Month: August 2013

Raise Your Prices Right Now

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Let me be blunt: you need to start raising your prices.  However, this pricing must be in context.  Pricing, like everything else, is connected to. . . well, everything else.

If you are selling old watches at a flea market, setting your price at $1,000 per watch is probably not a good idea.  Even if the watches are worth that much, it’s unlikely you’ll find very many educated aficionados wandering through a flea market expecting to spend several thousand dollars on old watches.  You need to be able to provide a quality product or service to a target market that can appreciate and afford your prices.

But charging more money just to put it in your pocket can be self-defeating.  You must use some of the higher payment to invest in your business, so that new and existing clients will still be willing to pay higher prices.  Higher pricing can help your product or service become aspirational; people will save up to be able to afford you.

By charging a higher price, you also cut down on the people who can afford you.  This is true.  And if you’re looking to provide service to a less financially capable group, raising your prices may seem like a cruel thing to do.

But, look at it this way: the ones who can afford your prices will afford you the time to help the most needy at low or no cost.  Essentially, they’re subsidizing your good deeds.  I have a health professional who, at the beginning of her career, was conflicted between helping the poor in need and making enough to survive herself.  Now she charges high fees for her services, and is financially sound enough herself to be able to afford to help those in need for little or no cash.

You should have a budget written out, along with sales goals you need to meet in order to address that budget.  Let’s say you need make a profit of $1,000 per week to break even with your planned expenses.  If you have a service that nets you $100 per sale, you need to sell 10 of those to meet your $1,000 goal.

But say you create a service that, when purchased, nets you $1,000.  How many of those do you have to sell per week to meet your needs?  Just one.  Now if you’re attempting to sell the higher-priced service to the same people who can only afford the lower-priced one, you will meet a lot of price resistance.  But, if you find a group of people who appreciate the higher-end service and can afford the price, and market it to them, you may wind up with the same sale-to-offer ratio you had before.  Perhaps a better ratio.

Stop right now and look at whatever you’re selling.  Imagine that your costs suddenly doubled.  What would that product or service have to be like in order to get your clients to buy the newer, higher-cost version?  What would you add to make it worth it then?

Now, what could you add right this minute to get them to pay the new, higher price?  A nicer wrap job?  More personal attention?  A better guarantee?  A nicer sales location?  What would it take to attract and keep clients who can afford and appreciate the newer, higher-priced version of what you’re selling?

Now – right now – raise your price and start providing that better experience to that target market!

Mine For Your Gold

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How do most people find gold?  Well, they look at the ground and pick up shiny rocks.  They see another one a few feet away and they run to that one.  Then there’s one over there, by that boulder.  Yeah, you get it: I’m literally bringing the “low hanging fruit” analogy down to earth.

So most folks make a little gold by picking it up off the ground.  But if you’re smart, you do a little research, identify the most geologically likely place for gold, and then you put in the effort and dig for it.  (For fruit, you plant your own orchard and then get a ladder so you can reach every branch.)

Mining for gold allows you to dig deep in your own private. . . well, gold mine.  You avoid all the other people scratching around in the dirt looking to get rich.  When you find and follow the vein of gold, though, it’s all yours.  You may pay more for specialized machinery, and hire geologists and other folks to swing picks and run sorting machines, but if you find the right vein, the profits will be exponentially higher than the costs.

So, what am I saying in terms of ramping up profits in your business?  First, you need to identify the right group of customers for your service.  You could also find a group and create a service or product to serve that group.  If you’re smart, you’ll do both.  That group becomes your “likely spot to dig for gold.”

Then, you need to reach out to this group and begin to provide them with goods and services, at prices that maximize your profit.  Understand me clearly: I do not advocate charging exorbitant prices for poor or mediocre products or services.  You charge high prices so that you can provide the best possible solutions for their problems.

Let’s go back to my fictional rug cleaner.  Theoretically, any one who has rugs is a prospect for their services.  Joe, owner of Joe’s Rug Cleaning, looks around and sees that the other cleaners in his city charge an average of $50 per room.  Conventional “wisdom” says that in order to get clients, he has to charge less than that.  That means that even if Joe has more experience and a better overall service, he’s still going to make less than the worst hack who charges $50/room.

But Joe realizes that there are dozens of small businesses out there, just trying to get in the door of anyone with a carpet at the lowest possible price. Joe makes like a geologist looking for likely spots and does his research.  He contacts all the local suppliers of high-end carpeting, asking where their product is installed.  Joe learns that the Bounty Bay neighborhood is filled with wealthier folks who bought nicer, more expensive carpets.  They appreciate quality, and expect to keep their homes – and their carpets – in top shape.

Joe’s an unknown.  Rather than plug his high-priced carpet cleaning straight away, he writes a pamphlet covering the care and cleaning of expensive carpets and rugs.  He makes himself the local Recognized Expert on caring for top quality threaded flooring by getting endorsements from local carpet and rug dealers, as well as builders of high-end custom homes.  Now he sends out his pamphlets to everyone in Bounty Bay.

Joe’s phone starts ringing!  He’s lining up jobs in Bounty Bay, making sure he asks his satisfied customers if he can use their names when contacting their friends and neighbors.  He’s found a seam of gold, and is beginning to actually mine it.  In addition to his top end service, he offers a one month guarantee.  If, for any reason at all, the carpet becomes stained in the next 30 days, he’ll come clean it again for free.

Joe talks with a couple prospects, and finds that they have invested in hardwood flooring.  Rather than lose them as clients, Joe educates himself on the care and maintenance of hardwood floors, and offers to clean them as well.  He’s found an additional service he can offer his selected group that ties in with what he already does.

Joe can suggest an annual cleaning, but what can he do in the mean time?  How about selling eco-friendly floor cleaning products to his clients?  How about selling those floor cleaning products to people who haven’t hired him to clean their carpets?  How about adding a line of environmentally friendly general household cleaning products to his catalog?

Before selling his cleaning products, Joe is now averaging $200 per room – that’s four times what his “competitors” charge!  And his clients are happy to have him, because Joe is the Recognized Expert at cleaning high-end flooring.  Now, rather than going door to door and selling his services, Joe has people calling him asking to pay for his services.

All of this can happen for you if you identify your target market and become, in their eyes, the Recognized Expert in your niche.  You need to find your likely spot, and then mine it.

The FUFT Principle – You Read It Here First

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You’re sitting around doing nothing, or maybe at the office having a conversation, when suddenly the best idea in the world strikes!  It doesn’t just happen to you, it happens to almost everyone, everywhere.  But why isn’t the world awash in free energy, anti-grav packs and time machines?

Lack of FUFT.

I really don’t like sports metaphors, but they really fit in this particular instance.  Let’s say you get invited to play golf.  You put your ball on the tee, pull the driver back over your shoulder, and. . . stand there.  Just stand there, with the club head pointed up in the air.  How far does the ball go?  It doesn’t.  You haven’t even attempted to swing at it.  Maybe you’re afraid you’ll flub the shot in front of your partners.  Whatever.  The point is, the ball can’t go anywhere because you haven’t put the effort into attempting to drive the ball.

Second scenario.  You pull the club back, and with a mighty swing you bring the club head down and. . . stop it as it hits the ball.  The ball pops off the tee and travels maybe 30 yards.  If you play the game taking swings like that – just hitting the ball, it’s going to take you all day to make it through nine holes, if the course is completely empty.  People who start out behind you will go around, or maybe drive across town to another course.

Third scenario.  You tee up on the first hole, swing the club through the ball and back up in the air on the other side.  It’s a monster drive!  The ball travels 270 yards, magically winding up on the green about 10 feet from the hole.  You place the driver back in your bag, pick it up and head back to your car, telling your friends you have to go pet your dog.

In each of the above examples, no FUFT.

Follow Up, Follow Through.  These four words are why good – maybe even mediocre – ideas come to pass.  Sure, a few great ones as well.  But it’s the people who apply the FUFT Principle – Follow Up and Follow Through – who get things accomplished.

Not everything is worth completing.  But that’s why you need to Follow Up.  Check to see if anyone else is working on the idea you just had.  Is there a need for your great new product or service?  Is someone already selling it?  Do customers like their version?  What can you do to make your version better?

And this is NOT strictly a business principle.  You’re sitting at a social event when you see someone and think, “I’d like to go on a date with that person.”  FUFT!  Go meet them, chat, get a number.  You’ve followed up, now follow through by calling them and actually meeting for a burger or movie.  FUFT is a principle that will serve you throughout your life.

But you can’t just “learn” it or “know” it – you need to apply it.  You’ll be amazed at what can actually happen the next time you have a light bulb go off over your head, and you apply the FUFT Principle.

Three Letter Words

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We’re all familiar with the euphemism “four letter words.”  There seem to be a lot of those in our vocabulary.  But there are a small handful of three letter words that should be in your every day business repertoire.  I’d like to go over three of them with you now.

I have one client who runs a restaurant.  We were talking about increasing his business without having to spend a lot of money.  I told him it was easy, and told him about the first word.  He was doubtful – the word was so simple, so direct.  No trickery, no smoke and mirrors.  I didn’t even have the decency to charge him for the wisdom.  He said he’d think about it and get back to me.

A couple weeks later, my wife and I were in his restaurant for dinner when the owner came out to greet a couple of the tables.  He turned to approach one of the tables and saw me.  His face turned bright red.  He turned to face his customers.

“Is your dinner all right?  Anything you need?”

“Everything’s excellent,” they said.

“In that case. . .”  The owner cleared his throat.  “In that case, please join us again soon and consider bringing along some friends.”  The owner scurried off for the safety of his kitchen, while the couple resumed their conversation.

The restaurateur called me a few days later.  “It worked!” he yelled.  “That couple came in the next night, and brought two other couples with them.  One of those couples has already been back!”

The first word you need to internalize and use as a Recognized Expert is “ASK.”  People wonder why I spell it in all caps.  I used to tell them it stood for “Acquire Specialized Knowledge” or some such, but the real reason is this: it’s a damned important word!  In this case, the owner ASKed his patrons if they were happy with their experience at his establishment.  Then he ASKed them to return, and bring more business with them.  They did.

We all want to find the perfect client who buys often, and purchases high-profit-margin goods and services.  How do you find out what else they want to buy from us?  ASK.  No special tricks are needed.  Just call or email – or better, ask them in person.  “What can we offer you that we currently don’t?  What would make you refer us to your friends?”

ASKing is especially important when it comes to sales.  A lot of people are afraid to ask for the sale.  True, you may get denied, but then you can ASK follow-up questions to find out why.

On the heels of ASK comes our second word.  Once you get feedback to your question, you must ACT on that information in order to effect a change.  Even if the only ACT is to tell the person who made a suggestion that you considered their suggestion, but aren’t implementing it right now, you need to ACT.

Imagine you run a carpet cleaning business.  You ASK a client what you could offer them in addition to cleaning services.  “Well, how about some environmentally friendly cleaning products I can use between professional cleanings?”  Now you need to ACT on that suggestion, sourcing the best eco-friendly products and adding them to your sales presentation.

If you remember to ASK and ACT, you’re well on your way to becoming our third three letter word: a Recognized Expert PRO.

“I Can’t Do That!”

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In addition to running Agile’ I also teach and train traditional Okinawan goju-ryu karate.  We were working on board breaking a couple nights ago when I had a student tell me, “I can’t do that!”  And sure enough, she couldn’t.

Later, I heard her say to another student, “Well, I know you have to run 5 miles to become a black belt, so I’m never going to be one.”

When it comes to being a marketing consultant, my clients shouldn’t be hiring me to be their buddy.  They should have the attitude that I’m a kind of trainer, one who kicks their butts until they and their business is in fighting shape.  They want change for the better, and I’m there to make sure it happens.  Any type of change is painful – or at least, it’s not painless.  If you want a magic wand to wave and have more customers who spend gobs more cash, while letting you sleep in, then I’m sorry but I never attended Hogwarts or any other wizarding academy.  I can help you gain better clients, and let you do less work, but it’s not going to happen with a wand.

Just running a business requires effort.  To change it and make it better requires that you do something different as well.  It’s scary.  But if you don’t believe in you, why the hell should I?

I can tell you from experience that if you say, “I can’t do this,” then there’s almost nothing I or anyone else can say or do to force you to achieve whatever goal it is.  Change requires the self-discipline to carry on working through pain of some level.  The pain, once we go through it, is usually a lot less than we thought it was going to be.  But in order to accomplish the changes, you need to believe in yourself.  No one is ever going to be invested in your success the way you are.

If you believe “I can’t do this” or, “This isn’t going to work,” then you’re probably right.  I can help you work towards your potential, and I may believe in you, but until you believe in you, nothing’s going to happen.

Educate, Then Sell

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Years ago, I had an unusual interaction with a sales person.  It was winter, about 7:30 PM so it was already dark.  My house is set back away from the road, and my driveway is over a 10th of a mile long.  Not expecting any one, my outdoor lights were out.

I’m in my office when suddenly there’s a loud, frantic banging at my door.  Remembering that there had been a bad accident on the road in front of my house only a couple weeks before, I ran down the stairs full of dread and threw open the door.

Standing there was a gentleman in parka and gloves, grinning and pointing to a large picture.

“What?  Can I help you?”

He continued to grin, pointing to the pic and nodding at it.  Obviously no-one was hurt.  My anxiety level started to drop.

“It’s a picture.”

“Yep,” he said.  “It’s an aerial picture.”

“Uh huh.”

“Of your house.  I’m selling it.”

“I’m not buying it.”

His happy demeanor instantly turned to anger-tinged sadness.

“Jeez man, you don’t have to be so rude about it!”

I was dumbfounded.  I didn’t think I’d been rude at all.  I didn’t visit his house in the dark, pound on the door like there was someone on fire, and then expect him to automatically buy what I was holding in my hand.

“Good luck elsewhere.  Have a nice night.”  I shut the door, shaking my head.

It’s true – a picture is worth a thousand words.  And I suppose when you’re selling one, the prospect should recognize it’s worth instantly.  But even when you’re looking to sell something you think of as basic and self-explanitory, it’s always a good idea to educate your prospects.  I know I’ve used this example before, but look at the places in your local mall food court giving away samples on a toothpick.  You’re hungry, it’s food, buy it!  But the sample is the most basic form of education: “This is what it’s like.”

Providing any type of education prior to a sales attempt allows you to separate the merely bored from actual prospects.  It also provides the prospect with a better understanding of your product or service, and how it relates to their lives right now.  Delivering educational information about your product or service also allows you to build a story around the pitch, and involve yourself and the prospect in the story.

“Hi, I’m Joe.  Earlier this year, I went up in a two-seat plane with my pal Dave.  You should see how clean and green everything looks from just a few hundred feet in the air!  We were flying over your neighborhood when I began snapping pictures of some of the houses.  Once I saw how nicely they came out, I knew I had to offer the owners of those houses the opportunity to share the experience of seeing their property from the air.”

Five sentences to build that story and offer some education, as well as pre-frame the sale.  Now he can begin asking the sales questions.  The whole thing could take less than a minute.

Your Book As A Business Card

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We have a number of clients who have published books, or put out instructional DVDs.  Some of them have had a hard time grasping the fact that these products are not, in and of themselves, a profit generator.  Rather, they are like keys that unlock doors to bigger and more lucrative sales.  They should be given away like business cards.

Yes, I understand that one book – or DVD or CD or any similar product – costs a lot more than a business card.  Even if you get the books or disks at wholesale.  Just as you shouldn’t walk down the street passing out business cards to all and sundry, you need to be selective in giving out your Proof of Expertise.

Forget about selling this item.  You need to selectively hand them out to individuals who can help you book speaking or training gigs.  This is where the money is going to come from.  Any incidental sales of this item are a bonus.

The product that is your Proof of Expertise is exactly that – proof that you have something to say, can present it in a socially viable medium, and are capable of carrying out a difficult procedure (the conception, completion, production and distribution of the Proof) from beginning to end.

Even in today’s market of self-published ebooks, where there’s little to no cost for creation, production or distribution, very few authors can make even a poor living off the sales of their products.  Selling 25,000 copies in a year and earning a profit of $2 per copy only nets you $50k, and that’s before taxes and expenses.  By selling a training session to a room full of attendees, you could earn that much in a weekend.

Once you have your Proof product, put your effort into using it as a key to unlock sales via personal presentations.