10 common profit leaks in small businesses
If your bottom line could do with a boost, it can often be far more effective to plug some profit leaks than it can to plough your cash into doing something wholly new.
In no particular order, here’s a run down of 10 leaks we see in small businesses almost every day:
1. Poor on-boarding:
The first few minutes, days or weeks of using your product or service are essential if you’re going to reduce customer defection. Having a smooth transition from sales into service that makes it easy for customers to get started with your products and services is key to customer retention.
2. Forgotten customers:
Your customers are other people’s prospects. Just because you’ve taken their cash does not mean you’ve got them forever. Keeping in touch with your customers in a friendly and helpful way will increase retention, cross-sell and up-sell.
3. Low impact marketing:
Marketing that nobody notices isn’t worth a penny of your hard earned cash or a second of your precious time. If you’re putting something out there, make sure it stands out
4. Information overload:
Giving someone too much information too soon will often turn them away. It can feel like a bit of slap in the face. You’re much better off having a trail of steadily increasing quantities of information for buyers to work their way through.
5. No proof for your promises:
If you make a promise of any kind, you need to back it up with some evidence. A customer quote, an appropriate case study, or third party review, placed alongside your product literature will help keep people in your pipeline.
6. Someone puts them off:
A person’s ready to buy, then they turn to their boss, their wife, their golf buddy… who puts them off. You need to identify your buyers’ influencers and do what you can to keep them on-side.
7. Information in the wrong format:
If your buyer has asked their PA to print a “read on train” file and your material doesn’t look great in hard copy, you’ll look poor by comparison.
8. An unanswered question:
Every time a customer has a problem or a question, you’re effectively winning them again. Because, if you can’t answer it, someone who can is never usually more than a click away.
9. Too slow to respond:
If a sales call or email comes in, the buyer is usually investigating more than one potential supplier. Leave it too long and someone else may already have got their sale.
10. Too fast to advise:
Over eager sales people can often suggest a solution before really understanding a problem, or rich commission on a specific product can lead them to advise something that’s not quite right. Slowing down, listening more, can often pay off better in the longer term.