More Profits from Efficiency in Business

More Profits from Efficiency in Business

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More profits can come from efficiency in running a business. It is one of the pillars in building and sustaining a profitable company.

Managing Expenses means More Profits

It is important to know how money is being spent in the organization. Money can go down the drain in the form of wastage, including the waste of time of employees. Advertising and marketing are areas where money can be more carefully spent. Advertising and promotional gimmicks should be tested first on a sample of the market before rolling these out to the whole target market.

Direct response ads where you can measure the response rate of the market are preferable to the traditional image or institutional ads.

In general, corporations must carefully review how their money will be spent and whether and how much more profits these will generate, before releasing the money.

Increasing Profit Margins

Profit margin can be defined as the difference between the cost of producing a product or rendering a service versus the price at which the customer buys it, and after deducting sales, processing, delivery and other costs.

The greater number of unnecessary steps from generating the product or service to delivering it to the customer, the greater waste there is, and consequently the lesser the profit margin.

The company thus should be on the lookout to reduce, cut or totally not allow an expense whenever possible and within reason.

Taking Control of Time

Everyone has the same amount of time, and this time allocation cannot be increased by whatever means. Given this, it is critical that you are able to focus on the tasks that will give you more profits and the desired output.

You can do this by delegation, which also allows the people below you to learn to manage greater and more critical responsibilities.

Increasing your company’s competitiveness through your employees

Try calling the trunk line of a company to see how your call will be handled. The recipient of your call can either handle your call professionally or be at a loss in doing his job.  It is not easy to let go of staff that are unable or will not do their jobs well.

Thus hiring the right people and training them are critical to ensure your employees perform at their best level. This puts the company in a position where it gets the best value for the salaries that it pays and more profits.

Keeping your staff updated on new developments, products, methods of doing things will make them more competent and confident. They will then be more effective in dealing with your customers and doing their job overall. This, in turn, generates more business from customers who are satisfied.

Building Teamwork

It takes people working together in the form of a team to run a business and get more profits. No department or unit can run independently without the support of the others.

As a leader, your role is to get your people to work on solving problems, and in general making your company more responsive to the needs of your customers. Try holding regular meetings which consists of not just handing out information, but getting everybody to give their inputs to improve the business. You can invite a representative from each department, not necessarily the head of that department to brainstorm.

During brainstorming, encourage everyone to put their ideas on the table without the fear of having these shot down without a careful evaluation. After every idea is out, then go through each with the group and see which one can best solve the problem or contribute the greatest to more profits and improving the business.

By |8:04 am|Business Operation|Comments Off

Generate More Sales from Existing Customers

Generate More Sales From Existing Customers

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Aside from increasing your customer base, you can generate more sales if you can get your existing customers to buy more from you. You can do this without necessarily spending more. You can see how this works in the following pointers.

Generate more sales with value

Using this technique, companies can increase profits by as much as 30% without necessarily increasing costs. Companies employ 3 methods for this: , and

1) Upsell

Up-selling is getting the customer to increase the size or value of whatever he is buying. A restaurant can entice a customer to buy bottomless iced tea at a higher price instead of the one glass order only, for example. Or a car dealer can get the customer to buy the higher priced variant of a vehicle model.

 2) Cross-sell

Cross-selling means offering a complimentary product(s) to go with the initial purchase. Going by the same example of the restaurant, the order taker can offer side dishes or desserts to go with the main meal. When the customer agrees, then the value of his order increases with little effort on the part of the restaurant personnel, but with exponentially beneficial results.

3) Bundling of products or services

Bundling or packaging products or services requires putting these together and offering it as a package, with a corresponding discount. This can entice a customer to buy not just the basic item that he came for, but enable him to try out your other products and services as well.  By doing so, he enjoys greater benefits and pays a lesser price than if he were to buy the products or services individually.

Each of these techniques generate more sales and add to the total value of the sale without incurring additional advertising, marketing or acquisition expense.

Offer a wider range of products and services

Providing a wider range of products and services instead of just one or two, enables your customers to increase their satisfaction with your company, and locks them in so they no longer have a need to go to other providers to have their requirements met. When clients avail of more than one product, you are able to generate more sales from that customer without the extra effort of finding a new one.

If for some reason, you cannot offer as wide a range to satisfy your customer needs, then you can tie up with another company offering complementary, not competing products.

Increase the Frequency of Repeat Business

To generate more sales from the same customers, have them keep coming back to avail of your products or service. You can motivate your customer to buy again by regularly updating your products or services, offering something new, or in general offering exceptional service. Businesses rarely make significant amounts of money on the first sale, but they have a greater opportunity to increase profits with the succeeding sales of each customer.

Keep track of your customers’ profiles and buying habits

Knowing your customers’ profile (such as age, status, with children or not for example) and what they have bought in the past, can tell you what products they are likely to buy again and generate more sales.

You can keep these customers informed of your latest promotions or incentives for products they have shown interest in, or products they are likely to buy for the first time from you, given their profile.  You can thus advise them should you have new products to offer, or entice them with a discount or a token to try out a bestseller item of your company.

Extend the lifetime of each customer

This works especially well if your company enters into a contract to supply products or services for a year or a specified period of time. Ensuring that the contract is renewed year after year generate more sales as you save on the customer acquisition cost starting on the 2nd year of doing business.

By |8:42 am|Marketing Help|Comments Off