3 Business Challenges for Small Business Owners – The PROFITABLE Approach

Three of the biggest business challenges for small to medium enterprises (SMEs) are 1) cash flow, 2) access to resources and expertise in this fast paced and dynamic market. The third challenge is 3) scalability and how to grow the business in a structured planned way.

Freelance and project-based contractor approaches are becoming more widely used as the market shifts away from the traditional employee model. The need to access specific skillsets, often for a short period of time, is driving a more dynamic strategy to staff and resourcing.

In a very competitive and commoditised environment the cost of employment can prove prohibitive to scale and growth for SMEs. Recruitment fees, poor-fit staff, superannuation, and additional staffing overheads all contribute to operational costs, and impact actual net profit.

In order to solve complex challenges, we believe that a project-based model that is cross-functional can provide a pathway to achieving business outcomes, while working from the same client value set and beliefs.

We acknowledge that the traditional consulting model relies on a top-heavy assessment and recommendation approach that can prove costly for SMEs, so we function to deliver specific outcomes through tight scoping and a shared risk model. This offers access to and collaboration with a team of globally experience senior executives from the CxO management level.

As the end of financial year approaches, we know internal resources are limited. A locally delivered augmented strategic or tactical project can help to ensure that day to day challenges, as well as critical issues, are addressed and resolved. Whether you need resources in IT, HR, marketing, sales or finance and operations, we can customise a consulting engagement that suits your desired outcome using a shared risk value proposition.

For an initial obligation free consultation on how our independent advisory services can assist with a low cost approach, please visit www.alchemiseconsulting.com or contact us via info@alchemiseconsulting.com or call +61 39225 5022 to speak with one of our senior consultants.

How sales and marketing alignment can increase your revenue by 208%

Alchemise Consulting recently was interviewed by Thirst Creative on How Sales and Marketing alignment can increase your revenue by 208%.

‘The digital and online world has changed the way prospective buyers engage with your brand to be more personalised and direct. Hence the marketing funnel has deepened and so has most of the buying cycle before sales engage. Meaning sales now engage much later in the sales process.’ – Chak Ng, Managing Director of Alchemise Consulting

Please see the article writeup and also as a guest speaker at the “If you build it, will the come” event hosted by Thirst Creative here.

Sales and Marketing as a Service

 

How to increase your business gross profits using the 7 profit multipliers way

Business gross profits is usually the key indicator of performance and new business development activities and sales.

It is a sad truth that 80% of businesses fail in their first five years of operation, and one 1 in 25 will survive their first ten years.

The main reason is because they don’t have enough customers buying from them regularly – they simply run out of cash.

  • They don’t attract a sufficient number of qualified prospects;
  • They fail to convert their prospects into profitable customers;
  • They let their current customers slip away to do business with their competitors.

So, the only way to succeed in business is for the owner to have a clear understanding of the market for its products and services.

  1. Lead Generation – Getting more qualified leads

Before a person becomes a customer, they are merely a name, a lead. A customer is someone who has made an actual purchase. A lead in merely a potential customer. A prospect. The more leads or prospects you have, the more you can convert into paying customers.

How do you get more prospects?

There are many methods:

  • Advertisements
  • Direct mail campaign
  • Referral program
  • Internet marketing
  • Promotional techniques
  • Joint venture arrangements, and many, many more.

Because the choices for finding more prospects are many — and not all created equal — choosing the correct ones becomes a prime area of concern.

  1. Improving Conversion Rate – Turning more prospects into customers 

This means a higher percentage of sales based on people served. For example, if a company were averaging 20 sales per 100 people contacted, a worthy goal would be to increase sales to 35 or 50 per 100 prospects.

There are ways to make this happen: Improved telemarketing scripts, more attractive offers, testing different prices, improving quality, and more.

  1. Increasing Average Sale Value – Creating repeat customers

One of the Holy Grails of marketing excellence is the repeat sale – or more specifically, creating repeat customers who come back to buy again and again. Far too many businesses ignore this simple-to implement, common sense strategy to boost profits.

Repeat sales are sometimes called “back-end” sales. For many companies, sales on the back-end are where the true profits are made. For many companies, first sales may generate little or no profit, or even a small loss. This is sometimes called a “loss leader.” It’s a low-profit sale designed with an eye on making real money on the second and third sales. But whether one makes a profit on the first sale, or not, getting more sales after a first is a major key to higher success in marketing and selling.

  1. Increasing Gross Profit Margin – Getting the most out of every transaction

It takes a certain amount of time and effort to make each sale. Why not squeeze more out that transaction while the customer is in the process of buying? It’s easily done. For example, if a customer buys a shirt, he may also buy a tie at the same time – but the customer is far more likely to do so if actively prompted by the seller. Suggesting an additional sale at point of purchase is called ‘Cross-Selling’. A cousin of Cross-Selling is ‘Up-Selling’. An example: “You can get the larger soft drink for just 25 cents more. It’s a better value.” The idea is to prompt the customer to buy a larger size, amount, etc.

Profits can be increased with each sale by manipulating packaging, whereby the customer pays slightly more but gets an item of extra value.

The small amount of extra profit obtained from each sale represents a higher level of profit because no extra money needs to be spent on marketing. Even in packaging deals where premium products are given away, special deals from wholesale suppliers can make the extra giveaway items well worth the cost because of increased overall sales and mark-ups.

  1. Increasing the Number of Purchases – Create a lasting relationship

When customers buy an initial product from a company, and that products delivers value, benefits, and enjoyment to the purchaser, a good company should feel obligated to sell that person more, to improve that customer’s life even more. If a company is proud of the products it sells and the customer agrees that the company delivers high quality, all sides win if more purchases are made.

What if the company has no additional products to sell a customer who has been sold once? The obvious answer is that efforts should be made to obtain second-tier products. But if this is not immediately feasible, the original seller can refer the customer to another non-competing company who may have something the customer can use. Why make the effort? What’s in it for the original seller? Among other reasons, it’s a terrific opportunity to build good will with a future potential joint venture partner. The second business may often return the favor and send new customer back to the original seller. Finally, an arrangement can be made so that a commission or profit share is provided.

  1. Increasing Lifetime Value – Know what each customer is worth to you

In knowing the ‘lifetime value’ of your customers tells you scientifically how much you can spend to acquire new customers.

What is the ‘Lifetime Value’ of a customer?

‘Lifetime Value’ is the true Total Worth of a customer to you.
To maximise your customers’ lifetime value, consider the following contributing factors:

  • Average purchase value
  • Average number of times they buy in a year
  • Average number of years they remain your customer
  • The monetary value of their referrals.

Knowing this customer value can not only help you better understand and achieve sales and revenue targets; knowing this value can also help you to strategically structure your marketing budget.

  1. More Referrals from Customers – Leverage the power of your customers

As much as 90 percent of new business comes through referrals of new customers made by existing customers. Providing extra value, referrals cost next to nothing. Referrals are powerful because it’s an endorsement of a product from a trusted source – a friend, colleague, or acquaintance – not a advertisement which has been specifically constructed to make you think or feel a certain way about a product or service.

Consider how businesses can ‘distribute’ their brand:

  • Single Channel of distribution – Most businesses typically rely on one method of generating income from direct sales and hence time versus effort is the limited factor to achieving massive results.
  • Multiple Channels of distribution – This provides instant leverage and multiple income streams to boost sales revenue and profitability from a lower cost base exponentially than linearly.

Based on limited resources and investment in overheads this is far more effective to select complimentary channels to help grow your business. With every referral obtained the growth potential is increased by the number of channels who are active.

Summary

Increasing just one of these profit multipliers will help your business to grow organically with existing clients and help acquire new clients.

Increasing all of these multipliers by just a small margin will exponentially skyrocket your bottom line profits and should be considered as part of your sales strategy.

To have a further discussion about improving your business’ sales profits, and to better understand how to implement these strategies effectively, please contact us for an obligation-free conversation or register for our FREE business growth assessment.

http://bit.ly/2ndtwXt

Sales Growth Tip #1: Back-Ending – A Simple Strategy That Provides Fast Returns

If you have a nice back-end, you’re going to make a lot of money in sales. No, I’m not talking about that back-end! I’m talking about a selling strategy that you simply must adopt right now – the very survival of your business may depend on it.

What is back-ending? Simply this: It means having a second, third, maybe even a fourth product ready to sell right after you make the first sale. This is the way real money is made in sales, and sometimes, it is the only way a true profit is made.

Amazingly, many businesses don’t do this.

Finding first-time customers is expensive. You have to advertise, send direct mail pieces, pay sales people salaries or commissions, bear the cost of telemarketing and more. Then tack on your other overhead costs, such as labor, raw materials, or what you pay wholesale for your retail sale items. Then calculate the time, agony and effort in getting that customer to put trust in your service or product – only to sell to them just once. What a waste!

Add it all up and each customer you attract and sell can cost as much or more than the profit you make from each sale.

The solution is to make additional sales to each customers you have already bought and paid for with your marketing efforts. Each time you sell more to that customer, it frees you from the need to pay more to find a new customer — although you still need to keep doing that on an ongoing basis.

But the point is, once you have a customer, you need to maximize the opportunities because you have expended a lot of resources to find that person in the first place.

Successful back-ending means careful planning. It means having additional products ready to go and available at the time of the first sale. Back-ending works best when you try to make that second or third sale right away, and not two weeks later when the customer has already cooled off, or even maybe forgotten about you.

If you sells shoes, also be ready to sell shoe polish, and maybe a pair of socks. If you sell a shirt, sell a tie, or several ties. If you sell bicycles, sell as many accessories as you can – water bottles, pumps, biking gear, such as shoes, gloves, caps and more. If you sell computers, sell software and an extended warranty.

Back-ending provides a higher average sales profit margin per customer.

It’s really a simple concept to make back-end sales, but it’s amazing how many businesses never do it. Even if you’re satisfied with the profits you’re making on your first sale right now, and you don’t think you need a second-tier product, think about how much potential income you’re letting pass by, possibly to go into your competitors pockets.

Back ending is the method to continually garnering continuing profits from the customers that you have spent so much money acquiring and worked so hard to get.

So take care of your back-end, and it will take care of you.

New Years Resolution: Want to increase your sales profits in 2015

Welcome back from holidays! Now that 2014 has finished and 2015 has started, it’s time to reflect on how your business and sales performance went last year and what you could have done better, differently or change to create better value and apply innovation to acquire more profitable customers.

What happened in 2014?

The end of another year has passed very quickly and all of a sudden amongst the running around in December, the Christmas holiday season began. Now that holidays and your brief recharge are coming to an end, it’s time to refocus on your business goals for 2015 and what success you want to achieve.

Was it a challenging year for business in 2014 or did you feel like you could have achieved more with a little boost or luck? The first half of the financial year has finished and the second half is about to start and the clock is running already. Sales performance may not be where you would like it to be from last year. It’s the ideal time to review past performance, review strategies and action plans, adjust resourcing and put in the plans for a strong second half of the financial year. All businesses want to hit those targets they are aiming for and for those who are open to engaging independent assistance where required, they will be able to accelerate their business outcomes.

As we reflect, we hear that the economy and market (no matter which industry sector) is getting tougher year after year and also budgets your customers have aren’t increasing greatly. We know it’s about doing more for less and customer expectations are higher than ever before with less resources available and who want more value. So how can you grow your sales without significant investment and add more value to your clients?

Your competition is becoming more differentiated by offering superior products and services or and from different channels such as online or offshore partnerships to attract more business.

As the business owner, director or management team responsible for driving the business forward with gaining new clients in this current competitive world and attempting to accelerate growth what can you do differently in terms of innovation and adding more value in 2015?

The common business challenges of 2014

Common challenges and quotes from clients during 2014 were:

  • My existing customers were not spending much last year or transacting regularly and I am not winning much new business, so how do I generate more sales and profit?
  • I didn’t achieve a great Return on Investment from the marketing & advertising we spent money on, so do I hire another sales person?
  • How did we manage to lose one of our best long standing client accounts who went to the competition and 50% of our revenue base?
  • We always had to reduce our price to win the deal, but made little profit on the sale. It doesn’t make business sense to keep competing on price.
  • I don’t know have true visibility if there is a revenue or profit leakage anywhere from our sales team and management?
  • We spent over 3 months searching and couldn’t find the right experienced account manager or business development manager through multiple recruiters and through our network. Lost selling and client facing time is lost opportunity cost to the competition and lost sales revenue and profit to someone else.

If these are the types of questions and challenges you are reflecting on and want to address these in 2015, then we highly recommend that you might need an independent perspective looking into your business development, sales & marketing methods and systems with an independent business growth assessment.

Often when we are time pressed, many aspects of sales planning and business growth gets less prioritized whilst in a reactive “day to day” operational and “fire fighting” mode and running between client meetings.

To start the new year effectively whilst in a more relaxed planning and a reflective mood, take the time to take stock of last years performance and understand the gaps in the sales & marketing systems. This may mean a 50% to 100% increase in profit potential upon deeper identification of the sales challenges and alternative actions which can be taken to help achieve the annual target expectation. What would this mean sort of increase mean to your business in real terms? A fresh set of eyes and independent expertise may help uncover some of the “obvious” problem areas in more detail.

How can I improve my business sales performance in 2015?

An independent business growth assessment will help to review, understand and identify gaps in areas such as:

  • Your business and sales performance capability
  • To quantify each area of direct and indirect sales lead generation effectiveness,
  • To validate direct and indirect sales transaction value,
  • To determine client lifetime value, partner referral effectiveness and understand your sales conversion ratio,
  • To review your Unique Selling Proposition and marketing messages.
  • To assess customer CRM database utilization and optimisation,
  • To review current marketing and advertising methods and determining true Sales & Marketing Investment ROI,
  • To measuring your online, web Sales & Marketing system effectiveness.

What can I do next? “Get all the Tools, Strategies and Systems YOU Need to give you a formidable and Competitive advantage in the Marketplace…”

If you want to overachieve your targets for this year 2015 and have been thinking about how to take your business to the next level, then this is the time to TAKE POSITIVE ACTION!

Find out how using proven, no cost and low cost methods can help you:

  • Drive several hungry customers to your business.
  • Craft and use powerful and irresistible marketing strategies to drive your sales through the roof
  • Counter competitor price cutting without reducing your margins
  • Uncover and profit from the hidden assets to be found in your business
  • Quickly, simply and effectively increase sales to your current customers by 10%, 35% or even 100% with no additional marketing costs.
  • Find, acquire, keep and motivate superstar salespeople and employees.
  • Live and enjoy greater success by rapidly building a highly profitable business that will run itself
  • Get and use testimonials to dramatically boost your sales
  • Double, triple even quadruple your sales conversion rate

For more information or fresh perspectives on cost effective ways to drive sales profit forward in 2015 please contact info@alchemiseconsulting.com.

We at Alchemise Consulting wish you every success in 2015!

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“Our business is to help your grow your business and maximise your sales profits”

Chak Ng- Director, brings over 17 years experience with strategic sales, business consulting, business development management and marketing expertise. He also has specific global experience within ICT and Telecoms markets with leading organisations such as Ericsson, IBM and Singtel-Optus. He is able to provide strong insights and innovative approaches in developing and implementing effective business growth strategies with sales models and systems dealing directly with business owners or key stakeholders.