Most every business owner knows the easiest and most cost-efficient sale is to a current customer. The customer already knows the business, they trust them, and like them… all the ingredients necessary to make a sale. Getting more transactions from current clients is a way to skyrocket your profit. Yet, most business owners make no discernable effort to do so.
Let me give you an example of how one no-cost idea can lead to a 22% increase in pay for a small business owner that wants to take the time to get tactical in their business.
Take a Florist for example: The Florist sees most men only a few times per year… wife’s birthday, Valentines Day, Anniversary, and Mother’s Day. Yet, the Florist typically makes a sale on only one of those occasions, not all four. The Florist typically doesn’t take the man’s name or email address for further communication (like a drip campaign) and sales opportunities. The Florist makes the sale in front of them and hopes the man comes back again in the future.
That’s what is called a Linear sale. And it’s pretty typical.
Unfortunately, this is a prime example of linear growth or decline most small business owners are also stuck in.
While we deal in exponential growth, the scenario I’ll explain below is only one very basic element of exponential growth. Let’s see how it plays out for a Florist using some industry averages.
What would happen if that Florist offered a VIP package that automatically sent flowers to the men’s special someone four or five times per year covering all the dates important to her (plus maybe mail a signed card or email an e-card or send a smaller bouquet AUTOMATICALLY for those other occasions so it’s never late or forgotten) but the guy pays only once – annually? Or, he could make 4 quarterly payments, tapping his credit card automatically.
Not every guy would buy a $400 VIP package, but that’s not the point. Say two out of ten agreed to participate in the Florist’s new VIP Plan. That’s 4, maybe 5, more transactions per year with no marketing costs. What if the Florist saw 100 men walk-in to the flower shop on each one of those special occasions and closed 20 on on a VIP package each holiday?
So, 400% to 500% increase in that category of sales simply by being prepared and asking.
The average margin for flowers is 75%. Say, hypothetically, the Florist sold these VIP packages at $400 each. That’s a gross profit margin of $300 on each package. That’s $300 x 80 (20 men X 4 occasions = 80) new VIP packages or $24,000 annually.
At an average net profit of 20% of revenue, that’s $6,400 annually. While not huge money, when you consider the average Florist’s income is $29,195, that $6,400 profit amounts to a 22% pay increase for the owner.
I’m pretty sure a Florist making $29,195 per year would jump at the chance to make $35,595 if the cost to do it was $0. This is just one simple idea of many that costs absolutely nothing to initiate. All it takes is a little thought and preparation.
Additionally, as these holidays are recurring, so the income will also be recurring.
As mentioned earlier, this is just one example of how to grow your business exponentially. When you add in cross-selling (“Would you like fries with that?”) and upselling (“Would you like that super-sized?”), now you’re impacting multiple areas that compound growth.
McDonald’s saw how simply asking, they sold more large fries and more large drinks simply by asking – adding billions of dollars to their bottom-line. If a sixteen-year-old kid working the counter at McDonald’s can do it, so can you.
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