4 Proven Steps That Will Generate Turnover for Your Company
Your company’s economic goal is to create value; value for your customers through your services, and also value for your company, your shareholders, and yourself.
Creating value for your company is a two part process.
The first part involves generating maximum turnover; optimizing the amount you are bringing in from your services. The next part involves effectively managing costs; both those directly related to your services, and those overhead costs like advertising, rent, and salaries.
Please note, in this article, the word “services” refers to the offerings you provide your customers – whether those are tangible products, consumable goods, or actions with measurable results.
When generating turnover, your initial focus should be on maximizing the sale of your services, and that’s what I’ll discuss in this article.
Eager to Boost Your Turnover?
Start By Taking These Proven Steps…
1. Analyze and Optimize Your Current Turnover
To optimize your turnover, it’s important to gain a comprehensive understanding of your financial data. This means having a clear picture of your customers, your invoicing, and your services.
Start by identifying your largest customer segment and most popular services – thinking only in terms of volume. Next, identify your most profitable customers and most profitable services – thinking only in terms of yield.
If you don’t have this information at your fingertips, take a little time to gather these insights from your accountant, financial assistant, or online finance management program. Having a clear picture of these numbers is key to increasing your revenue.
What Should You Look For?
The Pareto principle (also known as the 80/20 rule) states that, for many events, roughly 80% of the effects come from 20% of the causes. Let’s take a look at your financial data through the lens of the Pareto principle.
To do this:
- Identify the percent of turnover represented by your largest customer segment. How much revenue is generated by the biggest portion of your buyers?
- Next, identify your best selling services – these are the most popular and highest volume sellers. What is the profit margin for these services?
- Now, identify which services your largest customer segment buys most frequently. Have you optimized these services for profit?
- Finally, identify any customers or services that aren’t generating much revenue. What is the specific profit margin for these low selling services?
Now, It’s Time to Make Some Choices Based on This Data
These steps may seem simple, but taking them today will immediately begin to improve your turnover, and will have a direct, positive impact on your bottom line.
- First, make the choice to let go of your least profitable customers, and your least profitable services.
- Now, redirect this time and these resources towards your most profitable customers and most profitable services.
- Finally, optimize your business so that you sell your most profitable services to your highest volume customers.
Need a Hand With These Decisions?
2. Get Results Quickly By Harvesting Low-Hanging Fruit
Do you have services that you haven’t advertised yet? Are these services ready to be developed, or even ready to be marketed to your buyers?
If so, you have a major opportunity at your fingertips.
You have already identified which customers purchase which services, which means you have valuable insights into your clients’ behavior. Use these insights to begin cross selling: marketing your new services to your existing client base, and upselling: finding new opportunities to market your same services to your client base.
And of course, maintain an open dialogue with these clients; continuously monitoring whether their needs have changed, and whether new opportunities have presented themselves.
By staying in touch with your customers’ evolving pain points and desires, you can continue providing the highest value; keeping those buyers coming back to you for more.
3. Evaluation of Pricing Strategy and Optimization
Take a look at your current pricing. Do you have a pricing strategy in place? If so, are you sure you’re not leaving any opportunities untapped?
Chances are, your current prices are based on a cost-plus approach, and that you’ve determined your pricing – in part – based on your competition’s price points. If your pricing has been deliberately set to 10% below your largest competitor’s price points, you’re not alone – in fact, this is the pricing strategy used by most business owners.
And yet, what if your customers would be willing – or even eager – to pay more for your services? What if a slightly higher rate would even create a perception of greater value for those buyers – making your services more profitable? Take a step back and look at your pricing strategy. Is there an opportunity here to increase your profit margin?
A good pricing strategy consists of a mix of different approaches. Certain models are better suited to certain market sectors, and every business should have a pricing strategy that fits their unique structure, customers, and goals.
Some possible strategies include:
- Value-based pricing: coming to a price decision based on the consumer’s perceived value
- Project-based pricing: a fixed-rate model in which you charge a flat fee on a per-project basis
- Premium pricing: deliberately charging more than the competition to create a perception of value
- Freemium pricing: offering a basic set of services for free, with enhanced features for a fee
- Dynamic pricing: actively adjusting the price point of your services with market fluctuations
- Cost-plus pricing: adding a markup to services to ultimately arrive at a profitable price point
- Competition-based pricing: using your competitor’s price points as a benchmark to determine your own
- Hourly pricing: a straightforward approach of charging for your time in exchange for money
Every business is different, and your pricing model should be customized to help you reach your specific turnover goals.
4. Acquiring New Customers – New Business Development
Acquiring new customers is an ongoing process that requires an almost constant investment of time and energy. Optimizing customer acquisition is key to running a sustainable, profitable business.
To efficiently recruit new customers, it is important to know:
- Your ideal customer
- Their specific pain points
- How your services solve those pain points
Once you have identified these factors, make sure you have aligned your sales and marketing departments, and chosen the best channels to get in touch with these potential customers.
Aligning Your Processes
Your marketing and sales processes should work hand-in-hand. This means that your marketing efforts should feed directly into a sales funnel that leads your ideal customer through a user-friendly, result-driven buying process.
Take some time to evaluate your current sales and marketing processes. Are they working together to optimize the customer journey? Align your marketing and sales efforts to ensure you’re getting the most out of every lead.
Choose Your Channels
Clearly determine which marketing channels you use and the specific steps you follow to attract your ideal new customers.
Combine digital marketing channels with offline networks and contact building; using these two methods to generate warm leads who are eager to opt-in to your business. This way, your sales team can generate maximum returns on your marketing investment.
Take These Fail-Safe Steps for Success Today
By following the four steps above, you can quickly leverage your efforts, and start generating measurable turnover for your business. This way, you can build a sustainable, high-performing brand that succeeds, long into the future.
Take the first step towards higher turnover today by booking your free, 45-minute strategy session.