Today we are facing massive challenges, but also massive opportunities. You can double your profits this year - if you have a clear idea how to ... and then go ahead and do it. How do you do that? Well, let's take a look.
{This blog is my interpretation and expression of a webinar put out by Chris Cardell of Cardell Media. If you haven't already, I’d suggest going to his website and signing up. Follow what he is doing. Learn from him, he outputs a lot of free material. https://www.cardellmedia.com}
Last year, 2022, Cardel Media had their best year on record, with a huge increase in customers. They were doing exceptionally well, and their clients were doing exceptionally well too. So to say everything in the economy is abysmal is simply not true. Challenges? Absolutely, yes. But do things right, and the opportunities are exceptional too.
You’d think it would be the worst time in history to be in business. However, this coincides with a perfect storm of technological opportunity. It is not that you can’t thrive, rather that you don’t know how to thrive. That is what we are talking about here.
#1 The model for doubling your profits
There are only 3 ways to grow a business:
Increase customers - though this is the hardest and most expensive way to do it
Increase the average spend of a customer. How do we do this?
Increase prices
Get people to buy more when they do buy from you. Eg, don’t just sell a bag, sell a bag and a scarf
Increase the number of times people buy from you. Get people to buy 3 times a year, rather than just 2 times a year
Selling more to existing customers is key.
Very few businesses make a fortune from selling to new customers once. Profits lie in the long term relationship. Sell more to each customer over time.
Looking at the 3 ways above, if you can increase each by 10%, you don’t just get a 10% increase in sales. It is more like a 30% increase in sales (3 x 10).
In most recessions, businesses on average take a 30% hit in sales. The problem is that most of them are so close to the edge anyway, that this kills them. We need to do better.
100% Model
Lets say:
increase customers by 30%
Increase average spend by 20%
Increase re-purchases by 30%
This is achievable, and by doing so you will get a sales increase of 100%.
To increase sales by 100% does not require increasing customers by a 100%.
Also, you have to avoid being sucked into all the negativity around us. Be realistic, yes. But it is not all doom and gloom. Simply working harder is not the answer. You need to be working smarter.
#2 Set your 2023 target
This is a significant one. He suggests you should write this down, physically, on a piece of paper. Think it, make it concrete. Then keep it in mind as we continue through this. He is not a fan of big goal setting, like the “In 5 years I’ll have a boat” kind. Too much can change.
Rather, have a financial goal, and be specific about it.
Specificity is significant. If you go into a New Year with a goal like, “I need to do a bunch of stuff” Great, but if you reach the end of March, and things aren’t going well, and you’re having a hard time - what are you going to do about it? What change do you need to make?
Compared with an example of, say, “I have an income of £200k, and aim to increase it to £400k”. Again, if you reach the end of March, and things aren’t going well, and you’re having a hard time - what do you do? Well, dig into the specifics of the plan and get to work. It allows you to alter plans and behaviours to keep on track to hit your target. This comes from being specific in your goal, and having achievable, measurable steps to get there.
{So, write down your number, an initial financial target for 2023. Wherever it is. Go on, on a piece of paper, write it down.}
Another significant part of this, remember, your beliefs of what is possible will significantly determine what the outcome will be. If you base your goals on what others are doing, you will most likely under perform. Your beliefs are a big, big piece of how your success will unfold.
#3 Double your traffic - double your profit
This is purely about how you get customers. Your website plays a key role in this.
Hence this is all about TRAFFIC and CONVERSIONS.
How do we get more traffic? There are many ways, but today there are three really significant ones. Chris Cardel is running a very successful agency, with a large number of very successful businesses. He has first-hand visibility of what is working and what is not. This is his opinion.
Instagram. 2022 was the year of Instagram. In the past, it was thought that Instagram was primarily for visual businesses. This is not the case. It is for everyone. It is about building a following of people interested in what you are doing. If you are not using Instagram, start using it. (He isn’t a fan of SM, but recognises how effective Instagram is. People are generally genuinely interacting with you. One aim is to build your following. Get a strategy for building and promoting this. Follow lots of people, interact with them, share and comment. Start to build followers. Secondly, plan much more regular posts. Consider 3 or 4 posts a week. Instagram is big, and a part of it is to send folk to your website.
Email. People don’t think of e-mail as a source of website traffic. But if you have a list of customers, e-mail is the number one way to get traffic and sales. It is often radically overlooked. He is changing the advice he gives to customers. His current advice, which he fully recognises will freak people out - send daily emails. A common pushback against this is, “I don’t want to bombard customers.” But, consider. Once a day might look like bombarding them. However, from the customer's perspective, they get 100 emails every day anyway. If one of those is from you it won’t matter to them. Most won’t get opened anyway. With open rates at 20-30%, and you send 1 a month, odds are it won’t get read. Back in the olden days, in the early days of email, email was comparable to direct mail. Most would get read. Today, very few get read. Email advertising today is now more like broadcast ads. To be effective, it has to be more. When we received 10 emails in our inbox, and there were many from one person, it might have been annoying. Now, e-mails are just ignored - and will get looked at every now and then.
GoogleAds. This is top of the list by miles. If you haven’t got Google Ads going for you, you are not realistically in the game (and here this means Google Ads, Banners, Youtube.) If you take Google out of the picture, who is left? Not many. Facebook is at war with Apple and effectiveness is way down. If you look at all the really successful businesses, not one is not on Google. Google is complicated and doing it effectively is a challenge. AI makes a big difference (see later).
#4 Customer Ringfencing
This is your ultimate recession proofing strategy. Imagine we are coming out of the recession, and your business is in a strong position. What will have led to this? Customers will have bought from you, stayed with you, and bought from you more frequently. You have to keep your customer base buying. You cannot (unless you are new) just rely on new customers. Getting customers is expensive, and you can't get around this. You have to nurture existing customers.
Pay attention to looking after and nurturing your existing customers, especially your VIP customers, as if your life depends on it. And it does.
How to do this?
E-mail. And do it daily. Not sell, sell, sell every day. But advice and tips. Personal information. The best way to ring fence your customers is to turn the business relationships into a personal one. Tell folk about a great movie you saw, or something interesting you did and wish them a nice weekend. Will that sell more? No. Will that affect your relationship? Definitely. Build personal relationships.
Some customers can’t buy right now. There is nothing we can do to persuade them. But that does not mean they will never buy. Give them time, and keep the relationship going. When they next want to buy, who will they think of first? The business who stopped communicating over the recession, or you? Another aspect of this, your customer list will also contain people who are completely immune to the economic woes. In any economy there are individuals and businesses, and some of them will be completely financially secure. You need to communicate with them separately. Make the best of your VIPs and top spenders. Hence you need a higher price version of your product. Remember the 20-80 rule, 80% of income comes from 20% of your customers.
Build a deep, personal relationship with those VIP customers. What do you do with a good friend that you have not seen for a while? Go see them, visit them. Invite them somewhere. We are aiming here to increase the frequency of customer send. Also, you need to have something to offer your top VIP customers. If you haven’t got one, get one.
If you only did this, it would make a major difference to your 2023.
Consider your competitors, are they doing any of this? Probably not. Now at least you know how you can double your profits for 2023. You have a huge advantage.
#5 New models of online sales
There are two completely new models of online sales. Basically, there are two models of generating sales:
lead generation - your CTA is to get folk to phone you or contact you.
E-comm - you sell stuff to arrivals on your website
For both of these, there is a new model being used by people who are excelling. What was working even two or three years ago is no longer working. Technology has changed.
Lead Generation model - AI and the inbound call
The new way here is taking advantage of the massive capability of AI (using the power of Google / FB / Ig). The crux of this is leveraging the power of AI to find the best customers for you and show your ad to them
The old way of filling out forms etc and then you get back to them no longer works. Chasing folk on a mobile is hard. Increasingly, people don't answer their mobiles unless they know the incoming number. Hence you can have lots of leads, but you can’t convert them. At this point, pay attention to your website traffic metrics, lead metrics and your conversion rates. Those will show you how your website is performing.
Look at your website device stats. In general, 70% of visitors to your website are using a mobile phone. They are looking at your website with a phone in their hand. It makes absolutely no sense to ask them to fill in a form, and then try to phone them back. Ask them to press a button and phone you. The main CTA on your website should be “phone me”.
Robert Ringer, “you can have anything you want in life” Yeah, but add, “...if, you're willing to pay the price”. You may need to increase your phone handling capacity.
E-comm model: AI and reversing your shopping cart abandonment
In 2015, Google introduced its first AI into its search engine technology. Ever since, AI has been improving. Today, if you are selling training shoes, Google won’t be looking for people who are looking for training shoes. It will be looking for people likely to buy training shoes. This difference is massive. Google Ads, or Pay Per Click is much more sophisticated than in the past. Setting it up effectively does require expertise. But done well, it is hugely effective.
Of course, getting traffic to your website is half the task. The other half is to convert those visitors effectively.
One setting in the configuration of GoogleAds is PERFORMANCE MAX. This is a game changer, and you really need to understand it.
The cart Abandonment Rate (AR) reflects the number of people who start the purchase process, but abandon it before completion. Average AR is typically between 50 to 70%. This is remarkably high. This is an area that you have to get obsessive about. Reduce this by half, you double your sales. You need to understand why it is happening and fix it. Maybe reduce the number of steps or user actions required, or maximise free shipping, or make returns easier. Reducing Abandonment Rate is critical. Once again, it does not mean you have to make a huge, difficult change here. Small manageable steps, small increments to improvement.
A massive benefit of Google, is that you can get in front of people who are still willing to buy, and have proven it with their search string.
#6 Multiple Marketing Approaches
This remains a crucial question. How many methods do you have to get customers into your business? Most businesses would say one or two.
Every business will have their favourites. And maybe they have done very well with those favourites, so why bother rocking the boat. When economic times are good, maybe it is quite fine to just have a few methods. But that does not lead to resilience. What will you do if or when economic tides turn against you? If you rely solely on referrals, or word-of-mouth, and suddenly new customers from referrals dry up, what do you do? Maybe each customer is telling two or three or four people about you, but if those two or three or four people do not pitch up because they are all struggling financially or are scared, your referrals fall off a cliff.
To be resilient, as a business, you need multiple sales and marketing methods. Even if you are doing okay on a few methods, if you implemented more methods how much more could you do?
By increasing the number of marketing methods, you can significantly increase sales. The more methods of getting customers you have, the better placed you are to ride out any recession.
Obviously there is a cost to this. Bear in mind you don’t have to do it all at once. Maybe test one new method every month. Test it and see if it works. Do this for a year and you’ll have tested twelve methods. Most likely, at least some of them will have worked.
Some examples of marketing methods include
Website conversion optimisation
Google Ads
Remarketing, get back to all your customers
Email marketing
Instagram
Advertising on FB/Ig
Youtube Ads
Telephone (this used to be the most powerful way)
Text marketing
Direct mail, send postcards
As you increase the number of methods, mix up digital and no digital.
In Conclusion
Doing this will help you to thrive in 2023, irrespective of what is happening around you.
A significant point here is around who can or will help you with this. Who has the expertise to do it for you, and at what cost? These AI platforms have become complex, and using them correctly and effectively is not so easy. Finding these skills is also not so easy, either. In the context of Chris Cardell’s webinar, his angle is to get you to sign up with him, and he can do it all for you. If you can, and if it is right for you, go for it (and, no, I am not on commission.)
Otherwise, it is useful to hear what an expert in the field has to say. Maybe read this again, and take away something, implement something to improve your business. Any small improvement you can make will help. And big progress is made by lots of little steps, all heading in the same direction.
Investing in some of these will cost you. But equally, not investing in them will also cost you. By how much do you want your business to grow, and how much do you want that growth? All of this goes into the pot of how much to invest and into what.
Here is my summary takeaway, a handful of things that I think would be especially useful for anyone with a business.
Really understand the 100% model of doubling your business. Understand that to increase sales by 100% does not require increasing customers by a 100%.
It is significant to have financial targets for 2023, and a strategy of how you will achieve that. In the absence of goals and strategy, it is easy to drift, easy to expend a lot of effort and resource and not move any needle forward.
Understand the significance in today’s market of Instagram, emails and GoogleAds, and the advantages of leveraging AI. Also, remember Linked In.
Understand the significance of your top spending customers, what that means to your bottom line, and ways to effectively engage with them.
Recognise the number of different sales and marketing methods available to you. Consider the number you are actually using vs the number you could be using. This does not have to be a big, disruptive thing. Make small changes and test it out. Get better in small, manageable steps.
May 2023 be your best year yet.
If you would like help with any of this,
or just like to discuss something raised,
contact me.
Dale.Spence@GenesisGRC.co.uk / 0777 560 4378