How to make more profit is an everyday question, in small business at least. Money may not be everything in business, but profit is very important. I cannot state how important making more profit is, in words.
I shall introduce to you to questions you can ask in order to make more profit in your small business. I assume profit is that cute lady every guy just wants to say ‘hi’ to. I will teach you different skills to ask profit out on a date with your business as you follow me go.
You know that apart from those not-so-funny jokes, asking ‘them’ out requires some prying yet not too intrusive questions. Right?
So, let’s dig into salient questions you can ask at any stage in small business in order to make more profit. I have only ways to tell you about. And, here they come.
Make More Profit by Generating More Quality Leads
Small businesses get new customers mostly through referrals at the beginning. Friends, family members, church members, neighbours and people around us who believe in us sometimes are the first of users we attract to our business.
As small business grows, there will be need to make more profit. There will be need for sustainable and scalable means of generating leads that will become new customers.
Sometimes, number of leads being generated get business owners carried away. But, it is important to take note of quality of leads you are generating.
You attract sales qualified leads by targeting relevant audience in the first place. Quality leads, called them sales qualified leads, helps you make more profit, not just many many leads.
Small business that contracts advertising agency, digital or traditional, needs to be careful with this. During creation of awareness, advertisers care more about popularity of the advertising medium or platform at the expense of quality or relevance of the leads to the business.
For instance, we run a digital marketing training school and our facilitators work in our sister digital marketing agency. Despite we are both into digital marketing, we at the training school cannot adopt our sister agency’s strategy for generating new leads, if we do not want to waste funds.
Our target audience mainly are middle-upper working class people, small business owners and fresh graduates or someone who wants to change career. These set of people cannot give the same value they will give us to our sister digital marketing agency.
So, why should the agency target same audience we do?
While CMO’s and CEO’s of big corporates maybe part of their primary target audience, they are part of our secondary target audience because they may approve training for their staff but most of them may not be in dire need of digital marketing training.
So, in order to grow your business, ask yourself if you are generating enough number of sales qualified leads and not ‘anyhow’ leads.
If you are targeting more audience with more brand awareness in order to make more profit, ensure you are communicating with those who can patronize you. Choose your advertising channel with this in mind as well.
Lead Generation Strategy to Make More Profit
DIgital Display Advertising
Pay per click advertising
Email marketing campaign
Use Digital Display ad to Generate More Leads.
This is more biased towards brand marketing, if well complemented with PPC ad, Display ad will do some magic to generate more quality leads for your small business.
Digital Display ad is great for maintaining top of the mind awareness. Ability to re-target with display ad makes up for its shortfall in CTR.
The truth is you may be frustrated if you invest heavily in Digital Display ad in order to get target audience to convert immediately. Low CTR that Display ads record globally means you should add something extra to it, in order to get conversion.
Having said that, re-targeting is icing on the cake for Display Ad with which you can make more profit. You can set up your Display ad to follow your prospects about.
Make More Profit Generating Leads with Pay per Click ad
PPC ads have relatively better CTR, so you can trust them to get you more leads which you may nurture via email marketing over time till they become leads.
Let’s say you have banner ad on Bellanaija for one month. You may want to follow up with PPC ad for another two months. Why?
Someone who saw your banner earlier on Bellanaija may visit Google to search for what she saw but did not take action on.
For PPC ad to deliver the golden goodies, you must do effective keyword research. I don’t mean sprinkling some random search terms you guessed into Google AdWord Keyword Planner and export what you get.
Learn effective keyword research techniques in order to achieve better performance with your PPC campaign.
Make More Profit Using email to Generate Quality Leads.
Email marketing? We have over flogged it. Read up HERE. Email Marketing: Doing it The Right Way
How Can I Make More Profit Converting More Leads?
Converting more leads to customers is a big deal, especially when lots of money has gone into creating brand awareness and many prospects are beginning to show interests.
You know what conversion optimization is?
I won’t quote any ‘vocabulary’ or quotable quote in order to take conversion optimization seriously. You will will find out for yourself shortly.
What is the essence of massive lead generation that does not help you make more profit? Optimizing your marketing funnel helps you block leakages that may make you lose potential customers.
A lot of reasons make small businesses lose potential customers. Something as ‘trivial’ as user experience of a website, can make leads fall of your marketing funnel.
User experience in this context comprises site speed, UX, navigation, site search bar and many more. These things can easily get someone new to your business tired of finding what they need.
To cap it all, long and not-so-well-defined marketing funnel can drop leads off. This happens like all the time.
When the process of buying from you involves a lot of back and forth, check yourself. You may be losing so much that you cannot imagine.
Check your monthly traffic, landing web pages versus exit pages, to find out what is getting prospects lost in the buying process.
Besides conversion optimization, consider reasonable incentive or referral programs. Customers like deals, it makes them feel special. If there is discount for them and the person they refer, they will do more than you expect for you.
Make More Profit Selling More to Existing Customers
How to sell more to existing customers sounds like a commonplace question. But selling more of what existing customers are already buying can save a business during cash draught, especially.
There are many angles to selling more to existing customers. You need to be open-minded towards it in the first place.
It is easy to say customers are buying what they need or what they can afford at the moment. Who says an existing customer can’t buy twice this month what he bought last month?
Let’s look at how to make existing customer double their existing order.
To make this a bit easier, there must good relationship with regular customers. You must seen through your monthly or weekly reports, who buys more regularly. You must have been keeping in touch.
If you have not been keeping in touch with your loyal customer.
Receive the grace to do so now. TAKE IT!
Assuming you call these regular customers regularly, you can as if you want some feedback. Ask how they are using your product or service.
Question to ask to sell more to existing customers:
Do they share the product with someone? Can you talk the person?
Do they have friends or relatives that use alternative products?
What if you do free shipping for new order that week?
You are lowering prices for old customers, how many will they buy if they get ‘x’ amount of discount?
Incentive. Incentive. Incentive.
For someone who buys something regularly, incentive can make him more. Regular patronage means value is being obtained. Ride on that by offering mouth-watering incentive.
For customers who have not bought for a long time, reach out to them. If you send email and they don’t reply. Call them. Offer something to show you really miss them.
This will make old customers feel you value them.
How Do I Increase Profit Margin?
Increasing your profit margin has to do with re-negotiating your costs. You increase profit margin by either reducing how much it costs to produce and deliver goods or increase how much you sell.
Sitting down to re-negotiating should not cause you to panic. Some businesses enter this phase with crippling fear that their business is about to die. I have heard a couple of business people share how re-negotiating their costs helped them thrive.
Some businesses even arrive at a new product or strategy that ended up re-positioning them in their markets during this phase.
Questions to ask to increase profit margin
Will increase in price be fair on customers and will be not give competitors advantage over us?
Can we reduce cost of production without watering down quality?
Can we outsource some services we pay for but do not maximize?
Do we have consultants we pay so much with less value?
Can we ask for price slash from vendors we buy so much from?
Can we deliver at a cheaper rate?
What new features will commensurate with price increase?
Do we spend too much on conventional advertising or marketing?
Can we try some growth hacking techniques?
Do we have relationships we milk for more profit?
What resources can we share instead of buying?
You know one funny truth?
We spend so much time, effort and money on what we shouldn’t do in the first place.
Check whether you are guilty of this.
Make More Profit by Reducing Customer Acquisition Cost
How much it costs to recruit new customers can be quite high and become unsustainable.
Some small businesses cannot even state clearly how much it costs them to acquire get new customers to buy from them. Re-structure your marketing funnel to be able to know how each customer costs you to take them from merely interested visitors to paying customers.
When the cost of acquiring new customers, at least on the average is clear, you can look at where within the customer acquisition process you can spend less money on and still get results.
Questions to Ask to Reduce Customer Acquisition Cost:
Is current lead generation approach becoming unaffordable?
Are we losing too many leads within the funnel?
Should we stop Cash-on-Delivery, if you do it?
Are too many customers owing us, how can we recover bad debts?
How can we prolong customer Lifetime Value (LTV)?
Can we pay existing customers to refer new ones?
If you can arrive at cheaper effective ways to reduce cost of acquiring new customers, you will make more profit regardless of whether your sales volume and production cost remains the same.
Another question I almost forgot to add.
Ask your employees how you can make more profit. Sometimes, employees have ideas that can transform your business, if you listen to them and work with them on their ideas.
Wish you more sales, more profits in your small business journey.
Till our paths cross again. Cheers!