When times are uncertain, you need good friends and these are 5 of your best.
The 4 M’s and the P
Business owners are, by nature resilient people, you have to be. Market changes, suppliers, client needs and team dynamics all apply pressure and opportunities. On top of all that when there are exceptional demands, it’s easy to get swept away on a tide of uncertainty. Or to try and power your way through, in a blaze of activity, often without paying attention to the direction.
Activity is good but focussed activity is much better, how do you channel your activities?
Your 5 friends, the 4 M’s and the P will help.
A true friend is one who is there for you, when you need them, reliable through thick and thin. You need big P, Profit, to help against the pressures and with the opportunities.
But good as big P is they can’t do it on their own, so there’s the 4M team to back them up.
The first M is Management
Profits live in well managed companies that effectively use their business blueprint. The blueprint covers people development and training. It defines customer focus based on a current and clean database, real customer understanding and ensures you are easy to buy from. This is backed by a sound budget, very strong insight into financial performance and makes effective use of time and precious resources. The blueprint defines how and when to systemise the routine and in what situations people resolve the exceptions. Do your current systems, procedures and guidelines have the capability and capacity to deal with the demands of volatile situations? What needs to change? Are your great people led by great leaders? Do they and your blueprint make it crystal clear what your core values are and what behaviours are expected and those that won’t be tolerated?
Your second friend is money.
Money is your business oil, when it’s flowing and circulating everything runs smoothly, if it runs out or gets clogged up somewhere, then your business engine and Profits are going to go bang in several shades of bad. To prevent that happening you need to be auditing costs, setting budgets and ensuring everyone in the business understands why everything they do has an impact on the flow of money. Right now a big challenge for you is keeping margins at the right level. How are you managing cost rises? Are you trying to absorb them for your clients? Are you uncomfortable telling them price rises are coming? Are you making the tough choices when resources are scarce and keeping profitable longstanding relationships? Are you using time wisely to let less profitable business go and focus on clients that place real value on what you do and why? Discounts and giveaways harm your business. So replace them with packed value, be creative and innovative based on what your customers really want.
Say hello to Marketing
Marketing is your chatty friend, the one that always wants to meet new people and start a conversation. Which is perfect, however your chatty friend needs to be reminded and guided that the conversation is always about the other person. What their needs are, their problems, what would it mean to them if they solved that problem? Then you can ask, would it be OK if you showed them how easy it would be to solve that problem? And how easy for them it would be, solving it with you.
That customer-centric conversation is based on offering real value and giving them options where they choose to upsell or down sell themselves across the range of products and services you offer. Also give them the option of not only going up or down but crosswise as well. Cross position other products to enhance their primary purchase.
Accommodate their budgetary realities and make a customer for life. Stop trying to sell them what they can’t afford. In fact stop trying to sell them anything! Become their best and easiest solution to buy from.
Merchandise, your friend that delivers.
Getting a ‘helicopter’ view of your business merchandise is a valuable exercise because your products and services both define your business model and guide the direction of sales and revenue. Make sure you and your teams are clear about margins and which of your products and services generate the best Profits.
Any of us who has ever bought a printer knows that the upfront cost pails into insignificance compared to the cost of the cartridges. Where do the manufacturers build their recurring profit stream? From the consumables, what lessons can you take from that and apply to your business?
When you’re clear about what the fast selling and high margin products and services are for your clients, review your inventory and marketing. Free up the trapped money sitting in slow moving low margin stock. Market what makes you money. Build on that to sell exclusive services that others don’t offer, and what about private label offerings? Seldom will you go wrong providing quality to your target clients. A brand identified with quality products, services and care will generally deliver higher margins because people buy on value. Value comes gift-wrapped in the associations made, the community they feel part of and how that makes them feel.
Make them feel special to you.
