Double your company's profits in less than 6 months (Part II)

To what extent can you increase your department's/company's profits? Let's take a look. Imagine if you are working for a shoe retailer and the company currently shows the following numbers every year.

The Impact of Increasing The Five Key Variables by 10%

Do you think it is possible to increase each variable by 10%? Of course! It is only a question of testing out different strategies and taking action!

a. Increasing Leads

What can you do to help your company increase leads? The specific strategy would depend on whether your company is a Business to Business (B to B) enterprise or a Business to Consumer (B to C) enterprise. But in general, you could take the following actions!

• Learn how to create more effective advertisement (Stronger headlines, more persuasive copy, i.e. text)
• Test new media channels (e.g. Newspaper, magazine, outdoor ads etc...)
• Make more cold calls
• Use telemarketing efforts
• Hold seminars & road shows
• Increase networking efforts
• Hold special promotions
• Create a referral system or member get member scheme
• Start email marketing... the list goes on

b. Increasing Conversion Rate
How can you boost your company's conversion rate? There are many strategies you could use such as...

• Creating a more flexible payment plan (0% interest installment)
• Offer a product guarantee
• Use successful testimonials
• Create more persuasive marketing materials like brochures, videos
• Use NLP* techniques to build strong rapport with clients
• Innovate a new persuasive sales script that works
• Create a more powerful, impressive & persuasive presentation
• Keep following up with prospects regularly... and the list goes on

c. Increasing Average Dollar Purchase

At the same time, there are many things you can do to boost the average dollar purchase of each customer. One great example I can give you is McDonalds. What do they do? They simply ask you to buy only a cheeseburger? Do they just sell you the cheeseburger? No! they will ask if you want to have a combo meal. They will then ask you to upsize the meal.

Next, they will ask if you would like to have a dessert to go along with the meal. Finally, they will ask if you would like the toy that is on promotion. So you go in wanting to spend $2, but end up spending $10! They are great at getting their customers to increase their average purchase by five times.

I give you an example eariler on about the advertising account director who was able to convince his clients to increase their advertising budget. How? Because he showed them that by investing an extra $300,000 in advertisements, they would be able to generate $600,000 in additional profits. If you can show your clients that their investment in your profuct will reap great returns, they will spend more. So what can you do in your company? Maybe you can:

• Bundle several products in a package
• Create a 'buy three get one free' promotion
• Up sell & cross sell
• Educate your customers on your entire range of services
• Do a complete needs-analysis to find out how you can add even more value (remember the example I gave you about the insurance agent?)

... and the list goes on.

*NLP or Neuro-linguistic programming is the science of being able to program a person's neurology using the power of language. To learn more, read 'Master Your Mind, Design Your Destiny'.

d. Increasing Repeat Business
What can you do to boost the number of times your customer keeps coming back? Well, you can...

• Exceed their expectations & give them a wonderful experience
• Build a friendship with them
• Keep in regular contact
• Send them a special occasion cards
• Start a loyalty program
• Give them a discount voucher off their next purchase...

e. Increasing Profit Margins
Finally, how can you increase your company's profit margins?
You can

• Source for cheaper suppliers which are just as good
• Bargain hard with existing suppliers
• Sell higher margin products first
• Increase working efficiency (do it right the first time)
• Strategize how to reduce unnecessary costs...

The strategies that I have just presented to you are just the tip of the iceberg. There are many more strategies that you could test out. I have included a whole list of ways you can increase each of five variables at the end of this chapter.

Now, with all these strategies I am giving you, do you think by fully employing just some of these ideas you can boost each variable by a mere 10%? Of course! Let's see what happens when you do so...

Just by increasing each variable by 10%, profits jump to $80,530! That is a 61% increase! This is the power of compounding. Small consistent increases in each variablr create huge effects to the bottom line!

But this is not challenging enough. Now, think what can happen if, through innovation and hard work, you can help increase each of your company's variables by 20%

As you can see, profits more than double (149% increase) to $124,416! Excited yet? Don't be! From my vast business consulting experience I have found that is very possible to double certain variables like 'Leads', 'Conversion Rate' & 'Number of Repeat Businesses' and increase 'Average Dollar Purchase' & 'Net Profit Margins' by 30% What happens then?

The net profit jumps by 13 times to $676,000! If you can create so much more value to your company/department, you can ask for a whopping 5X increase in salary, and it would still appear cheap to your boss.

Now, you may say to me, 'But I am not directly in control of alot of these factors. Some of these factors are not even within my job scope'. Remember, when you are committed to a goal, you will find a way! Do whatever it takes! Sometimes, you must do things out of your job scope to make an impact. Again you want to do so without upsetting the people around you too much. You may also want to consider asking for a transfer to another more challenging position where you can directly influence sales and costs! This way, it is easier for you to create move value!

Extract from Secrects of Self-Made Millionaires by Adam Khoo.