Learn to work smarter, not harder, by focusing in on your "money losing" activities and turning them into "money making" activities.
There Are Only Two Kinds of Activities in Your Business
In any business, most activities either:
a) Make you money, or
b) Lose you money.
How well you understand those two activities and how well you focus on the right one, will determine how much money your business will generate for you.
During my 15 years as a management and marketing consultant I've been amazed at the tremendous difference that simply focusing on the right activities can make to a small business owner's bank account.
However, without a solid understanding of marketing it's often difficult to tell the difference between activities that will make you money and the ones that will lose you money.
As consultants, our primary job was to show our clients which activities they were doing that were money-losers, and which ones were money makers. Then our clients simply had to stop the first and increase the second.
Sometimes all they had to do was stop the money-losing activity and their sales would go up. What a concept! The resulting difference in sales and profit was almost always incredible.
Here's an example from our files.
Lucy - not her real name - spent hours and hours each week trying to create a new ad to run in her local newspaper.
It was obvious after looking at her ad that it wouldn't make money for her. It was what we call a 'One-Step' ad. She was trying to sell her service in her ad and hoping that interested people would call her and buy immediately. Very few people ever called.
Every hour she spent on creating those ineffective ads was wasted money. Not only that, she was also losing the cost of the ads-and the money she would have made if she had been running an effective ad. That amounted to huge losses over the course of a year.
Lucy's marketing strategy was all wrong. She wanted to attract 'paying' customers with her ads - every business owner would love to do that - but for most small businesses that strategy doesn't work. Most of the people who saw her ad didn't know, like or trust Lucy or her business. No trust - no sale.
We taught Lucy that it's much more effective and much more profitable to use your ads to attract interested 'prospects' who can then get to know, like and trust you and your business. Only after that trust is established would they be willing to buy.
We also showed Lucy that once she had an effective 'prospecting' ad, she would never have to create a new ad again. That same ad would work for her week after week, year after year.
That would mean she wouldn't have to spend her valuable time creating new ads each week. She could spend that time converting her new-found prospects into loyal customers. And that's exactly what she did.
In the past, Lucy would get, on average, 3-4 calls per week from her old ads.
The first day she ran the new 'prospecting ad,' her phone rang off the hook - and it continued to ring for two more days. She ended up getting calls from 156 'new prospects'- people interested in her service - that week from the same size ad.
Within a few years, Lucy's business grew to 1.5 million dollars in annual sales.
And she has been running the same ad, week after week, for the past 12 years.
That's an incredible example of going from a money-losing activity to a money-making activity.
Think about it. She went from hours of hard work each week creating new ads, to zero hours - and made much, much more money. Less work, more money.
That's called working smarter, not harder.
Here are a few more examples of money-making activities versus money-losing activities.
Steve owned an automotive accessories store. He sold truck and car accessories like sunroofs, auto alarms, etc.
Steve's policy in his store was that whoever was closest to the telephone when it rang should answer it.
Uh-oh - here comes a big money-losing activity.
When people call a place of business, they want professional service. They actually want to be impressed with the treatment they get on the phone. It's one of the biggest criteria people use when deciding which business to buy from. You don't want just anyone answering your phones if you are concerned about making money.
Steve's employees, especially the back room installers were not trained to answer the phone in the most professional manner-and this cost Steve's business thousands in lost sales every month.
We showed Steve an estimated projection of how much money this activity was losing him each year. He was shocked.
We then showed him how he could easily train two or three of his key employees to answer his phones professionally and to provide excellent customer service on the phone.
Steve's phone conversions shot up immediately - and why wouldn't they? He was now giving his prospective customers what they wanted - professional treatment.
Here's another dramatic example of employee activity that loses money versus activity that makes money.
Gary, the owner of a fast food restaurant, never gave much thought to the employees he hired to work at his cash registers. He figured that as long as they showed up and worked their shift that was good enough.
But Gary was losing customers, a lot of customers, and he didn't know why.
The first money-making activity we performed was a Customer Satisfaction Survey. We received hundreds of surveys from Gary's customers giving us their honest feedback and discovered that his customers were not happy with the quality of the employees taking their orders.
They felt that many of them were unprofessional and unfriendly. They acted as though they were bored with their jobs and wished they could be someplace else.
This was bad news. Unprofessional employees can kill a healthy business in no time at all.
We showed Gary that his hiring activities, his training activities and the activities of his employees at the cash registers were losing him money - a lot of money.
We then helped Gary put together a hiring program that ensured that only 'friendly and professional' people were hired and placed in the cash register positions. His employees were then trained on the proper procedures for taking customer orders in a professional and friendly manner.
We helped Gary gain a very valuable insight when it comes to hiring employees - if you want a dog that barks, then don't get a cat! You can't blame a cat for not barking.
In other words, don't try to change your employees' personalities and attitudes. That's a frustrating, money-losing activity.
Instead, hire the right people with the right attitude and aptitude for the job. Once Gary started hiring and training people who were naturally friendly, happy and professional, his customer satisfaction ratings sky- rocketed and his sales began to rise once again.
Gary changed his activity from money-losing to money-making.
Here's a final example of money-losing vs. money-making activity.
Prospective customers would call Sharon and ask her to send some literature about her company.
A few days later Sharon would call hoping to set up an appointment with the prospect.
She would start the call by asking, "So, have you had a chance to look over our materials?"
Can you guess what the answer was most of the time?
"Uh, well, actually, no, I haven't gotten to it yet. It's sitting right here in my pile of mail and paperwork. Why don't you call me back in a week or so?"
Sharon was performing a common, money-losing activity, simply because she didn't understand her prospective customers.
Most of them feel overworked, and up to their eyes in unread reports, articles, proposals, etc.
The last thing you want to do is put them on the spot. Her activity made them feel bad, and their only recourse was to put her off.
Here's the money-making activity we taught Sharon to use instead.
"I'm sure you've been extremely busy and haven't had a chance to even look at the material I sent to you."
"Well, you're right. I was hoping to get to it over the next few days."
"Actually I can save you some time. Instead of reading the material, I can stop by your office and go over the highlights in less than 15-20 minutes. Plus I can answer any questions you might have at that time."
The first activity was money-losing. The new activity was money-making, since Sharon was able to make a lot more successful appointments by using it.
The actual script was more detailed, and her offer was much more enticing, but we hope you get the general idea.
The point is that every activity you or your employees perform in your business is either making you money, or losing you money.
Take a fresh look at each activity in your business and ask yourself if you can clearly see how that activity is making you money. Or ask yourself if you can see how the activity is losing you money. If it's losing you money, stop the activity and replace it with a money-making activity instead.
If you want to know what some of the most effective money-making activities are so you can begin focusing your efforts on those activities, then take just 5 minutes to learn about our Give to Get Marketing Solution.
In no time at all you'll know exactly what you should stop doing and what you should start doing to begin attracting customers and sales like a magnet.
Copyright (c) 2003, Joe Gracia-Give to Get Marketing
Social networking icons by komodomedia.com.
Site copyright © 2000-2011 by Shel Horowitz