New Concept In Acquiring Customers
As a business owner, you purchase many things, including computers, phone systems, desks, tables, decorative things for the business atmosphere, ink, pens, paper, customers…
When I first heard the phrase Buying Customers, coined by Brad Sugars, Founder of ActionCOACH, a worldwide business-coaching firm, I had an image of a barcode on the back of someone’s scanned head…oh, wait. That’s the cover of his book on the topic; but, the point is buying customers is a new concept and one worth exploring. Otherwise, you’ll remain like most business owners, chasing customers, rather than taking some relatively simple steps toward exploding your bottom-line and seeing the profit you’ve hungered for.
In the end, it’s all about numbers. Numbers are the language of business. To understand the importance, necessity, and how-tos of buying customers, it’s important to understand what we call “The 5 Ways,” a formulated system that ensures increased profits.
Traditionally, profit was defined in one simple formula:
Revenues – Expenses = Profit.
I’d be willing to bet that most business owners still have that formula as their “go to” for calculating profits, but “The 5 Ways” shows how you can multiply your profit based on 5 key “drivers” that are part of all businesses…even yours. These include:
* Generating Leads
* Converting Leads Into Customers
* Repeat Customer Business
* Average Dollar Sale
* Profit Margins
So, what’s this formula?
(1) Leads x (2) Conversion Rates = CUSTOMERS x (3) Number of Transactions x (4) Average Dollar Sale = Revenue x (5) Margins = PROFIT.
Let’s break it down step-by-step:
(1) Lead Generation: Number of prospects that have been in touch with your business over a given period of time.
(2) Conversion: Number of leads that actually purchased from you.
(3) Transactions: Total number of transactions (the number of times they buy from you) over the course of a year.
(4) Average Dollar Sale: The measurable average amount your customers spend every time they purchase.
(5) Profit Margin: The percentage of each and every sale that is profit (You sell something for $200, your expenses are $75. Your profit is $125.) If you divide your profit by your revenue – $75/$200, you’ll have your profit margin results.
Most business owners drop prices to try to make a profit. That’s like going backwards and calling it forward. Instead, look at each of “The 5 Ways” in the formula, and increase those 5 factors by a mere 10%.
The result is a 46% increase in revenue and a massive 61% profit on your bottom line.
Granted, there’s a lot more to buying customers than the formula above, and that’s where a business coach can help you generate lifetime value customers, show you how to increase your customer conversion rates, and help you through your transition to this new way of thinking and doing business.
There’s no time like the present to get started. Let me know how it works for you.
Peter Williamson, Business Coach and Master Licensee, helps you find instant and lasting solutions to boost your profits by 61% or more – guaranteed. Email firstname.lastname@example.org For advice and access to proven systems that will advance your business, visit http://www.actioncoachcalteam.com/ andhttp://actioncalteamblog.com
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