I feel like I say this a lot but there can be some fundamental insights that lead you to guide your business a little differently each time. This is one of them
I had a chat with some clients a few weeks ago, they were putting down their agenda and new plans. The sort of plans that lead to meetings and boisterous gung-ho about what the new year will bring. I joked that it was the sort of plans that gyms are run on at New Year.
They wanted to double the number of clients and customers that they had next year.
Whilst that sounds very do-able to some of you, and some of you have close relationships with some clients that mean that doubling your clients may mean attracting 8-10 new clients, whereas some online businesses could be 2,500 plus for their client base.
We had a chat, dug in deeper and I think I showed to them one of the main reasons they hired us. Not simply because we’re awesome at managing their online presence, but also that we have a solid business background, coming from managing and growing businesses of all sizes.
The five “why’s”
I like to ask “why” five times, to dig in to what people really want. This applies out with business as well, you might want to try it the next time you set a goal.
I want to double my customers. Why do you want that? Because then we’ll have a bigger business? Why do you want that? Because then we’ll e more stable having a bigger customer base… it can go on and on but effectively, like most businesses they wanted to have twice the amount of customers so that they had twice the amount of money and revenue (roughly speaking).
I asked if that would also give twice the amount of headaches. Probably. Twice the amount of administration. Undoubtedly so. You see where I am going with this point…
So I showed them something that really opened their eyes.
Let us play with the numbers.
You’ve got 100 customers, each paying £100 for your product every 30 days. This tells me that you have £120,000 revenue every year.
I want to increase my customers by 20% – much more workable. So I now have 120 customers, admin friendly, no need to double your own workforce to handle it all.
I also want to increase the price by 10%, to £110. Very admin friendly, just change a few numbers and voila.
I’d also like to see if we could decrease the customers buying cycle from 30 days to 21 days (this means instead of buying 12.16 times in the year each customer will buy 17.4 times in the year).
Now let’s run those numbers again.
120 customers, buying at £110, every 21 days. Your revenue goes from a healthy £120k to £229,000. Not bad for setting goals that are very reachable.
We’ve already put in place some mechanisms and automations that will help with this. We’ve redesigned shop pages as well so that we have recommended and ‘frequently bought with’ items below the items they are purchasing.
So, when you’re making plans for the road ahead don’t only think about the price, there are more things you can do to increase your revenues that are more easily scaled.