No Matter what kind of business your in from an attorney to a zoo we all want to make more Money Lets address the goal of increased profits and business. Consider that there are only 3 ways you can grow your business. You can Increase the number of clients, increase the average sale price, or increase the numberof times they buy in a year. Most people (90%) focus in on increasing the number of clients - and it is the least effective and the least profitable. So what can you do to increase the other two? You can increase profits by increasing prices. Suppose your gross profit on a service or product is 20 percent a 2 percent increase in price means that before profits would decrease there would have to be a 9 percent decline in sales.A 10 percent increase in price would not be offset in profit unless sales decreased by 33 percent!And an 18 percent increase would require a 47 percent decrease in salesbefore adverse effects would be felt. So if you lose business as a result of increasing prices it also means a decrease invariable costs (i.e. the costs of making doing business) as well. Then if you were to raiseprices 18 percent, knowing you would lose some customers, you could take that "hit"in lost sales up to 47 percent before feeling the pain and you might be ahead dependingon the variable costs involved. Some entrepreneurs try to boost sales by reducing price. This type of strategy can be a mistake. Using the example above. If prices were cut by 2 percent, there would have to be an 11 percent sales increase just to maintain a 20 percent profit.A 10 percent decrease would require a 100 percent sales increase! Beware the sales mentalities…think like a businessman – not a salesman.Be aware of how to do a beak even analysis. So how to we get clients to buy more? Follow Up With Existing Customers Surprisingly; few businesses actively follow up with their existing clients.This is a mistake. Your existing customers produce more sales at a lower cost to you.They already know and trust you. Harvard Business Review reported that companies could increase profits by up to 85% simply by decreasing customer defections by 5%. Customer retention is about the most important thing your company can do. It's all about follow up. If you follow up, it will help you to identify problems that customers had but didn't complain about.This will allow you to resolve those problems and keep those and keep those customers.You are providing excellent customer service, and you will generate positive and ongoingword of mouth advertising about your company. A little follow up goes a long way. Marketers tell us that it costs 5 - 8 times the amount of money to get a new customerthan it does to keep an existing customer satisfied. Well, it's true. Think of customer retention as pebbles rolling down a mountainside.Happy customers spread the word, and soon you can have an avalanche on your hands. Follow up is the key. Follow up works to build customer loyalty. It's how you tell your customers that they are important. Research shows that 68% of customers that don't return to a company say that the company never contacted them, was indifferent, or had a poor attitude. Sending your customers follow up letters is the solution. And of course your competition is trying to win your customers. But you can beat them.A follow-up personal note is more powerful that a full page ad in the New York Times.If you invest in your customers, they will keep bringing – and sending – you business for life.No competitor will be able to win them away if you stay in contact and follow up with your customers. Creating A Direct Contact Program The first thing to do is to decide how many times you want to follow up. The more difficult your productsare to understand, and the more expensive they are, the greater number of times you will want to follow up. Decide how often you want to contact your customer. Give them enough time to consider your offer, but not enough time to forget about you. What is the average purchase decision time for your customers? Your follow-up letters or conversationsshould be crafted as carefully as your initial offer. Tell your prospects that you are making sure they are well informed. Remind them that they had previously requested information.Give additional information if possible, and offer to answer questions. Consider adding extra benefitsin your follow-up letter. Always thank them for considering your products, and ask for the sale.Always ask for referrals. Clearly identify your final follow-up letter. This one should be constructed the same as the other letters,but lets them know that you will be removing them from your mailing list unless they contact you.If they are interested, they will pay attention. The key is to craft a series of strong, sales-oriented follow upletters. Or write out a phone script so that it's easy to make a follow up phone call.Have them ready to go, and use them. Create a tracking system and stick to it. There are many time management/schedulingcomputer programs available. You probably already own one or two. Set them up to remind youto send your follow-up letters. If your letter or e-mail is prewritten, it will be easy to stay on track. If you really want to maximize your return on advertising investment, start a follow-up system for your prospects and customers. Your advertising brought them in. Now it's your job to close the sale.Follow up is a powerful way To make the choices that increase profits you have to come up with a strategy You must be committed to it. An owners strategy must envision how one action affects allthe factors that determine profit – a balance between cost cuts and sales increases to be suremost of the money is left with the company. In developing a strategy, a company should analyze in detail the service that contributes most to profits.However, the biggest revenue generators aren't always the most profitable ones.You must look at the bottom line – not the top line.Business owners love to see their revenues climb. But sales growth entails increased cost…you must watch expenses to make sure they remain in line. Variable cost analyze are critical when adding new services. Receivables must be kept in controlor you will have a real cash flow problem. How about this? Cutting fixed overhead is more effective at improving profits than increasing sales. Take a company with $10,000,000 in sales and a 5 percent pre-tax profit margin:reduce costs by as little as 1 percent, it adds $95,000 in pretax profits – a 19 percent increase in profits! To make this happen in sales, You would have to increase sales by $1,900,000…19% or reduce costs by 1 percent. What do you think? 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