Ep.52. 7 Effective Steps to Shoot up your Profit

Breaking down the source of profit makes you understand more how to increase it.
Breaking down the source of profit makes you understand more how to increase it.

As business people and entrepreneurs, it is only natural that we think of increasing the profit of our business. But it isn’t rocket science and definitely, there’s no short cut to hasten the process. More often than not, aggressive approach to generating profit results to failure. In this Episode, David Counsell and David Pritchard break down the familiar steps that you may be applying to increase your sales revenue.

Profit building does not always equate to the increased amount of the profit margin. And it fact, you have to work backwards in order to derive your desired results. Additional benefits such as privileged information for your clients are sometimes more valuable to increase your sale. And you are privileged to be reading, this so listen to the discussion and start computing.

In this Podcast

00:00 Opener
00:44 Welcome to David versus David
01:08 Greetings from Paradise
02:30 Let’s talk about profit
02:43 We all do something to generate profit that we can tweak and get a multiplier effect
03:01 But we’ll break it down to 7 bits
03:08 Step no. 1 – Increase your traffic
03:25 Increasing the number of visitors to your shop or site will increase the opportunity for sales
04:13 You can advertise to that group only
04:36 If you get your Adwords work for you, you get your name in front of more people
05:04 Step no. 2 – Getting people to opt in
05:24 It means turning the people who are inquiring to be possible prospects as clients
06:25 It could also be providing them with privileged information
08:46 Step no. 3 – Conversion
09:00 Let’s say you got 10 people to opt in, and the rest of them converted as completed sales then your sale has just lifted
11:08 Step no. 4 – Increase the average value
11:17 You just don’t whack an additional percent on top of the bill
11: 45 Play with the combinations of the products that you sell
13:13 Even a percent of increased sale amount has effect on your total sales
13:36 Small amounts can enhance the profit margin
13:40 During the global financial crisis, Australians increased the amount of average sales and it has generated more profit despite the decreased number of customers
14:09 Cutting overheads has also helped
15:02 Step no. 5 – Increasing the number of items that your customers are buying
15:33 It is important that you encourage the incremental sale growth
15:48 It can also work online where items are being suggested
15:54 McDonald’s for example always encourage upsize the sizes of your meal
16:20 Train your staff to upsell
16:36 Chocolates, magazines and other products are strategically placed in the check out counter to incrementally increase the sale
17:33 Most of these are the high profit margin stuff that are cheap and encourage impulse buying
18:24 The cost of marketing on the succeeding items are less and the profit tends to be larger
18:50 Step no.6 – Tweak the average transactions per customer
19:33 If you can get your clients to come back more often, you increase the multiplier
19:57 Look over the lifetime value of the customer
20:30 It’s cheaper to keep existing customers than to invite new ones
21:18 Repeat business is more profitable
21:31 Step no.7 – Think last of your profit margin
22:25 An interval of blind computation
23:30 Focusing on increasing margin, you may not do a great deal versus focusing on the first 4 bits discussed
25:15 Instead of thinking the margin, think of ways to get more people first
26:28 Next week: Using a calculator while recording a live podcast
27:13 Find out more and visit our previous episodes at www.davidversusdavid.com
27:33 Visit us at facebook.com/davidversusdavid.com
27:40 Leave us glowing 5-star reviews in iTunes
27:47 You can also visit our personal sites. David Counsell’s www.infernopromotions.com.au and David Pritchards’ www.d10solutions.com
27:50 Goodbyes!