by MHolland | Dec 20, 2024 | Business Tips, Cash Flow, Selling Tips
Growing your business one customer at a time in the cold marketplace is expensive and slow…
Want to reach more customers and grow your business? Partnering with associations and non-competing businesses is a smart way to do it.
These alliances can expand your reach, boost credibility, and create win-win opportunities.
Here is how to make it happen…
Why Strategic Alliances Work
Alliances let you tap into existing customer bases. For example:
- Associations: They have large, engaged networks. Partnering gives you direct access to their members.
- Non-Competing Businesses: They serve the same customers but offer different services. Together, you can provide more value.
Think – a landscaping company teaming up with a property management company to offer bundled services.
Find the Right Partners
Not every business or association is a fit. Focus on those with similar goals and values. Ask yourself:
- Who already works with my ideal customers?
- Do their services complement mine?
- Are they respected in their industry?
For example, a church accounting service could partner with a non-profit software provider. Both serve the same audience but solve different problems.
Create Mutual Benefits
Successful alliances benefit both sides. Your proposal should show what is in it for them.
- Revenue Sharing: Offer referral fees or profit-sharing for leads.
- Customer Value: Combine services to create a better solution.
- Shared Marketing: Split the cost of campaigns to reach more people.
For example, a customs broker partnering with a logistics company for seamless cross-border shipping.
Leverage Associations for Credibility
Associations are gatekeepers. They can boost your credibility fast.
- Attend their events to network.
- Sponsor conferences to highlight your expertise.
- Offer value, like workshops or webinars for their members.
A flower grower might team up with a horticultural association to offer tips on sustainable farming. It is a win-win.
Use Technology to Collaborate
Digital tools make partnerships easy.
- Shared CRMs: Use systems like HubSpot to manage referrals.
- Co-Branded Content: Create joint blogs, emails, or social posts.
- Virtual Events: Host webinars or live Q&As together.
These tools save time and amplify your efforts.
Build Trust and Stay Connected
Strong partnerships need trust.
- Communicate often. Keep your partner updated.
- Deliver results. Do what you say you will do.
- Review and adjust. Check in to ensure the partnership works for both sides.
Happy partners stick around.
Measure Success
Track results to see what is working.
- How many leads or referrals did the alliance bring in?
- How much revenue came from the partnership?
- Are customers responding positively?
Use the data to refine and grow.
Final Thoughts
Strategic alliances are powerful. They open doors, create opportunities, and strengthen your business. Start by identifying the right partners and reaching out.
Thanks for reading…
by MHolland | Nov 28, 2024 | Business Tips, Selling Tips
There are two fundamental ways to approach your business…
One is the Big Bang Theory. Setting BHAGs. Big Hairy Audacious Goals. Go big or go home.
You get the idea.
The other is the CANI approach to business (and life). Constant and never-ending improvement (CANI).
Small, tiny habits versus big goals.
Tiny, micro habits beat setting big goals every time.
I am a big believer in habits versus goals. Habits create the momentum towards your goals.
By doing little things consistently and improving on those little habits each week tremendous movement towards your goals will occur.
You will also be more relaxed and have more fun on the journey.
To read more about how to get started please read this:
Tiny Habits for Productivity
4 Ways to Grow
Related to the above is making tiny improving in the Four Ways to Grow your business.
In fact, just 1% change in all four areas can create a massive momentum in your business.
Each of the Four Ways is unique, requiring a different strategy.
By focusing small changes and a 1% grow strategy in each of those areas the results can compound.
Imagine what would happen if in the next fiscal quarter for your business you achieved the following:
- 1% growth in new customers.
- 1% growth in existing customers coming back more often.
- 1% growth in your average sale. Who would leave for a 1% price increase?
- 1% reduction in total expenses.
I have a chart to demonstrate the effect of this. I will go through the numbers again in a future blog post.
Branding
A friend of mine, Isabelle Mercier specializes in brand creation, systems, and outsourced marketing.
This week she writes about how to create your brand.
She uses the word “envy”, which I am not big on.
I would replace with “strong desire” to have the results that the branding offers you.
Check it out here:
Mastering Envy The Key to Creating a Strong Brand in a Saturated Marketplace
Thanks for reading…
by MHolland | Nov 13, 2024 | Business Tips, Cash Flow, Selling Tips
When it comes to sales and marketing, many businesses are tempted to treat price as the ultimate selling point.
But does focusing solely on price really drive the best results?
Studies suggest that it may not be the deciding factor we think it is. Instead, it is just one component of the larger value customers consider before making a purchase. Here, we will explore why focusing beyond price can increase profitability and customer loyalty.
The Myth of Price as the Driving Factor
Price is frequently believed to be the single most important aspect of a customer’s purchasing decision. However, data tells a different story. According to one survey, only 15% of customers make decisions solely based on price, while a whopping 68% leave a business because they feel that it is indifferent to them. This insight challenges the notion that lower prices alone can attract and retain customers.
Customers prioritize factors that give them a sense of value beyond mere cost. They want solutions that address their needs, along with a positive experience. As a result, focusing exclusively on price often overlooks the real motivations behind a purchase.
Understanding Customer Decision Factors
When considering a purchase, customers typically weigh various elements. Here are some of the top factors besides price:
- Quality: Customers want products or services that meet their standards and last over time.
- Customer Service: Excellent customer service adds significant value, as customers want to feel acknowledged and supported.
- Convenience: Easy access, fast delivery, and flexible payment options all make a company more appealing.
- Warranties and Guarantees: Risk reduction through warranties offers peace of mind.
- Personalized Assistance: Many customers appreciate knowledgeable advice and support, especially for more complex purchases.
These factors combine to create a perception of value that transcends the simple dollar amount.
A Closer Look – Why Customers Leave
In the same survey, customers were asked why they chose to leave a business. The reasons were illuminating:
- Convenience accounted for just 3% of customer losses.
- High-level relationships—such as a shift to a trusted friend or family member’s business—represented 9%.
- Product/price/time concerns accounted for 15%.
- Finally, perceived indifference—the impression that a business did not genuinely care about its customers—was the leading cause, at 68%.
This shows that price is not the primary reason customers leave; rather, it is the lack of personal engagement and attention. When customers sense that a business does not value their patronage, they quickly turn to a competitor that does.
Real-World Case Studies: Price Is not Everything
Many businesses that consider themselves in “price-sensitive” industries have discovered that focusing on non-price factors can boost their profitability. Here are two examples:
- The Electrical Goods Market: This industry might seem entirely price-driven, but an independent study found that only 18% of customers based their purchases on price. The majority were more interested in features and the benefits those features offered. Nearly half (42%) of customers made their choice based on the product’s features and the perceived advantages those features would bring them.
- Hot Chicken Store vs. Chain Franchises: An independent chicken shop found itself struggling against larger chain franchises with more purchasing power, which allowed them to offer lower prices. After a strategic decision to raise prices rather than try to compete, the owner saw an increase in profits. This pricing decision allowed him to focus on differentiating his business, highlighting a customer experience that set him apart from his competitors.
Both examples illustrate the power of shifting focus away from pricing wars and toward creating a unique value proposition.
The Cost of Discounting
Many businesses use discounting as a strategy to boost sales, but the math behind it may surprise you. For example, if your profit margin is 30%, a 10% discount requires an astonishing 50% increase in sales to maintain the same profit. In other words, discounting is often less effective than anticipated and can even harm long-term profitability.
In contrast, increasing prices can enhance profits without major losses in sales volume. At a 30% profit margin, raising prices by 10% means you could afford a 25% decrease in sales volume before profits fall below previous levels. While discounting can make a quick sale, it is rarely a sustainable way to grow profits.
Shifting the Focus to Value and Service
So, what is the alternative to relying on price as the primary marketing tactic?
Focusing on value-driven service, tailored customer experiences, and a unique business identity can be far more powerful. Here is how:
- Better Service, Better Sales: Companies with a focus on “awesome service” give customers a reason to stay, pay a higher price, and return. High-quality service not only leads to immediate sales but also creates long-term loyalty. In fact, studies show that improving customer retention by just 5% can increase profits by as much as 25%.
- Understanding and Meeting Customer Needs: When customers inquire about price, it is usually just the beginning of their decision process. Businesses that can look beyond the price question and explore customers’ needs—such as specific product features, customization options, or delivery requirements—demonstrate an understanding and commitment that resonates with customers.
- Training and Consistency: It is essential to train employees to deliver consistent, high-quality customer service. Programs like “Towards Awesome Service” can empower employees to engage with customers more effectively, creating a culture of service that naturally stands out.
Your Action Plan to Move Beyond Price
By broadening the scope of your business strategy, you can differentiate yourself from competitors who focus solely on pricing. Here are some steps to start:
- Evaluate and Adjust Pricing Policies: Review your approach to discounts and consider how adjusting prices might impact your bottom line. Avoid excessive discounting, which can erode long-term profitability.
- Invest in Customer Service Training: Equip your team to offer service that goes beyond customers’ expectations. Programs focused on “awesome service” can be especially beneficial.
- Ask the Right Questions: Train staff to go beyond quoting a price when interacting with customers. Encourage them to ask about the customer’s specific needs, preferences, and timelines.
- Consult with a Financial Expert: An accountant or financial advisor can provide insight into effective pricing strategies that support profitability without undercutting value.
In Conclusion
Price, while important, is rarely the most compelling reason customers choose to buy from a particular business. Often, they are looking for a positive experience, a feeling of value, and a sense of connection with the business. By shifting focus away from price and toward quality, service, and a unique customer experience, your business can stand out in ways that drive customer loyalty and profitability—without racing to the bottom on price.
Thanks for reading…
by MHolland | Oct 30, 2024 | Business Tips, Selling Tips, Systems
A family business is more than a company. It is legacy, values, and generations of demanding work. It is unique. And just like every family is different, every family business has its own way to define success. So how do you know if you are on the right path?
Key Performance Indicators (KPIs) can help. KPIs keep your business on track. They are like the dashboard in an aircraft. Without KPIs you are flying your business blind.
Why KPIs Matter
KPIs are your business’s health check. They are the numbers that tell you if you are thriving or just getting by. They give you focus. They drive decisions. Think of KPIs as the vital signs of your business. With the right KPIs, you will know where you are winning and where you need to improve. Every business and organization needs this insight.
Step One – Align KPIs with Goals
It starts with a simple question – what is your 3-year Vision? Where do you want to go?
For some, it is growth – it is increasing revenue.
For others, it is improving efficiency or customer loyalty.
Your KPIs should match these goals. No random metrics. If your goal is growth, measure revenue or profit margins. If your goal is customer loyalty, look at repeat sales or retention rates.
Every KPI should connect back to what matters most. This keeps you focused and cuts out distractions.
Step Two – Make KPIs Measurable and Clear
Numbers matter. The best KPIs are specific and measurable. Think percentages, timeframes, or raw numbers. For example – “Increase monthly revenue by 15%” or “Reduce customer complaints by 25%.”
These are clear. They are easy to track and easy to understand. Avoid vague goals like “Improve customer service” without any numbers. Specifics matter. The clearer the KPI, the easier it is to measure it.
Step Three – Get a Good Mix of KPIs
KPIs should be balanced. A good mix looks at the big picture.
Financial KPIs like net profit or gross margin are crucial. But they are not the only numbers that matter.
Customer satisfaction, employee turnover, and process efficiency matter too. Each tells a part of the story. Financial metrics show profit and cash flow. Customer metrics show loyalty. Employee metrics show team stability and morale. Together, these KPIs give a full view of your business’s health.
Step Four – Keep KPIs Realistic
Ambition is great but keep KPIs achievable. Aiming for the stars is fine, but do not let it become unrealistic. Unrealistic KPIs can lead to burnout, disappointment, and poor decision-making.
Think about why you are in business in the first place. Most people go into business for freedom. No one wants to be a slave to your business. Do you?
Start with reachable goals and increase gradually. If you are tracking profit margin, aim for a 5% increase this year, not 50%. Realistic KPIs keep your team motivated and moving forward. Small, steady wins add up.
Step Five – Review and Adapt KPIs Regularly
KPIs are not set in stone. As your business evolves, so should your KPIs. Review them regularly. Every quarter or every year, check if they are still relevant.
Has a goal changed? Adjust the KPI.
Has the market shifted? Update it. Adaptable KPIs keep you responsive to change. Your business is dynamic—your KPIs should be, too.
KPI Ideas for Family Businesses
Need ideas for KPIs? Here are a few to consider:
- Gross Profit Margin – Shows your profitability after direct cost of sales.
- Customer Retention Rate – Loyal customers are your backbone. Track them.
- Operating Cash Flow – Essential for understanding your cash movement.
- Employee Satisfaction – High satisfaction often means lower turnover.
- Sales Growth Rate – Tracks how fast your revenue is growing.
- Inventory Turnover – Ideal for businesses with physical goods. Shows how often stock is sold and replaced.
- Debt-to-Equity Ratio: A key financial health metric. Lower ratios indicate stability.
Each KPI tells a piece of the story. Together, they give you a roadmap for success. They show you what is working and what is not. They keep you accountable. And they keep you moving toward your goals.
In Conclusion
KPIs are a tool—a powerful one. They are not just numbers; they are a compass.
With the right KPIs, you have a way to measure success. You have a way to stay focused. And, most importantly, you have a way to ensure your business thrives for years to come. So, choose wisely, measure consistently, and watch your hard work pay off.
Thanks for reading…
by MHolland | Oct 4, 2024 | Business Tips, Selling Tips
I wrote the following blog in 2018. I think it is great for a re-visit. For those who have not read it, please enjoy…
You Cannot Increase Sales
Yes, that is true, you cannot increase sales. Go ahead, try it. You cannot increase sales or profit (or lose weight for that matter), in and of themselves.
Why? Because those 3 things – (1) sales, (2) profit, and (3) weight loss are all results. They are things you can measure, but not manage.
What you can do is manage your activities. You can manage (and measure) the activities that make up those 3 things.
For example, you can make sales calls. That’s an activity you can both measure and manage.
You can reduce expenses by renegotiating terms with suppliers. That will likely have the effect of increasing profit, all other things being equal.
You can eat less, and exercise more, that will likely have the effect of you losing weight.
I am driving this point home because the only controllable things in life are activities. We cannot pre-determine what the results of those activities will be…we can only measure those results.
The reason I am pounding this point home, is because businesspeople and salespeople often say, “I am going to increase sales”. Great intention, of course, yet that is not a controllable activity.
It is particularly challenging with sales because sales are made up of 3 things, not 1 thing.
The 3 Things That Make Up Sales
What are sales made up of? Customers buying goods and services? Yes, of course. So, let’s look a bit deeper. What are the 3 things (and only 3) that make up sales.
It plays out as a formula, and it goes like this:
- Number of active customers
X
- Number of times they buy from you (in accounting terms that would be transaction frequency)
X
- The average amount they spend with you per visit (person or online)
=
TOTAL SALES REVENUE
So, why is this important?
The One Thing People Focus On
It is important because when people say, “I am going to increase sales”, they almost always mean they are focussed on getting new customers.
Of course, getting new customers is a perfectly legitimate way of growing your business, and we need to all focus on that as businesspeople.
However, as you can see in the above formula it is only one way to grow your business. There are two more (3 more, but this blog is just focussed on the 3 ways to increase sales).
And we all know that getting new customers is the single most expensive way to grow your business.
The Second Part That Even Huge Businesses Miss
The 2nd way to grow your sales is to focus in on increasing the number of times your customers/clients do business with you.
Now, you will begin to see that as a strategy it is completely different than way #1 – increasing the number of customers in your business.
And as a different strategy, it will lead to different activities, which – as your goal and intention – lead to different results – increasing sales.
So, what could you do in your business to encourage people to come back more often?
Here are a couple of ideas:
- A quarterly newsletter talking about new products and/or services
- A loyalty card
- Phone calls, reaching out to connect with existing clients
This is where brainstorming with your Team can really create a massive list of fun, creative ideas. Then, take your list and prioritize and take on the top 3 to implement.
And remember this – what gets measured gets done.
Let me give you a real-life example of the 3rd idea above – making more calls to your clients.
A client of a colleague of mine (a business coach) complained that his business was growing at a snail’s pace. My friend coached him to do this one thing – block every Friday morning off to call his clients.
And do what, you may be thinking? Well, it wasn’t just to connect and talk about the weather.
What this professional service provider did, was simply ask rocket-science level questions, like, “how are things going in your business?”, and “what are the issues you are dealing with now this quarter?”
Those simple questions led to them talking about their problems to this person.
This professional service provider acted wisely He did not jump in immediately with solutions. He kept drilling down with impact-type questions, as in, “what is the impact on your business of that problem you just shared with me?”
This often led to his clients asking for him to take on some of these issues. This led to more work for the professional service provider.
What were the results? They shocked him. Sales doubled, and soon he moved into a bigger home to retire to.
And his clients were happy, as the professional services firm became more involved and solving chronic problems for his clients.
That simple activity of blocking time to call his clients and ask simple questions led to more work for the company.
And here is the kicker – do you think those clients felt more cared for, or less? Do you think that increased or decreased loyalty?
And this was an activity the business did rather than focusing on getting new clients.
Lastly, what do you think the cost of those new sales were? Higher or lower than going after new clients? Only the cost of his time to make a call.
The 3rd Part That McDonald’s Has Mastered
The 3rd way to increase sales is to increase the average sales value of each transaction.
I think we can all see that this, again, like way #2 is a completely different strategy than way #1.
What are some ways you can increase your average sale?
- Bundling – putting together a package of goods and services hat solves a total problem for the client/customer
- Scripting – just asking for the sale! (I will talk more about that below…)
- Asking questions
- Newsletters
- Price increase
Again, as in number 2 above, you will want to brainstorm ideas here with your Team and come up with 3 to put into practice right away. Measure your results.
Let us take a closer look at 2 of the above ideas. One is scripting, the famous McDonald’s “would you like fries with your burger?” is an obvious example. McDonald’s measure everything and that script has measurably increased sales and profits dramatically.
Another way to increase sales is to affect a price increase. I can hear many of you reading this saying, no way, I cannot do that without losing customers!
I hear that all the time, when I suggest businesses increase their prices. It goes something like this: “I cannot do that, Mark, because I am in a competitive industry and if I do that I will lose too many customers and scare off new ones too!”
Just last week, I met with a client whose production manager convinced the owner (who was an initial “no” to a price increase) to increase prices by 5%.
They did. Do you want to know how many customers they lost?
Zero. That’s right, zero. They have loyal customers who love their product (organic food supplements), and a 5% price increase was too small to have them leave.
The result was a direct increase to sales that fell right to the bottom line as an equivalent increase to profits!
It costs you nothing to implement a price increase…
Creating a Profit Improvement Plan
Ok, so now it is time to put it all together.
If you concentrate your energies on all 3 areas of your sales – increasing new customers, increasing the number of times they do business with you, and increasing the amount they spend per visit, you will have an amazing compound effect on your sales.
Try it out. Print out and fill in the blanks of this Profit Improvement Chart and see the impact of a 5% change in these 3 ways to grow your sales has on your bottom line.
| ESTIMATE YOUR PROFIT IMPROVEMENT POTENTIAL |
|
|
|
| Company Name: |
|
| Year Ending: |
|
| Date Created: |
|
| Components of Profit |
Present Position |
Change Factor |
Possible Position |
| Number of Active Customers |
|
5% |
|
| *multiply this by the average purchase frequency |
|
5% |
|
| Number of Sales Transactions |
|
|
|
| *multiply this by the average value of a sale |
$ |
5% |
$ |
| Total Sales Revenue |
$ |
|
$ |
| *multiply this by the gross margin |
% |
|
% |
| Total Gross Margin |
$ |
|
$ |
| *subtract the fixed overhead from this |
$ |
|
$ |
| Net Profit |
A $ |
|
B S |
| Profit Improvement Potential |
B-A |
|
$ |
You will be amazed…. thanks for reading!
by MHolland | Aug 30, 2024 | Business Tips, Selling Tips, Systems
The end never justifies the means.
The means are the end.
How you do one thing is how you do everything.
These are the simple secrets to a happy business.
I see businesspeople claim to endorse awesome service. They talk nice to strategic partners and customers.
Then they turn around and talk trash to their Team and suppliers.
No, if you want a happy business, you need to give happiness away in everything you do.
Here is the secret – it does not start with your customers.
That may be your end point – happy customers who refer and keep coming back.
Remember? The means are the end. The end does not justify the means.
Start with your family. Treat them like the diamonds in the rough that they are.
What? Your family? What the heck has that got to do with business?
Everything.
See the other cliché above – how you do one thing is how you do everything.
If that is too much to bear, start with your Team. They are the ones who are your real clients/customers.
They are serving your customers.
How you treat them is how they will treat your customers.
Money follows happiness.
A happy culture attracts customers. And they want an experience, not only a great product/service.
And because you are happy you discover that the means and the end are one. Because you are being happy before the end goal happens.
A colleague of mine, Ryan Lazanis has this to say about creating a successful business:
“I asked my LinkedIn network to fill in this blank last week:
The key to a great firm is _____.
I received dozens of answers:
- Streamlined processes.
- Standardized systems
- People
- Vision
- Checklists
- Communication
- Leadership
- Etc.
Want my answer?
Here it is:
Happy people.
This is the key to any great business.
We want the team to be happy (including you).
And we want your customers to be happy.
You cannot run a great business without this.
And “happy people” is the culmination of most of the things that my connections chimed in about.
Optimize the business for “happy people” and there is no way you can have a bad business.”
And now for my next topic…
Are News Feeds a Distraction, Or Worse An Addiction?
When you take a work-chill break do you scan through the news?
I admit I do. Until now.
Do you know what though? Before the Internet I used to read books voraciously. Classic books like the lives of Saints (Confessions of Saint Augustine, Saint John of the Cross, Dickens, Lord of the Rings).
Now most of my many Kindle books are about 10-15% read. I wonder why?
Could it be my attention span is lower now?
Possibly. I do have a laser focus at work, yet I am going back to having chill breaks by reading my Kindle.
Check out this Blog about news feed as an addiction.
Should Your Business Create a Niche?
Yes.
Create a niche and get rich, if not, life is a b^&%h.
Sorry, I am full of clever cliches today.
Too many businesspeople suffer from shiny object syndrome. They think the more they offer the more sales they can get.
Problem is that the more you offer the more problems you have, the more you lose your focus.
Okay, and here is my last cliché for the day. I promise.
He who is a jack of all trades is the master of none.
Here is a remarkably interesting fact for those of you thinking of taking the dive into creating a niche in your industry.
General Motors sells about 6.2 million cars per annum.
Ferrari sells about 13,200 cars per annum.
GM is valued at $55.3 billion.
Ferrari is valued at $88.45 billion.
I rest my case.
Thank you for reading…
