How to avoid business failure?
Are you wondering how you can avoid business failure? If not, then it’s something that you should think about because business failure is always a possibility. Unfortunately, a lot of business owners in the world are surprised when their business fails. And by the time they see the writing on the wall, it’s too late to save their business.
There are a lot of things that you can do to ensure your business against failure. For example, focus more of your efforts on selling to your existing customers. 80% of your total business profits will come from sales from your existing customers, so you don’t want to exclude them from your marketing approach.
This is by far the fastest way to see more profits in your business. You can make money from these groups of people by simply mailing them a letter with an offer in it. And the bigger your customer list, the faster you will see immediate profits in your business. Once you see how well this technique works for your business, you will want to mail out to your customers marketing a different product once a month.
And this is the gist of how to make more money in your business right now. You could mail out a letter to your list and start to see more people walking into your store for repeat business by the next day. I know how important it is to go out and seek new customers, but you shouldn’t focus all of your efforts on this group of people.
What’s the point of acquiring a new customer if you’re just going to ignore them in the first place? Whenever you get a new customer, make it a point to follow up on them to further promote your products and services. Selling to your existing customers is the best way, in my opinion, to ensure your business doesn’t fail.
There are, however, other ways to ensure your business against failure. One way is by running a profitable front-end campaign. When I say “front-end,” I mean initial sales to new customers. You have a chance of being profitable on the front-end, and this income alone can be enough to push your business to the top.
To make the front-end work, focus on generating a lead. Each lead that you acquire is worth something to you – even if you don’t believe me.
You see, there’s something called the “lifetime maximum value” that is applied to all of your customers. All this refers to is the lifetime value that each customer is worth for you. So if the average customer buys from you more than once, and they average about $1,000 in their entire tenure of dealing with your business – then you have an idea of how much you can afford to spend to acquire a new customer.
This number is very important because it eliminates advertising guesswork. You know how much a lead is worth to you, and this figure alone can tell you how much you can expect to make each month – and it also tells you away to improve your income that isn’t readily seen, (more info on this will be taught on a different day).
With that being said, hopefully, you will use these ideas to stay afloat in your business. You don’t have to go out of business – simply adjust your marketing campaign to suit the marketplace.
Most small businesses fail for a variety of different reasons. For example, they may not have a strong marketing plan, their prices may be too low or too high, they fail to resell or upsell their past customers and clients, and they don’t have an effective system for bringing new leads into the door. Unfortunately, all of these things can cause a business to fail quickly.
But luckily, you don’t have to go out of business. You see, there are a few core reasons why you’re not having the success in your business that you’re dreaming of, and in today’s lesson, I’m going to share with you some of those reasons. Let’s take a look at reason number one for why most business owners don’t have the success that they’re looking for in their business.
Businesses fail because they don’t have an effective marketing strategy
What I mean by this is that you’re marketing to a group of people who can’t say “yes” to you. This is more than likely caused by wrongly identifying your target market and structuring your offer around a group of people who aren’t in your niche. I see this happen all the time. I have been guilty of doing this too.
I used to do direct mail heavily back in the day, but I stopped doing it because I couldn’t get sales. I would buy lists from non-reputable list brokers and spend a lot of time and money trying to get my campaigns to work. But my campaign had no chance of succeeding due to the poor list that I was mailing to.
If this has ever happened to you, I know how you feel. This is a mistake that you don’t want to make, so make sure you’ve identified who your target audience is, and then craft a campaign around these findings. Let’s take another look at why business owners fail:
Businesses fail because they don’t understand the customer
If you could read the mind of your prospects, how would you market your products and services? I know right now that if I could read my prospect’s mind, I would be rich by now. And I’m willing to bet that you would be rich too. But fortunately, I’m not endowed with the superpowers of mind reading. Yet even though I’m not a psychic, there are still ways to predict what your prospects are thinking.
The first thing that we know is that they have a problem of some sort. It’s your job to find out what this problem is and develop a marketing strategy on how to find a solution for their problem. 99% of the time, the solution they are looking for is very close to the product or service you have to offer.
All we know initially is that they’re going through some things that make it hard to live their lives. It’s your job to figure out what this problem is and how you can respond with an answer that can satisfy their needs. To start, one of the best things that you can do to help your prospects out is to offer free information.
Have you ever seen those lawyer ads on TV saying: “If you’ve been hurt in an on the job injury, give us a call at 1-800-000-0000, and we’ll mail you out a package that details everything that you should do next.” I see these ads all day, every day in my city, and I’m willing to bet that the lawyers who are running these ads are making a killing. You can do the same thing in your business.
Structure your entire ad around offering some free information. If you’re a lawyer, offer a free consultation or a free report of some sort. If you own a bakery, offer a free cupcake or free sample of any cake in your store. If you’re a doctor, offer a free initial consultation at your place of establishment. You can do many things to promote your business or practice – so, don’t give up.
After we have a good understanding of what your prospects want, it’s time to move on to the next phase: choosing a company to deliver the service or goods. Of course, you want this company to be your business. The key to making this work is to follow up on your prospects every month. Once they’re ready to make their purchasing decision, you’ll be the first person in their minds, which will more than likely lead to a sale.
Your prospects don’t want to feel bad about choosing you for the job, so offer a guarantee of some sort. It could be a money-back guarantee; it could be a “no fee if we don’t collect” type of deal, or any other thing. Just offer something for free so that you can get your foot in the door.
Businesses fail because they don’t make enough sales
When you get a lead, are you just sending out your direct mail piece once, or are you following up on these people once a month? Well, if you must know, most prospects will buy right away from you, but the small few who don’t buy as quickly are still good prospects that you should continue to contact. Again, this is an excellent way to boost your conversion rates at a low cost.
I would contact a non-paying lead at least 12 times (once a month) within a whole year. If, after a year, these people haven’t bought from you, then I think it’s time to let that lead go and focus more of your efforts on converting new leads into customers.
These two principles alone will help you to make more money in your business. Know who your targeted audience is so that you can pinpoint exactly what it is that your prospects want. And when you do get a lead, continue to follow up on thee people at least once a month – for an entire year. This is a great way to extract value from your list.
Never stop testing your response and see what could be edited or modified to bring you the highest conversion possible. And if you’ve already found something that works, run it over and over and over again until there’s no one left to market to. This is the best way to go about marketing your business.
Businesses fail because they don’t develop strategic partnerships to grow sales
Are you looking to incorporate joint venture marketing into your arsenal of marketing methods? If not, then you should. Joint ventures are a free way to increase your sales and profits without spending much money to get your message across. And in the offline world of business, people are starting joint ventures left and right.
Even though joint ventures are a beautiful thing, there are still some risks involved. For example, one thing that you risk when you do a joint venture is your reputation. You see, if you have a huge
customer list and you introduce them to another business’s product, you have to ensure that the product that you’re recommending is worth its weight in gold.
Otherwise, if the product is bad or just so-so, your customers will start to look at you in a different light. As a result, they will be hesitant to take you up on your recommendations, and it could be a downfall for you when you offer them products in the future. So you have to be very careful about who you recommend to your customers.
But if you have seen and demoed the product and have determined that it is exceedingly good, then, by all means, proceed with the joint venture. Nobody wants to be left with a shoddy product, so do what you can to ensure that the product that you’re offering is very good.
Another thing that you have to take a look at when doing joint ventures is whether or not the price is high enough that you’ll earn a significant bit of money from the deal. For example, if you’re offering $10 products, you will more than likely get sales, but you won’t make a lot of money from it. On the other hand, if the product you’re promoting is worth $100 or more, then this is something that you should consider pursuing.
I don’t like to deal with a product or marketing campaign that doesn’t pay huge dividends. Low-priced products will take forever to make a nice profit, but with a high-priced product, you can retire sooner rather than later.
The last thing you should consider with your joint venture deal is the commission size that your partner will get. Typically you should offer them no lower than 50% of the profits. You have to make this partnership worthwhile, so you should consider offering them a 60% commission on every sale made.
While all of these things could make your joint venture a hit, you must implement a bit of tracking in your campaigns. Typically, in the offline customer database, you will mail to, your partner will include a random name in the list to ensure that you’re not abusing your power. If you mail out to their list more times than you-two agreed upon, you more than likely will lose a potential partner, and some legal action may have to take place.
Only mail their list for the agreed-upon number of times. Hopefully, it will be a success, because if it is, they may consider letting you mail to their list again for additional profits on the table.