Guide to making Profit
LEADS x CONVERSION RATE = Number of Customers
Average Sale Price x Frequency = Turnover
Turnover – Costs = Profit
Things to consider which influence the above elements
- What does your business plan say you will be doing?
- What are your key performance indicators?
- Is it clear who your target market is?
- Is your marketing going to people who will buy your products or service?
- Which of your marketing works and which doesn’t?
- Do you need to change your marketing mix to keep up with your target market?
- What is your Unique Selling Point?
- How many potential customers turn into paying customers?
- Why don’t more potential customers turn into paying customers?
- Are you the cheapest or most expensive in the market and what message does that send? Can you live up to your customers’ expectations?
- How often do you increase your prices?
- What is the cost of acquiring a customers?
- How many times does a customer buy from you and can you get them to buy more and more often?
- Do you give your customers a great experience?
- Do you know what you are getting for the money you are spending and when did you last review all your costs?
- Find a mentor to help keep you on track
- Keep learning, your marketplace is continually changing and you don’t want to get left behind
- How much do you spend finding a customer (your time is also money) and what is their lifetime value (amount spent x frequency p/a x average no of years remaining a customer). Would it be worth investing more in finding customers?
- How do you know when you have lost a customer? And do you know why?
Mark Fordham
Business Adviser
