The 1 Proven Strategy For Increasing Profit
A POSITIONING APPROACH
What is one method for increasing a company’s profits that have been proven time after time? We find this is the answer for the huge majority of businesses out there, and it is so simple that it is often overlooked.
Are you constantly having to cut into prices and profits in order to make sales? Are you finding it difficult to charge what you should because of your competitors or price-driven customers?
Are you finding that your customers are less loyal, they respect your services less and you are receiving less revenue for fulfillment? This then carries into your business where, as the result of decreasing profit margins, you are more restricted with the level of service or quality of products you can provide.
You are not alone. This is an increasing trend, with the increase of competition and simultaneous increase in expenses, many are finding their profit margins all but disappear. Their company was once a gateway to a better life, but now is more of a money vacuuming nightmare that you cannot see a way out of.
What’s worse is that as business owners and operators we are responsible for the company’s success and other people. We have staff that work hard and that rely on their paycheck to be able to afford to live.
We have our own families, partners, and loved ones that also rely on us to be able to deliver and help with affording a lifestyle they deserve. Usually these are the people that supported you the most when starting the endeavor of building your own business.
Finally, your own reputation with family, friends and in the industry is at risk. In many ways, others directly associate you with the success or failure of your business. This expectation and pressure is not something that can be dismissed or diminished. In fact, often it is crippling.
What is the difference between where you are now and where you would like to be?
Imagine if you are in a position where you don’t have to discount or make concessions on price, where customers are driven by the value you provide and no longer make direct comparisons with other businesses based on price alone. Customers are willing to pay more to work with you or buy from your business and as a result, you have increasing levels of profit and an ability to provide a greater level of service to your customers.
Sounds great right?! Here’s how it’s done.
Learn to create tangible points of differentiation, commonly referred to as Unique Selling Points (USPs). Simple? Yes. But are you actually different?
Most businesses we work with believe they are different, but often find it hard to describe real tangible points of difference. Not to mention that their points of difference are usually negligible and not advantages at all, claims like ‘we are cheaper’ ‘have better quality’ or worst of all ‘we are better’. I mean ‘better’…what does that mean?
So what should we do to create points of real differentiation? Here are my three favorite methods. Each one of these can change how you’re positioned and the profit you make and all three will undoubtedly change things for you.
First, claims like ‘best’ ‘quality’ or ‘cheaper’ are next to useless. Instead start to think about tangible methods like how you provide your service, how it is supported that goes beyond industry norms, or what is the unique way that it is sold that is truly innovative. Making tangible changes like this will create real USPs in a way that provides value and builds brand recognition. An easy example of how to do this is to think of what is currently done and do the opposite, McDonalds did exactly this by taking the standard slow dining experience and creating the fast food model…different!
Second, stop selling products and services that are the same, learn to create offers of incredible value. Learn how to present something to the market that is perceived as 10x the value of what you are charging. Make it really hard for your customers to say no. Remember that people love to buy, you just need to make it easier for them to justify it. Gyms are a great example, they all offer standard fixed price memberships..boring! Instead, those that stand out (there are very few of them) learn to create offers that address multiple aspects of their customers’ health and package it up into a service that is packed with problem solving value.
Third, you want to be different, and not just a little different, really different. Think about every element of your marketing, sales and fulfillment, is it actually different? When you look at the copy (writing) on your website is it similar or different to the competition? When you look at your emails, different or similar? When you think about how your customer interacts with your business, is it different or similar? Remember that a prospect will either think of your business as crappy, same-same, or mind-blowingly amazing. Standard, familiar methods will never get you to amazing…Tesla is changing the way the majority think about the driving experience.
This gets the profit ball rolling, you now have the margins that allow you to kick the business into a new level. You are now in a position where you can start to spend more to acquire customers, you have more margin then the generic competition, this increase in spend allows you to grow and control a larger segment of the market. The undifferentiated competition doesn’t have the same capacity and therefore cannot do anything but watch.
That’s it! Actually be different in the market and reduce the comparisons between you and competitors. Be like Tesla, McDonalds and other companies that decided to be tangibly different, it worked pretty well for them…