Scores of fellow Freedompreneurs have shared with me that they need help finding more ideal clients and turning potential clients into paying clients.
If this sounds like you, you are certainly not alone. Over the years, I’ve noticed that many entrepreneurs, even big businesses that ought to know better, spend the majority of their time and effort on getting more clients, customers, and patients.
By itself, this is not a problem; it’s actually desirable, except for the rare business where they have more business than they can handle.
However, I’d like you to consider why you want and need to get more buyers: It’s to generate more sales and pile more cash into your bank account, right?
That being the case, why not focus on what you ultimately want – more cash in the bank – rather than solely on getting more buyers?
Along those lines, today’s blog post kicks off a mini-series in which we’ll explore strategies that go beyond simply getting more and better buyers. I call these “revenue ratchet” strategies.
For the duration of the series, you’ll find it useful to refer to this Revenue Ratchet Formula Memory Jogger.
Let’s walk through how this works:
If you tell me the number of clients and customers that you have in a given year, how much each customer buys each time they buy (the average size of each sale), and how often customers buy from you in a given year, I can predict your total revenue for the year, almost to the penny.
This is what I call the “Revenue Ratchet Formula”:
Said differently, your revenue equals the number of buyers you have, multiplied by the average size of each purchase, multiplied by the number of times each buyer makes a purchase, for a given period. It’s very straightforward.
In order to increase your revenue, you have to boost one or more of these three variables. This formula applies no matter what kind of business you have. Whether you’re a service business or you are a product-oriented business, a startup or a multimillion-dollar revenue enterprise, you can only influence revenue by changing one or more of these three variables. That’s it!
Considered collectively, the Revenue Ratchet Formula is a powerfully effective yet commonly overlooked approach to “ratcheting up your business’ revenue,” hence its name.
In subsequent blog posts, we’ll explore each of these three “revenue ratchet” variables and associated strategies in greater detail:
- The first strategy is to get more and better clients (and referrals); that means increasing the number of people who buy from you.
- The second strategy is to get them to buy more at one time; that means increasing the average purchase.
- The third strategy is to get them to buy more often; that means enticing buyers to keep coming back for more.
In the meantime, start expanding your mindset when it comes to increasing revenue beyond simply getting more buyers. Along with your efforts to get more and better buyers and referrals, also be thinking of ways to make it worthwhile for them to buy more from you each time they buy and for them to buy more frequently.
A couple of days ago, I was walking home from a nearby business meeting. As I stepped onto a sidewalk, I heard a teenaged girl who was walking behind me call out, “Excuse me, Mister?” Instinctively, I turned around and surveyed her facial expression and body language.
She was a petite girl, perhaps a life-hardened 18 or 19 years old. She seemed harmless but was clearly distressed.
She prefaced what she had to say with “I’m only 16 and I didn’t want to ask just anyone, so they didn’t take advantage of me.”
“Can you give me $.50 so I can take the bus home?”
She didn’t seem to be someone who was just putting on an act; instead, she seemed to be a young high school kid who had lived a hard life, not necessarily all of her own doing.
In a downtrodden tone of voice, she lamented, “Yeah, I don’t have enough money take the bus and I’ve got third-degree burns from being out in the sun all day.”
I noticed that her fair-skinned face was red and peeling throughout her cheeks. Unable to restrain myself, I instantly slid into doctor mode and said, “Well, those aren’t really third-degree burns, but they are pretty bad sunburns.”
She chuckled in embarrassed recognition of the obvious.
I pulled out my wallet, but since I didn’t have any change or small bills, I told her I would get change at the restaurant across the way. As she trailed behind me, she told me how grateful she was.
She seemed surprised and relieved when returned; in retrospect, she was probably afraid I was going to keep walking through the restaurant and out the side door!
I gave her the $.50. Then I wondered aloud, “Is that enough for the bus?” “No,” she optimistically replied, “It’s really $2.50, but I’m hoping the bus driver will let me ride anyway.”
So I said, “Here, take the other $.50.”
As I walked away, I heard her telling God to bless me.
I crossed a major street intersection still pondering this encounter. I wondered why she wasn’t in school. Maybe she was looking for work. Maybe she was running away from an abusive situation. I started making up all kinds of stories.
I wondered why she didn’t ask me for the full amount of the bus fare. If she had only asked, I would have given it to her.
This bothered me so much that I turned around and doubled back across the intersection to look for her. However, I could not find her; she had disappeared into the sea of cars in the crowded parking lot.
The lesson for all of us: Ask for what you need. You just might get it.
This girl asked for less than what she really needed. And that’s exactly what she got.
When I initially walked away after giving her a dollar in coins, I looked back and could see that she was scanning the parking lot, probably looking for who else she could ask for money.
For whatever reason, she was afraid to ask the full amount. Who knows, maybe she was afraid of being rejected. Chances are she was extremely embarrassed. Maybe she was afraid of being physically hurt.
You and I have been in this girl’s shoes before…
How many times has each of us been afraid to ask for what we really need?
And how many times have we gotten less than what we needed because that is all we felt we could ask for, because that is all we thought we could expect, or because that is all we believed we deserved?
When was the last time we experienced this? Today? Yesterday? Last week? Last month?
It’s an abundant universe.
Practice asking for what you need. Then be prepared to receive it!
Recently, I tried to write a series of emails for a project that my business partner and I had been working on.
Thinking I was going to be crafty and write a really good series the easy way, I modeled my first email after the format that a highly successful marketer used. You see, I had just finished going through his entire promotional sequence of emails and videos, and I was very impressed.
My business partner wrote back saying, “George, this email just doesn’t work for me. I see what you’re trying to do, but it’s off-putting.”
While he was concerned I’d be offended (I wasn’t), it was a great opportunity for a good laugh, and it reminded me of a couple of incidents where I wasn’t being myself…
Lessons about connecting with your audience by being yourself.
I had just come back from a training program on how to present and lead live workshops (Train the Trainer program); this was around 2003 or 2004.
I was practicing an introductory workshop that I was developing with my wife as an audience of one.
So I started my introduction, and two minutes into it she goes, “George, what are you doing?!?”
I said, “I’m practicing!”
She said, “No, no, no.
“You’re trying to be somebody else. You’re trying to be the guy who trained you at the Train the Trainer program. That guy cannot lead this program.
“You and only you can lead this program.
“You need to be you.”
So I got a little frustrated. I turned my back on her and regained my composure. Just took a few breaths.
I turned back around and then I started out the introduction being George.
And I didn’t expect this, but my wife broke into tears within the first 5 minutes. She got the impact of me introducing the program as me. It was powerful.
Curiously, at that very Train the Trainer program that I mentioned earlier, I was selected from the audience to come up on stage as an example.
I can’t remember exactly what the trainer asked me to speak about. But I started speaking about whatever topic it was, and he stopped me very shortly after I started. He said, “Hold on a minute.”
And he thumped me on my chest with a flat hand. Thump. Thump.
He said, “George, you’re a fit guy. “I want you to command that presence.
“Look out into this audience. (There were probably 250+ people.) “
And connect with everybody in this audience, be powerful, and project your energy to the back of the room.”
So after he pounded me on my chest, I started over, this time with a lot more energy, enthusiasm, conviction, and power.
Then he said, “Great job. That’s what I want!”
Everyone in the audience started clapping. And then I started walking off the stage.
I didn’t know this had happened, but several people in the audience were in tears.
I had them in tears. I had my wife in tears in a separate incident. So by then, you’d think I would have learned to be myself.
It’s so easy to forget this stuff!
Where in your life, particularly in your business interactions, have you attempted to be someone you’re not? And how did it go? Did it backfire?
Unless you’re a spy, mentally disturbed, or an accomplished actor, it’s a heck of a lot easier to influence and connect with others by being yourself—warts, blemishes, and all—than by attempting to cover up what you believe your shortcomings are by masquerading as someone else.
With rare exceptions, people can sense a fraud. Conversely, they can sense authenticity. Business success comes more naturally when you’re being authentic.
The next time it’s important for you to inspire and engage an audience of one or an audience of 1,000, which version of you do you want to show up? The real you? Or the fictitious you?
Many entrepreneurs suffer from EDD, or entrepreneurial deficit disorder, a malady in which they have big hearts but so many ideas and so many talents that they don’t know where to focus their efforts or how to choose the best strategies for their situation.
Here’s a real-life example from a recent experience of mine:
I’m helping one of my clients build his group coaching program. As part of this endeavor, I spoke directly with one of his test clients. I gave her advice on where to focus her gifts and talents. Later I heard a recording of a follow-up coaching session that my client did with her.
She was euphoric because I got her pointed in a direction that she’s super excited about; it’s one of her life’s passions. Great news, right? And it gets better: I heard her report that she was so excited that she went out and got several new clients. Starting from scratch, she generated approximately $3,500 in monthly revenue, catalyzed by our initial conversation.
Imagine how thrilled I was to hear this! Then she dropped a bomb: With unbridled enthusiasm, she reported that she had gotten her accountant to agree to train her in how to use QuickBooks. Instantaneously, I felt the blood drain from my face and my back slouch a little bit.
I flashed back to a moment years ago, when I happened be flipping through a book on business planning. I was curious to see the author’s advice for setting up a new business to be successful. In one of the early chapters, she wrote that one of the first things you should do is hire a graphic designer and create a logo for your new business. Bad advice. And this was a best-selling book.
You just don’t need a logo to generate business! (Despite generating a six-figure annualized revenue stream in 73 days, I didn’t have a logo for my business for at least the first couple of years.) Instead, you’d be far better off spending your time and money on getting clients, customers, and patients. A logo will not do that for you.
The same advice applies to my client’s test client: Instead of her spending time, money, and energy on learning a complex piece of software that was designed for financial professionals, she would be better served to focus on getting even more clients — and then delivering outstanding service and value.
When considering investing a significant amount of their time, energy, or money, I advise my clients to consider the following questions:
- Will this activity help me increase my revenue?
- Will this activity help me reduce my expenditures?
- Will this activity boost my cash flow?
- Will this activity boost my productivity?
If the answer is yes to at least one of these, and ideally more than one, I’m likely to recommend such an activity. But if the answer is no to all of these, it’s best to steer clear.
Real-life stories like these continue to drive me and my business partner, Dan Bowser, to create a cash-flow and money-management educational program for entrepreneurs. We’ve also been encouraged by many of you to develop a Web-based application, Business Cash Pulse. This tool is designed to present entrepreneurs with the financial numbers that matter. It’s designed to be simple enough that you don’t have to invest a lot of time, money, or energy into learning how to use the doggone thing; every minute you waste learning complex software is time and energy taken away from doing what you do best: serving clients, customers, and patients.
In the coming days and weeks, you’ll be hearing more about our holistic, whole-brain (no, not harebrained!) approach to making more money and keeping more of what you make. And you don’t have to be a financial expert to pull this off!