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Small Changes = larger profits
There was an interesting article in one of the sign magazines recently.
In essence, the writer was saying that the best way to increase profits in an existing business was not by radically changing what you do, but you should simply examine what you already did to see what small changes you could put in place to improve the profit margins. Introducing a number of small positive changes can have a very large impact on your companies profits.
I have been looking at what I could implement to increase my profit margins and have come up with the following-
1/ Always follow up a quotation:-
I’m currently not very good at this, once I have sent a quote out I forget about it. If I don’t hear from the customer I assume they have decided against using me. A simple follow up phonecall a few days later may be all that is needed to complete the sale. (At the moment I only ever do this when I am quiet and have time to do so).2/ Check quotes sent by email have been received:-
Many is the time I get a call from someone expecting a quote to whom I have already sent an email but this has gone astray. If I don’t follow up all my emails with phonecalls how do I know it has been received. I only find out when they’ve gone astray when the customer calls me. How many others have gone missing that I don’t know about? And if the customer thinks I haven’t bothered to follow up his enquiry what signal does this end out?3/ Upselling:-
I don’t usually bother trying to upsell. I give the customer what they ask for rather than try to persuade them to spend a bit more.
e.g. include a sign on the front bonnet of a vehicle. I usually only do this when asked but will now offer it as an extra and try to persuade the customer to spend more. There are many examples of upselling.4/ Invoice everything:-
Many is the time a customer will ask for a small "extra" when agreeing a final layout. E.g another phone number or message to be added to a van layout. I often include this in the agreed price if I’m feeling generous but should really add this to the billThese are only 4 small changes I intend to implement. I am sure there are many more and I’m equally sure these will increase my companies profits.
What small changes would you suggest?
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10 Replies
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I always make sure a customer who comes in for say vehicle lettering is aware I supply them with signs, printed stationery, printed garments, printed pens, domain names, hosting and website. EG Printed stationery now accounts for 20% of my turnover and virtually all of it is through selling to existing customers even domain names and web associated services is on the up over the last year.
It is easier to sell to existing customers than new.
Alan D -
This makes sense Phil……….old fashioned "look after the pennies" way of thinking.
A combination of this with jobs/customers and the same with suppliers to minimise costs/waste etc. has to be a financial benefit.
It is easy when you are busy to take your eye off the little things as we strive to get work completed, fitted, out and invoiced but it all adds up.
I often give customers a freebie when I do a van or shop……..a mug printed with their logo, embroidered polo shirt or a few stickers with their logo on domed……….costs me next to nothing but people like "freebies" and more often than not results in orders.
John
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Some great reminders there Phill.
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quote John Thomson:This makes sense Phil……….old fashioned “look after the pennies” way of thinking.A combination of this with jobs/customers and the same with suppliers to minimise costs/waste etc. has to be a financial benefit.
It is easy when you are busy to take your eye off the little things as we strive to get work completed, fitted, out and invoiced but it all adds up.
I often give customers a freebie when I do a van or shop……..a mug printed with their logo, embroidered polo shirt or a few stickers with their logo on domed……….costs me next to nothing but people like “freebies” and more often than not results in orders.
John
I agree with the freebie thing john, customers always like getting something for free even if its just a pen or stickers but when you give them a free cup with their logo on it, put your logo on one side and theres on the other…..reminding them where to get their next signs in the future 🙂
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Excellent advice Phil.
I’ve won several jobs by following up quotes, even if we don’t get the quote it’s always good to know why not. Who’s getting the job? Why? and Price? I’ve won several jobs by following quotes up. It’s especially good if the competition aren’t doing that it makes you stand out from the rest and worth those few extra pennies.
We also send out a customer feedback survey – It makes the customer sit down and think just how brilliant we are, and we can use the feedback for promotional material.
My other tip – Spend time on your business, not in it. I frequently shop around and price compare media/material etc and there are savings to be had.
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I had a load of A6 jotter pads printed and I give them out with a card and leave one in every van I letter. Everytime someone uses a pad and tears off a sheet to pass on they distribute my name (assuming its not going in the bin:)
Alan D -
Interesting one this.
Like Phil said, if you’re not busy then you can be more diligent chasing up quotes – but if you are busy, presumably you’re already doing things well enough to not have to spend time on smaller details…unless you’re making no money of course.
In my experience most customers know what they want to spend and don’t like being upsold to, I know it works sometimes, but not much.
Personally I think you judge each job and customer on an individual basis and use your experience to do what’s right. Some are worth throwing extras in, if they spend a lot with you, some not.
I think we would all like to spend more time on these sorts of details but to really make profit you have to have the fundamentals right, get your materials for the right price, get your sale prices right, and get a good level of business through the door. I like the idea of the small details but you have to have time to do it all
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Thanks Phil,
To add to your second point about following up quotes I’ve started using an app called "sidekick". It lets you know when a email has been opened and reopened so you can always be sure the recipient of the quote has got it and has read it. You can then strike while the the fire is hot as it were.
Greg
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Very interesting read, one of the main things I always try & do is ask for referrals, just at that point were you have finished the job & all is looking great, most people that we all do work for have contacts that use our products/services & who better to recommend you than a happy customer
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Hey Phill,
All that makes sense to me, but did make me stop and think "do we do that?!" I’d be interested to read the whole article.
You’ve got me thinking now! haha 😀
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