We will design and show you an integrated maketing strategy that will exponentially create increasing returns, by concentrating your efforts to make minor improvements in 5 areas of your business, the results will be the doubling of your profits every 90 days.
If you are in business you must at least break even, but we are sure that you want to do better than that, you want to make a profit. Perhaps your business is profitable (or not), but if it is profitable, we believe you want to learn how to steadily and even spectacularly increase your profit.
As you will learn, your role and responsibility as a business owner or manager is to increase your profits to the maximum, that way you will be able to innovate, grow your product line, buy more from suppliers, employ more people, and add to the quality of your clients’ lives.
As a business owner or manager, you are the engine that drives the well being of all those near and even far from you.
You have a business that offers goods or services online, offline, or brick and mortar.
What we are going to do is demonstrate how you can reach and go beyond your profit goals with offers of value to your clients optimizing your existing product or service line.
By changing your strategy, you can change your profit
Module One: The Answers You Must Have And What You Can Do
The Questions: All too often in businesses of all sizes from the one person home business to the multi national corporation, the greatest focus is on one line item: how much did we make? What’s left at the end of the week, the month, the year. How much can I put in my pocket. Important? Yes, but answering this question does not tell us much about how to increase profit.
There are two interrelated determinations, metrics, call them what you will, that must be at your finger tips, if you are going to understand your business: One is MARGIN, Two is BREAK EVEN.
I’ll stop here and let you ask yourself if you know, right now, what your Margin is and what your Break Even is.
If you know those answers, you are exceptional. Many, many business owners don’t know these answers and many don’t even think about the questions. But, if you don’t have these answers firmly in your mind at all times, and you have stayed in business, two things are almost certainly true: You are lucky and you have left a great deal of money on the table.
We’ll go into detail on the calculations, the mathematical details as we go forward, but let’s look at an example of why you want to know these figures for your business.
Optimize Your Profit
Remember, we are going to optimize your profits on your current book of business.
To show you the power of a 15% increase in price on even a low priced item, follow these numbers:
| ales Price |
$10 |
$11.50 |
| Units Sold |
$10,000 |
$10,000 |
| Revenue |
$100,000 |
$100,000 |
| Cost Of Goods Sold |
$50,000 |
$50,000 |
| Gross Margin |
$50,000 |
$65,000 |
| Overhead |
$15,000 |
$15,000 |
| Net profit |
$35,000 |
$50,000 |
By raising the price 15% (in this case a manageable $1.50) there is a 43% increase in net profit. Why?
Your costs do not increase but your MARGIN skyrockets. If you deal in higher priced goods or services the cash on cash increase is spectacular!
Great! But, what if the price increase hurts sales? You’re still ahead of the game. If your sales drop to 9000 units, you’re still ahead and you may have had more time to relax, plan and innovate.
But If you follow and implement Optimized Marketing Strategies, don’t look for a sales decrease.
Remember though, if you optimize your marketing, unit sales are unlikely to drop.
Exciting? Yes!
Danger signs: Margins Dropping or Expenses increasing as a percentage of sales. Be especially careful if sales volume is increasing when either or both are happening. If this is occurring, your business is increasing its sales all the way to business failure.
A big part of Optimized Marketing Strategies is to focus on how to market for profitability, not just increase sales.
Price? No!
Our experience (and maybe your experience at a cocktail party or your club) is that, as profits shrink, the crowd mentality thinks lower and lower prices.
Sorry if you’re offended, but if your answer is to lower prices to meet competition, you are probably lazy or simply haven’t done much in the way of innovating for a long time.
Even if you have what many call a “commodity product” or service with plenty of competition you probably don’t have the market power to drive your competitors out of business by continually lowering your price like a WalMart might (but might not) be able to do.
So what do you do? Optimize the value of your offer. Come to know your customer and serve their needs with value not price.
The example we went over was based on a 15% price increase. If you can’t raise your price 15%, raise it 5% or 10%.
Plug your numbers into the example or a similar model if you have one, and play with small increases in price keeping in mind that you must maintain costs to find the number or numbers you should apply to your price increase. Keep in mind that it is worth it to selectively increase price on this or these items to test your market’s reaction to increases and the amount of increases. If you have multiple locations or offices, you should increase prices varying amounts in varying locations to determine the optimum price points, then put them in effect across your organization.
Later on, we will work with you so that you can determine how to increase the value of your offer so that you never have to be the leader of a downward spiral of price and profitability in your corner of the market.
Don’t compete against yourself. Optimize Your Marketing Strategy!
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