In the first blog post in this series, Ratcheting Up Your Revenue (Part 1): Power Strategies Every Smart Entrepreneur Needs to Know, we covered an overview of the only strategies a business can use to boost its revenue. Click here to read that post
Of the three “revenue ratchet” strategies, the first one, “getting more and better clients and referrals,” is the most obvious and commonly attempted. Notably, this is the strategy that requires the most time, effort, and money to succeed.
For these reasons, we’re going to take a different approach and focus on a less costly but highly effective revenue ratchet strategy: Enticing buyers to keep coming back for more.
If you want buyers to keep coming back for more, you must make it easy and compelling for them to buy more often.
To do that, you have to make them feel good about coming back again and again. You must make it easy and worthwhile for them to do so. Common sense, right?
Recently, my business partner, Dan, experienced quite the opposite. Dan spends his summers in Pennsylvania and his winters in Georgia. His cable and internet provider in Georgia is Mediacom.
Dan left for the summer to go to Pennsylvania. Unfortunately, a family health crisis arose, which required him to return to Georgia about a month later. He called MediaCom to restart his cable and Internet service. That’s when he learned that their policy states that if you cancel service and then reinstate within three months, you must pay an extra charge of approximately $30-$40 a month.
For subscribers who need to suspend their service for extended periods, Mediacom does not offer an option that allows you to place your subscription on “vacation mode” for a small fee to maintain it, and then resume your subscription upon return. Ostensibly, the policy is designed to prevent people from switching back and forth between subscription plans to get the next introductory special deal.
Dan went to the MediaCom office to explain the situation – that he had returned for a family medical situation – and that it was clearly unexpected. He thought that once they understood that it was due to a family health crisis (not him trying to cheat the system for a lower rate), they would make an exception and wave the extra monthly fee.
Understandably, this really irritated Dan. Therefore, he did something that he had been threatening to do for a couple of years, but never had the impetus to do so because it was just easier to keep stopping and starting his service with MediaCom: he did some research and bought a Roku device for $50.
For $26 a month, he gets all the channels that he wants. Effectively, he cut his cable bill by $75 a month.
Now he owes MediaCom a big “thank you” because he would not have changed companies, except for the fact that MediaCom absolutely ticked him off by hammering him with that extra charge.
Clearly, this policy is a great way not to keep customers coming back for more. In the end, they lost a customer, worth over $100 per month.
In addition, Dan and partner, Martha, readily share this story about Mediacom to family, friends, and colleagues. In fact, one person they know of is doing exactly what Dan did: cancelling their MediaCom subscription and getting a Roku. So now, Mediacom has lost over $200 per month in revenue.
Mediacom’s shortsighted policy and lousy customer service make it difficult, inconvenient, and costly for customers to keep buying from them more often. Their practices directly feed customers to their competitors.
Answer These Three Questions to Entice Your Buyers to Buy More Often:
1. What can you do today to enhance the performance of your products and services?
2. What can you do today to make it easier and more appealing to your buyers to use your products and services?
3. What can you do today to show your clients, customers, and patients that you care and that you value their business?
Start by answering these questions for yourself. And if you really want to turbocharge your results, go out and ask your buyers these very questions.
Listen to what your buyers have to say and then show them you care by incorporating their feedback into your products and services. By doing so, you’ll be well on your way to cultivating customer loyalty and enticing them to keep coming back for more.
In Part 3 of this series, we’ll cover tips and ideas on how to entice buyers to buy more from you each time they buy. Stay tuned.
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!
Ever trying walking up stairs with just one leg? (Okay, I’m going to assume you are not a single amputee; if you are, then you already totally get the message I’m trying to convey here).
Here’s a simple exercise that illustrates the point I want to make:
- Get up from your chair right now and walk to the nearest set of stairs.
- Now walk up the stairs, say 10 steps or so, then turn around and walk back down.
No big deal, right?
Now, lift your left foot so that your heel is nearly touching your buttocks and you are standing and balancing totally on your right foot.Okay, round 2:
- While maintaining your balance, hop up the stairs as far as you can go (without hurting yourself!)
Totally different experience, almost ludicrous, isn’t it?
But you know, this isn’t much different from how many entrepreneurs attempt to build their businesses:
They focus so heavily on getting more clients, customers, and fans that they avoid keeping track of how much money they are bringing in and spending.
Many of you have heard me refer to my colleague, Joan Sotkin, who wrote a book called Build Your Money Muscles. I’ve read it, applied it, and recommend it highly. But let’s get back to your exercise of walking up the stairs with two, then one leg.
You see, muscle is composed of fast-twitch and slow-twitch fibers. When you walked up the stairs in exercise #1, your slow-twitch fibers were firing. If you sprinted up the stairs, your fast-twitch fibers would have kicked in. Both are important to use and develop. In exercise #2, you only had the benefit of the slow-twitch muscle fibers in only one leg, so you had less than half the power.
Similarly, there are two types of “money muscles” that every entrepreneur must train and develop:
1) Money-making muscles
2) Money-managing muscles
Let’s talk about “money-making muscles” first.
Making money is one of those urgent things that get in your face. It’s exciting and there are lots of training programs out there on how to make money faster, easier, with less work. (Heck, I just finished giving away my $600 program on “rapid revenue acceleration” for free to almost 300 entrepreneurs.) The prospect of making money with more intelligence and proficiency is alluring. It’s almost a “no-brainer” for us to continue working on our money-making muscles.
Now let’s address your “money-managing muscles.”
We all know managing our money is important, and yet this essential practice often gets overshadowed by the “instant gratification” of money-making tactics.
Have you heard the saying, “The universe will only give you as much money as you can handle?” Said differently, the universe will not give you more money than you can manage. I’ve seen the truth of that first-hand, repeatedly!
Therefore, if you are going to make more money (on a consistent basis), you must build your “money-managing muscles” and become an excellent money manager.
But Do I Really Have To?
Here’s the thing: When we lack confidence and comfort in managing money, we subconsciously (and consciously) won’t feel strong and capable of making more money.
The resulting self-doubt erodes the quality, quantity, and focus of the actions we must take to make more money, as well as the consistency and accuracy of how we manage it.
So yes, you really have to! Just like getting up a flight of stairs is easier using two legs, both making money and managing money are inextricably tied. It’s the yin/yang balance that’s needed in every business.
If you’re ready to start building your “money-managing muscles,” I invite you to join my business partner, Dan Bowser, and I in a conversation and exploration of what it takes to build your money management skills and habits.
We’ll share our collective experience of working with micro-businesses, multi-million dollar companies, and Fortune 50 giants. And we’ll help you get pointed in the right direction with your own business money managing systems and best practices.
Remember, few very entrepreneurs are doing this well or at all. This is your chance to strengthen your core, so both of your legs are available as you climb the stairs of success.
Register below and start building both sets of your “money muscles:” Money-making AND money-managing.