If there is only ONE resolution you can set for your business for 2016 and beyond, I hope it is this one:
Make sure you understand your NUMBERS, so that you know where you left money on the table.
Let me ask you a couple of questions:
1. What kind of business are you in?
Answer: You are not in the hardware business, retail business, consulting business, etc… the right answer is, you are in the business of “buying customers”. Every RM you ever spent in sales & marketing is for one purpose, to buy customers. You make profit when it cost you less money to buy & service a customer than what they spend with you.
Think about this for a while until you really get it…
2. Continuing from question 1, if you know for every RM1 you spend, you will make RM2, how much RM will you be willing to spend on buying customers, ie, on your sales & marketing?
Answer: you will be willing to spend as much as you can knowing that you’ll make it back, ie, you will be willing to have set an “unlimited” marketing budget.
3. So how do you know whether you are able to make RM2 out of every RM1 spent to buy a customer?
Answer: If you are testing, tracking and measuring everything in detail and you know your numbers like acquisition cost, lifetime value, frequency of repeat sales, etc, etc…
There’s no way around having to know your numbers if you are in business… else you’re very likely to be flushing money down the toilet every time you execute a strategy.
We would like to end this last post of the year by highlighting a few wins throughout the year in no particular order:
1. EVERYONE stayed positive in the midst of economic downturn and continued to spend on their sales & marketing, understanding that without source of leads and repeat business, there is no business.
(Part 1: Recession, Time to Cut Costs?
Part 2: Recession, Time to cut costs?)
2. A client achieved 82% retention rate(a new record) and opened a new branch achieving breakeven cash-flow in 6 weeks. (Details are in clients Inner Circle email.)
3. A couple made a life changing decision regarding their family business and see it through. Many business owners come to “fix” their cash-flow and quickly realize the truth – they need to align their partners/family members before any real, long-term change can take place, very few however have the courage to confront the real issues and see it through. (Focus on Resolution & Alignment)
4. With 1-2 exceptions(whom we ended our working relationship with), almost everyone else were willing to test new ideas instead of saying “this won’t work in my industry”. Well done! That is the right attitude, work out your numbers for each strategy and TEST if the numbers make sense!
(This Won’t Work In My Industry)
That’s it for the year folks, lets work on EXPANDING our market shares & wallet shares while everyone else “cut costs”, let’s have an AWESOME 2016 by focusing on the right things in our businesses!
Need help making sure your budget is spent effectively? Register NOW for our FREE Business Optimization Clinic, valued at RM750. We guarantee you will get at least 1-2 ideas you can implement immediately, even if you do not engage our services.Have a profitable week ahead!
The Familybiz Works Team
ps: Only 10 sessions every month for qualified business owners. Claim yours today!