only a matter of when, not if, they were exposed as the walking dead.

The Hidden Curse of Expertise

What happened?

Each of these entrepreneurs started their ventures because they were experts in their field. They enjoy selling their expertise but barely tolerate everything else needed to run a business.

For some, “marketing” is a dirty word. Prospects are supposed to spontaneously appear by magic at their door (or website) and buy.

For others, getting paid is undignified. They charge just enough for their expertise to put food on the table and pay the landlord on time (sometimes). And when COVID-19 hit, they didn’t insist upon getting paid by customers who were also suffering from the shutdowns.

Continuity Agreements

In contrast, there’s a minority of business owners within this niche that quickly rebounded and are thriving. If anything, they’ll gobble up more market share because the majority of the competition has been wiping themselves out.

What’s made the difference?

Continuity agreements.

Those committing ritualistic seppuku continue to insist their expertise only be provided on an as-needed basis with no long-term contracts.

On the other hand, those business owners who are thriving sell their expertise using contracts that are one to three years in length. Most of the customers pay on a monthly basis. Others prepay in full.

Is this a heartless way for an expert to do business? Particularly if customers are also suffering because of COVID-19 shutdowns?

Not at all. In fact, the income generated by the continuity agreements has enabled these business owners the discretion to act charitably in genuine cases of hardship. One popular method used is a contract freeze and extension. Services are suspended for 2-3 months so that the customer doesn’t have to make monthly payments. And those months are tacked onto the end of the contract extending the term.

Imagine having that type of flexibility.

It’s hard to do so when you only get paid for occasional product purchases or on an as-needed basis for services.

Examine your business model and see if continuity contracts are the way to go…at least for parts of your company. Then have an experienced business contracts lawyer prepare a custom continuity agreement that’s designed to get you paid over and over again throughout the term of the contract.

Changing Your Business Model

Just about any company can do continuity agreements.

Sell software? Turn it into an annual software-as-a-Service (SaaS) subscription or offer annual support/maintenance contracts.

Sell fashionable clothes? Have annual contracts for an “in a box” subscription service where the customer pays monthly for seasonal (quarterly) shipments of clothing.

Personal training (for just about anything)? Don’t charge per session when/if your student shows up. Sell your expertise by annual or multi-year contracts that generate income monthly whether or not your student takes advantage of your expertise.

Don’t assume it isn’t feasible just because your competition isn’t doing it.

Test and see.

Prequalify Prospective Customers Using Hoops

By | Grow Business

prequalify prospective customers - jump through hoops

As you build your company, you establish both a business model and processes that make it work smoothly for you. In addition to targeting your ideal customers, a good system alienates those you want nothing to do with. In other words, you prequalify prospective customers to save everyone time.

For example, if you’re selling a relatively expensive product, you’ll invariably implement procedures that quickly eliminate prospects looking for a cheap deal.

One of my service companies uses a model that prescreens prospects by making them jump through a series of initial hoops…taking small actions. Each hoop serves the purpose of weeding out those who will not be a good fit.

For most bad prospects, they take one look at the hoops and run the other direction. We don’t even hear from them because it’s clear we’re not what they’re looking for.

Of course, some will claim this is mean. Yet it’s doing each prospect a favor by helping them decide whether or not it makes sense to do business with us or go to a competitor that has different priorities that better match their unique needs.

A couple weeks ago, a prospect tried to short circuit the prescreening process by insisting we do business his way. When that failed, he came back a week later and reluctantly jumped through the initial hoop.

At that point, rather than acknowledging it was a mismatch and moving on, the prospect decided to teach us a lesson. After insulting us, he offered to tell us what we were doing wrong with our proven business model so that we could win prospects like him in the future. We declined.

Of course, he didn’t understand that we don’t want to do business with prospects like him because it isn’t a good fit. To learn and apply his “lesson” would mean to transform the company into something it isn’t — and doesn’t want to be.

Does this mean one should never listen to business advice from others? Of course not.

But take it with a grain of salt when a prospect insists you change your company to do business the way the prospect wants you to.

It’s your business. Your rules. Use them to prequalify prospective customers. Because there are plenty of prospects who do fit your model and are willing to do business on your terms. Those that don’t qualify should be shown the door as quickly as possible…and ideally don’t enter in the first place.

Is Your To-Do List Fermenting Like A Dead Badger?

By | Time Management

to-do list prioritiesHave you been procrastinating on getting stuff done on your task list? Are there items that have mummified because they’ve been there so long without any action taken? In other words, are your to-do list priorities a mess?

For productivity and peace of mind, it’s time to get rid of this deadwood hanging over your head.

Now here’s what to do to fix your to-do list priorities in four easy steps…

1. Naturally, scan your task list for any obsolete items. If it’s moot, scratch it off.

2. Are there any tasks on your list that aren’t essential to your business or personal goals? Get rid of these. Don’t confuse nice-to-have with a must-do. It’s okay to say no to some work.

3. What if an item is essential but you don’t want to do it? Dump it on someone else. Delegate the task to either an employee or an independent contractor.

4. Then prioritize what remains. These actions are vital and you want to do them. Then start chipping away at these remaining tasks for an hour or two each morning when you get up.

And repeat these pruning steps once or twice a month to ensure your to-do list priorities reflect the business goals you want to accomplish. For my business law firm and other companies I co-own, I typically do this on a Sunday night. Trimming tasks by this method frees up time for you to grow your business and spend time with family and friends.

How Pity Crowdfunding Increases Business Cash Flow Problems

By | Grow Business

business cash flow problemsMark has business cash flow problems because his company was forced to close down as “non-essential” for months during the 2020 coronavirus lockdown. And when he reopened, many of his prior customers didn’t return to the shop.

Pity crowdfunding is not the solution

As he struggled to pay rent and rebuild his business, a well-meaning friend set up a GoFundMe crowdfunding campaign to help Mark’s company stay afloat.

Despite the good intentions, this charitable effort painted Mark’s business with the stench of fiscal death. Instead of raising the necessary funds, the campaign told past, present, and prospective customers that Mark’s business was headed for bankruptcy.

What should Mark have done instead to fix business cash flow problems?

Sold his products or services in bulk with a discount for prepayment. This would raise funds easier for his business by providing customers something they wanted instead of playing the sympathy card.

This tactic works for both subscription and non-subscription businesses.

If Mark sold a monthly subscription, it could quickly be bundled as a special one-time-offer (OTO) to prepay for a year and get two months free.

If the business does not run on a subscription model, Mark could figure out what the average customer purchases annually of his products or services and offer a similar prepaid offer for 12 months’ worth of these products or services.

Does prepayment for a year hurt future revenues?

Some might contend that’s robbing Mark’s future by getting the cash now.

However, that’s not the case.

What it does is buy the company time by giving it the cash flow lifeblood it needs now. In addition, Mark should have additional capital from these deals to invest in direct response marketing to past and prospective customers to grow his business in the coming months.

The importance of past customers to cash flow

Note the inclusion of past customers.

It’s far easier to reacquire past customers than to convert a cold prospect into a new customer.

Done correctly, Mark will recoup many of these former customers and solve his business cash flow problems. They just haven’t been given the right offer yet that convinces them to return.