There are 3 basic ways that your service business will make more money:
1. Increase # of customers/clients that are buying,
2.Increase the average sale, or
3.Increase the frequency of purchase by your customer/clients.
One of the lessons in the Sustainable Digital Empires Virtual Services is about Improving Your Offer so that you can increase your income. Here is random listing of some of the topics covered in Wednesday 9/23/2020’s coaching class.
When you increase the number of customers/clients that are buying, you are increasing the conversion. If you need more customers, focus on tips to increase conversion.
If you aren’t converting the leads, maybe it’s because your leads aren’t really your customer avatar. Take a look at your customer avatar and refine your marketing so you hit the right group.
When you improve your offer, the entire sales process becomes easier. What makes a better offer? It depends. How do you know when you get it right? Test. Analyze your results. Adjust as necessary. And, of course, you need a list of tests to try on your group.
When you get better, more qualified leads, you need a written sales system with stats, and you need to make better offers. What do you have for a sales system template?
Increase your customer lifetime value. This is a statistic that is very helpful when you are making a decision for your sales & marketing model.
Is it worthwhile to advertise? If so, how much should your advertising budget be?
In order to calculate that number, you need to know two things, your conversion stat and your customers lifetime value.
The customer lifetime value (CLV) is the total gross margin of all transactions. For example, let’s say your client spends $3,000 per year for 10 years in gross sales. That’s $30,000 ($3,000 x 10) and let’s say you have a gross margin of 30%. That means you have a CLV of $9,000. (30% profit x $30,000).
Once you know your CLV, you can start testing new strategies to increase this. Now let’s look at strategies to increase the customers frequency of buying. The reason why is simple. It’s much cheaper to get a current customer to make additional purchases than it is to acquire new customers.
On average, it costs 5 times as much to acquire a new customer as it does to keep an existing one. It’s much more probably that those who have purchased from your company in the past will do so again.
Obviously there are pages more information, audio and exercises all focused on Improving Your Offer. That’s part of the Sustainable Digital Empires Virtual Service course. We have those classes on the 2nd and 4th Wednesday of the month, always at 5 pm Pacific. Get your business going now!