FIFA world cup fever is on and just like many international teams are battling with each other to win matches in Russia by scoring more goals, many organizations in different part of the world are also doing the same. These organizations are also competing with each other to win more customers in order to increase their sales to reach their profit goals. Like football teams need a good formation, chemistry and an effective strategy to score more goals, organizations also need the same that is a “good strategy” to reach their profit goals that can also eventually help them to generate positive cash flows.
In this article, I am going to discuss with you three basic strategies to increase your profits through strategic planning and customer service. Whether you are selling homes or hamburgers, there are opportunities to increase sales and gain a loyal customer base by using these strategies in your business plan.
- Increase the number of individual sales
The first way to increase your cash flows and profits is to increase the number of individual sales or the number of individual transactions. Companies that sell products or services that are only needed every few years or once in a lifetime like a new home, car or a wedding ring have to concentrate all their business activities on increasing the number of sales because once a person has purchased one of these items, he or she is not going to be a customer in that market again for a long time.
If doubling your profitability requires that you double the number of sales of your product or service then this should become the central focus of your marketing, advertising, and your strategic planning that is “doubling the number of transactions”.
- Make larger sales to each customer
The second way to increase your profits is by making larger sales to each customer. Once a customer has decided to buy from your business, then you must think of ways to increase the size of the sale and therefore the profitability in cash flow. The good news is that through providing good customer service and making the customer reach to the point of liking you and trusting you enough to buy from you, he or she will be open to suggestions for increasing the size of his or her purchase. Sometimes you can up-sell the customer to a more expensive item. On other occasions, you can cross-sell the customer by offering additional products or services that go along with the product or service that he or she has just purchased. You can use strategic planning to decide how to get your customer to buy more. Because acquiring customers can be so expensive, you can give deep discounts or bonuses to get the customers to buy something else before they leave, especially if they don’t want to buy the main product which you are offering. You can cut the price on additional items by let say 10%, or 25% or even 50% to capture the add-on sale, especially if there’s little or no cost to the additional product that you throw in like a service contract or delivery and things like that. The extra cash flow that you can earn is the money that you would not have had if you let the customer depart without buying anything. Remember, once you got the customer there, you don’t want to lose them and have them go away forever.
- Frequency of sales
The third way to increase your profit is by getting the customer to buy more frequently. If you sell a product or service that is used and consumed regularly, such as food, business services, automobile maintenance, beauty services, or office stationery supplies, the key to business growth and extra cash flow is to capture more of the customers’ business. Get the customer to buy from you more frequently rather than making him or her go away somewhere else to buy the same product or services from other suppliers or competitors. By using these marketing techniques in your field, you will be able to increase your cash flows, retain your customers and gain many new ones which will eventually help you to reach your high profitability goals.
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The Known Unknowns by Hassaan Elahi 