Some of what most business owners do is sit around and wait for business to come in or for their phone to ring (which is the absolute worst option). Others thrive basically off of referral customer, client, or patients as their income. The latter is great, but its only one part of the equation. And (heaven forbid) the economy goes down the tubes in the next couple of years, these business owners who rely on one strategy to bring in business have nothing to fall back on to supplement their income when things get tough.

Getting a new customer, client, or patient is one of the most expensive things you can do in business. Actually, it’s 4 to 7 times more expensive than just keeping one longer instead of going out and finding new ones. But if you’re ready to start attracting a higher amount and a better quality of prospects to grow your business, then listen up.

I’ve probably already covered somewhere on this blog about how prospects choose a provider when they’re shopping around in a marketplace. And if you’ve watched my video on this, you’ll pretty much know the deal. They’re not thinking about your business specifically. Heck, they’re not thinking about you at all. When a prospect is in the early stages of buying, what they need/want is in the back of their minds. So when they see an advertisement that specifically gives part of that to them, which legitimately contributes to the want, need, or desire that they’re looking to quench…then you officially have a prospect turn into an interested lead, who is tuned into your business.

Whatever or wherever the value is in that you offer, is how you should market to your potential customers, clients, or patients through lead generation. If you’re a contractor you can give out a free report that helps them decide how to get around tricky, sketchy, unreliable contractors, if you’re a financial professional or accountant you can give out an audio on how to manage your finances in a certain area or save on taxes, or if you’re a lawyer you can give out a video or dvd on how to re-structure a will or tips on filing for bankruptcy.

The bottom line is that when your prospect sees what you have to offer, they may or may not be ready to do business with you that instant, but they eventually will be. The longer you keep sending them helpful information after they show interest, the higher the chances  you have of getting them as a paying customer, client, or patient. So when they are ready to buy, the only choice in their minds is a provider who has already given them something of value…which in turn creates attraction (for you if you do it).

Its best to have more than one way of incoming business for continued and increased cash flow for your company. And the most important part of generating hot leads who are interested in your business, is staying in front of them once you’ve reeled them in. That’s the name of the game. If you stop with their newsletter, e-newsletter, blog posts, videos, etc. they’ll simply tune out and may end up with another provider after you’ve done all the work on pre-selling them.

The fact is that most business owners only pay attention to the prospects who buy…and couldn’t give a rat’s ass about the ones who don’t buy immediately. Well the truth is that 50% of people who’ve shown an interest in something buy within 18 months, and 15% of those prospects buy then and there. There’s a massive chunk (the majority) of the market share that doesn’t buy right away, who are being ignored. So let the systems you have or will set up in your business accommodate your new leads. Just paying attention and following up with prospects that are interested can make a HUGE difference.

However, you know you can be doing better, and aren’t sure how to go about it or where to begin.

What now?

First, you have to think from the perspective of your typical prospect.

When they’re shopping around in your market, or going through your sales process, think about it: they’re going only going to interact with one area of your company at a time–whether its an advertisement…to actually talking to someone from your company over the phone.

These interactions are really all they have to judge your business off of.

So if you could figure out a way increase overall efficiency of your entire sales process by increasing your prospect-to-client/patient conversion rate, would you do it?

Most likely you would…which brings me to my main point of this blog post.

You should start tweaking and testing all of the interactions, or “touches” from your company to your prospect to compound and make a large end-result.

The idea is to design your selling process like a “greased chute”, to seamlessly convert your prospect into a client, customer or patient efficiently as possible.

This is done by delivering enough value over a certain period of time to invoke enough comfort and goodwill with your prospect for them to trust you enough to do business with you.

This concept works primarily off of the law of compounding. The law of compounding is essentially little changes, and modifications you make in separate areas of your marketing to each yield little increments in results, to all add up to a much bigger end-result.

For example, let’s say you own an accounting firm. Your sales process starts with various advertisements across a few different categories of media. From there, your prospect gets to your website and they opt-in for a free report and a subscription to your e-newsletter. After a week, if they don’t call you, you call them.

To start off, you would take an ad from your pay-per-click campaign and change the headline, or change the angle of the ad. Wait a week, to see if more people click on your ad..and they do 15% more. Then you change the headline on your opt-in page / opt-in form, and wait a week to see that you’ve increased opt-ins by 7%.

After that you beef up the offer you present to them through e-mail, wait 2 weeks, and see that you’ve increased inbound calls by 5%. Then you tweak the phone script to detail exactly what you’re going to say when you’re selling the appointment over the phone, which increases your appointment setting rate by 20%. And then you work on improving your presentation, by packaging, and upselling your suite of services for more value to your client to increase your closing rate by 20%.

As with anything in marketing, testing is critical. So after you tweak something in an area of your business, it’s important to not touch anything else, and then monitor your results. Otherwise you won’t know what changes effected your outcomes.

However, you’d actually want to actually tweak your selling process in reverse order (it’s easier just to lay it out like this just for explaining purposes).

In terms of growing your business…before you even begin to optimize your selling process, its prudent to make sure that you’ve optimized your client, customer, or patient retention rate as well. Why? Well what’s the point bringing in the a higher amount of new business if you can’t hold on to those new patrons? Learn more on that here.

This is only an example, but when you add up the theoretical numbers…you’d see quite an increase in your business from small changes over the course of only a few weeks. The law of compounding in business is subtle, yet incredibly powerful.

When you’re thinking marketing, you’re probably thinking of the act of placing an advertisement somewhere, maybe a magazine…billboard, or search engine.

Maybe you think of running an entire special promotion for Valentines Day or Black Friday or something. Or maybe you think of your website, the content you have on your website, your e-newsletter, your print newsletter, your brochures, etc.

Yes, all these things do count as marketing.

But where most business owners make a mistake is not realizing that when absolutely every single time any part of their company comes into contact with a client, customer, or patient, it’s marketing. All aspects of everything you do, or ever will do with a client, customer or patient is marketing.

Every time they see your ad, they call and talk to someone from your company, they come in to your place of business, they get a thank you or reminder card, they get a newsletter, they get an e-mail, etc….all of that counts as marketing. Even the small things–the condition of your carpet in your office, the signs outside your business, your logo, even the parking spots you have for your clients, customers, or patients.

In reality, you’re not really in your separate industry, or sector. Truthfully, you’re in the business of marketing. It’s your business to know what your prospects want, and to sell that to them in an value-based, educational fashion.

In my last blog post I wrote about cleanliness in your fixed place of business. That is HUGE in your marketing which is really what caused me to set off this next blog post. Your clients, customers, or patients will feel uncomfortable in a messy, dirty, or unsanitary waiting room,  lobby, or office.

It’s good to be conscious of the small things, but it’s wise to be able to distinguish between the subtle things that matter and the insignificant things that don’t matter much at all.

Cleanliness = good!

Logos and branding = not that important.

It’s more about the value you convey and overall comfort you invoke in your prospect to get him or her to trust you enough to do business with you. Not how cool your logo looks, or making sure you put photos of yourself in your yellow page ads.

And there’s people who will fight me on this, because logo graphic design and business image branding is what they do to keep their sense of significance in this world, professionally. Yet branding doesn’t work. It never has…and is next to useless as a business building strategy.

The only way branding could ever have any type of impact is if it is coupled with Direct Response Marketing. Which is essentially the type of marketing any smart business owner should be doing. The type that requires some sort of action to yield a type of result, which is measurable and quantifiable.

That’s right, so you actually know if your promotional efforts are working for you or not!

Branding what advertising agencies sell you to “get your name out there” and get your business more exposure with no promise or guarantee for results. And when no tangible results come in, their list of excuses is never-ending, usually full of additional different ways to brand yourself further on different media.

When branding does “work”, you’ll find that there’s been a direct response campaign(s) running at the root cause of a company’s marketplace awareness, authority and prestige for a good amount of time. Unless you’re a paradigm-shifter and pioneer incredible innovation like Apple of course.

There are certain exceptions for massive brands like Coke, Nike and Apple…who also have bottomless advertising and promotional budgets.

But it isn’t a plausible way to grow a business, especially for small business owners who have limited funds to allocate for marketing to begin with in the first place.

So it’s best to focus on your efforts on direct response, yet do it in a way that is informative or educational-based that truly conveys value to your prospects before they even hand you any cash.

An example of that is this blog. Every week I bring you content rich, educational, valuable information on marketing and how to grow your business.

You’ve seen me talk about releasing free reports, blog posts, e-mail autoresponders, and newsletters. That’s exactly what your market needs, except put your own flair on it and make it unique…so they feel like they’re communicating with an individual who cares about them–not some faceless corporation.

However, you must stay in front of your audience. You want to keep your presence eminent with informative, actionable, and educational content so when they decide if they need done you do, YOU are the go-to business.

And when you get your prospects warmed up and ready to buy your selling process can’t be rigid. It has to be designed like a “greased chute” to cleanly and effortlessly move your prospects over a certain period of time to feel comfortable enough to do business with you.

In my next blog post, I’ll expand on this concept. But if you haven’t watched my video on it then to that first because it’ll make more sense.

Get it here.

I’m talking about the feeling your prospect gets when they come into your place of business. The ambiance, and back story of your company.The customer service…and the presentation of your product or service.

Are you a local, mismanaged amusement park of your industry or are you a Disney World?

Disney has probably been the best company to date, to weave such fantastic experiences for their customers–who vary from small children to full-grown adults. It’s hard not to get a sense of “magic” in the air as you walk through any one of their theme parks…even if you’re a bitter old-timer. I was fortunate enough to visit Disney World several times as a kid…and if I were to go back now, I’d still be looking forward to visiting The Animal Kingdom.

Now I know Disney is far off from your small business, but there’s still much to take into perspective here. How can you take some of the elements Disney uses to accommodate their customers, and weave them into the experience your business provides?

The first element, if you own a fixed place of business is cleanliness. If a customer or client could walk into your business and easily see that you haven’t physically cleaned your store, waiting room, reception area, office, etc. then they’re going to immediately feel uncomfortable. This is probably the most fundamental element to serving clients, customers, or patients in your neighborhood. I know the most off-putting element to me is when I’m greeted with a dirty, messy, unsanitary area upon walking into a business. Honestly, it makes me want to walk right back out.

If you’ve ever been to Disney World, you’d probably notice there’s a good couple thousand people going through their parks every single day. Yet if you look at their walkways and landscapes…they’re virtually spotless. Why? Because Disney knows the importance of cleanliness, and has their cleaning crews working around the clock. Now if you’re guilty and haven’t cleaned up shop in a while…then it’s easy to let your dirty surroundings become commonplace and not notice them anymore. But when a new prospect walks in, that’s the absolute first thing they pick up on, and will largely affect their attitude about your business.

The second element is knowing how to accommodate, and thoroughly please your customers, clients, or patients to an extent of getting unsolicited referrals. This includes entering the conversation they’re already having in their mind, and providing their desired outcome. Or as Disney does it: drawing them into your world where it just so happens you know their deeply rooted frustrations, concerns and worries, and go on to resolve them better than they thought possible. This includes the feeling you get when you take a ride in one of their attractions and forget what’s troubling you back at home, or check into one of their hotels and get the same feeling from overcompensation. You’re there to relax, and they give you that result.

One of the best ways to transmute this element into your small business is customer service. Many businesses either live, or die based on their customer service. Yet customer service isn’t always exactly what you think it is. It isn’t just a person sitting at a desk, taking calls, scheduling appointments, or receiving angry, unsatisfied customers and either giving refunds or turning them away. Its a combination of the human capital AND the marketing you have set up for your business.

For an example, take a chiropractic practice. When you walk in to the waiting room, you’re greeted by a fresh vanilla aroma from an automatic air-freshener, hardwood floors with an area rug placed over them, soft jazz music, and comfortable chairs that look like they were taken from a living room furniture set.

There’s solid oak-wood tables throughout the room, with the practice’s newsletter on them for the current month.  On the freshly painted walls, there’s 2 flat screens with a looping educational program on, with a warm greeting from the doctor. It details what to expect from chiropractic care, and more helpful wellness tips like posture fixes, balance, etc.  After you check-in, you’re seated and before long, you’re seeing the doctor.

This example is just a sample of what type of comfort and accommodation your customers, clients, or patients should feel with your business…before they even give you their money.

When you start their experience off on the right foot with these elements, the competitive edge and unsolicited referrals will almost come naturally.

Some of these include your average client lifetime (how long your client stays with your business), your average client net worth (how much net profit you gain from a client) and your average client acquisition cost (how much it is to get a new client).

We talked about in my previous blog post, why these benchmarks are important. Mainly for the fact that if you don’t know how long a client is worth to you during the time they’re with you, then there’s no way you’d be able to tell how much you can afford to obtain a new client and stay profitable.

But in this post we’ll be going a little deeper down the rabbit hole, exploring exactly why getting new clients is actually LESS profitable than just keeping your current ones longer.

When you think of growing your business, what is the first thing that comes to mind? Probably getting new clients. That’s often the first thought most business owners get when they consider going about growing their enterprise.

But most business owners actually focus only on bringing in new clients to sustain their business and typically proceed to neglect their clients they currently have. Meaning they make little to no attempt to get them to come back in and visit. Maybe they’ll get a thank-you note, or a Christmas postcard in the mail, tops.

Here’s a few eye-opening facts: its 4 to 7 times more expensive for the average small business to get a new client than to just keep one longer. And if you can keep just 5% more of your clients than you can grow your business by at least 10%.

Think about that:

Its up to 700% more expensive to get a new client than it is to simply pay attention to the ones you have, and keep them conscious and aware that you still exist. That’s all you have to do.

Running around thinking you have to get more clients to sustain and/or grow isn’t entirely the most cost effective solution.

Why clients leave:

There was a study done a few decades ago that is still relevant today, that dictates the reasons on why clients stop doing business with a particular establishment.

1% die

3% move away

5% develop other business relationships

9% begin doing business with the competition

14% are dissatisfied with the product or service

68% felt they were treated indifferently, and felt the same

So that’s right, after a former client, customer or patient decides to bring their patronage to an establishment…there’s a 68% chance that they were rarely followed up with or weren’t communicated to at all after their money was taken. And if you’re like most customers (I know I am)…if you feel unappreciated, or not valued then odds are you’ll drift away from a business.

For example, say you have a bad pipe leak and are in need of a plumber to come and fix it…so you end up hiring the first one you call. After the pipe is fixed, and you’ve paid your invoice you receive a thank you card a few days later. It just so happens that the house you live in is old…and so is the plumbing system.

It’s eight months later and naturally there’s another leak. You haven’t heard or thought of the last plumber…so you might go back to the last one, or you might hire another one. Odds are in this scenario you’ll find another.

This study is still very relevant to your business…so the proof is in the pudding. If you bring in new clients, customers, or patients and don’t even say as much as hello a few months down the line…or only do the same ol’ mundane thank you card then you’re most likely losing a huge chunk of revenue that you could otherwise be holding on to.

But say if you had that pipe leak and after you paid, the plumber sent you a thank you card and also included a complementary subscription to their monthly customer plumbing newsletter.

Each month it arrives like clockwork to your doorstep talking about topics such as the easiest and fastest way to unclog toilets and unstop sinks, how to fix minor pipe leaks and the type of equipment to do it with, what to watch out for when hiring other plumbers, etc.

After getting this newsletter every month, there’s virtually no chance that you would think of another plumber the next time you have a serious pipe issue. And that’s what you should do with your business. You must stay top-of-mind to your current clients so they don’t forget about you.

Newsletters can work for any type of business, so implement them today. As long as you stay consistent, you can bury your competition and position yourself as the go-to provider in your area of expertise.

You’re smart enough to know that your business thrives off of its marketing…which equals new and repeat customers, that its best to set your sail and reserve some cash to guide you towards continued prosperity.

Honestly, this is a lot more than what some others will do…who don’t even have their sail up! They’ll open up shop, then sit and wait…based off the “if you build it they will come” mantra, sadly. They’re the same businesses you see open for a good month or two, and promptly shut down thereafter.

But having a marketing budget only limits your earning potential. I’ll get into why this is, but first let me touch briefly on some fundamentals.

One of the best things to do in your marketing is to keep track of what money is going out to what client/customer acquisition activities, and exactly what those activities are yielding you.

In other words, it’s best to track your ALL of your marketing–knowing what advertisements are bringing you which clients, with a general metric of how much their worth is to your business.

Knowing to test, and knowing how much your average customer / client worth is vital, but isn’t the only type of tracking you should be doing. It serves as a great precept to figure out ultimately how much you can afford to spend to bring in your ideal client.

I mean this quite literally.

Say you own a kitchen remodeling construction company, and your average client is worth at least $10k profit, that means you can spend up to 10k to acquire that client.

Now you wouldn’t want to spend $10,000 to acquire every client…because you’d be breaking even every time, but you get the point. Based on your personal expenses, you could probably spend $2500 – $5,000 comfortably to acquire a new client.

When you know how much your average client net worth is, you can start to see how it is relative to bringing in new clients…and even how having a higher average client net worth can be beneficial to you over your competitors.

Why?

Because you can ultimately spend more money to get them…which means buying a broader and deeper reach to your prospects, and spending more time in front of them with higher quality, better targeted, more strategic marketing material.

If you’re wondering on how you can increase your average customer / client worth, there are literally hundreds of ways. I cover a few on this blog about how you can do it through the means of your presentation / delivery, your packaging, and your pricing.

Marketing harder, more effectively, and more thoroughly to your prospective clients than your competition can, is essentially the name of the game.

And when you accomplish this, you generate higher quality, more qualified leads for your business to convert with–which automatically means in most cases, higher client net worth. It’s like a self-fulfilling prophecy.

So your average client net worth dictates how much you can spend on getting a new client…which essentially dictates what your marketing budget is going to be monthly, which directly determines how many customers you want each month.

Putting a budget on your marketing is basically putting a limit on how many new clients you’re willing to take in or putting a cap on how many dollars you’re willing to earn.

If you’ve created and utilized a direct response radio or mail campaign that has brought you success month after month 2 fold, what would be the best course of action?

Sit and keep doubling your money without testing it further?

Or reinvesting the profits of that campaign to more targeted radio stations / more addresses, honing your offer with bonuses or improving your mailer delivery to triple or quadruple your profits the next month?

Of course its best to choose the latter scenario, but you would never know unless you know how to test and track your marketing in the first place, so always start there.

If you haven’t read it yet, you can find it here.

More specifically, I was telling you why you should raise them.

Because pricing is such a critical and foundational principle of your business, I’m going to start this blog post by elaborating further.

But if you haven’t raised your prices since you’ve read the last blog post, then do it.

Right now.

Especially if you are in a price war with competition or you are in business with price buyers as your customers, clients, or patients.

In fact, price buyers are very few and far between.

90% of people who say that they buy specifically on price and nothing else actually don’t.

If they do actually only concern themselves with price, then your ultimatum is simple.

You cannot afford to do business with them.

I’m sure you might encounter a pure price buyer every once in a while.

Depending on the industry you’re in, they typically come from the frame of thinking that while they deal with your establishment, you will make very little to no money off of their transaction.

It’s their goal to make sure you make the least amount of profit possible.

People who buy purely on price are more costly to deal with in the long run, and here’s why.

They waste your time.

These types of buyers will say just about anything to get you to budge on your price. The most popular excuse for your price being too high is:

“So and so says I can get your product/service right down the street for $X cheaper.”

And this is almost always false.

They’re at your place of business because they actually can’t get it for that price.

If they could get it then they’re lying to you because they really don’t want it from your competition. They want the product or service from you instead, and they want you to lower the price for it.

Let’s say you heed my advice and raise your prices 5% to 10% and your sales volume drops.

Overlooking the fact that you’ve probably made it up in revenue at least to the same profit you’ve been turning, if not an increase in profit with less volume and less work…I’ll give you a few more reasons to raise your prices and avoid price buyers.

They complain.

They painstakingly try to find little cracks and little flaws in your business process believing if they expose these “shortcomings” they’ll pressure you into getting a lower price. Price buyers believe that if they get you to think the customer is unhappy, you’ll do almost anything to keep their patronage.

This is true, however not to this extent, with this type of customer, for this reason.

They expect the whole nine.

These types of customers are notorious for wanting the fulfillment of any and all the amenities that don’t necessarily fit the order description.

No matter how much value you give them disproportionate to what they actually pay, they will never be fully satisfied.

And if you do make the mistake of selling at a lowered price…

They will tell everyone how little they paid.

And they’ll be proud of it.

This can be incredibly detrimental. Especially if you thought you made it “a one-time deal” as a result of caving from their pressure tactics.

All of their friends, family and colleagues may come running to you expecting to get the same lowered price. The validity and integrity of your price, product, and positioning is now shot if you don’t honor these customers’ requests.

Raise your prices to avoid these types of customers in the first place.

There’s literally no reason not to.

Only one provider can hold the lowest price threshold…so having the second lowest price doesn’t hold any competitive edge at all.

If you can’t offer the lowest price in your market then don’t try to…matter of fact don’t even try to come close to it.

It’s like trying to fight a losing battle.

If you’re in a position where you think you have no choice but to cut your price there are in fact other options.

You can integrate a few upsells in your sales process to increase the average value per transaction. I covered this here, in a previous post.

You can change the presentation method, packaging and delivery style of your product or service.

Whether its gift wrapped, expedite shipped, prepackaged and sealed, preassembled, bundled with other products or services, air-mailed by F1 jet, etc. it absolutely matters.

For example the car dealership, Galpin Aston Martin, in Van Nuys, California in fact has a unique process for delivering their vehicles to their customers.

After a customer custom orders their vehicle and it’s made, they are called to come pick it up at the dealership.

They arrive at the dealership and are escorted to the delivery area…which is a closed bank vault. The salesman unlocks the vault and opens the door slowly to reveal their new Aston Martin inside waiting for them.

A door from inside the vault then leads to Club Aston, a high-class bar / lounge where the new owner gets an all-access pass to enjoy drinks whenever they want.

Aston Martin owners also get the privilege of being able to upgrade their remote-start key to their vehicle into a wristwatch for $30,000.

This prestigious upsell only makes their customers feel even more like James Bond himself.

Another great example of the packaging influencing the overall price of a product is a typical video game release.

If you’ve ever waited for a big named video game sequel to come out, then you’d know there are a few options in how you get the game.

When the game Halo 4 for Xbox 360 came out just recently, you could buy just the game alone for $59.90, or you could buy the Limited Collector’s Edition—which comes with upgradable multiplayer game content, and a 90 minute behind the scenes DVD of making the game…for $99.99 which sold out about a month before it was released.

Or you could buy the game with the console in the Limited Halo 4 Console Pack—with a specially decorated Xbox console, an extended console hard drive memory, and special controllers with LED’s in them for $349.99.

One more great example is bottle service at a mid to high-end bar or club.

If you’ve ever visited a high-end nightlife establishment, you’ll know that getting a few drinks can be a little bit of a hassle.

Of course this is after you manage to get in, and are not denied entry for an unknown, superficial reason.

Inside the crowded venue, seating arrangements are normally scarce. So in the club maybe you socialize with your friends and even hit the dance floor.

But you can count on while being in-between conversations and dancing you’ll be standing in a crowd around the bar for multiple extended periods of time…and then waving dollar bills at the bartender until they finally acknowledge you.

Then club owners invented bottle service.

With a reservation, you and your friends are allowed to access to a velvet-roped off area of the club with comfy couches, fancy artwork on the walls with ambient lighting, and tables for your things.

A host dressed to-the-nines takes an order for the group and any individual requests, then returns promptly with a few bottles on ice in fancy buckets, and classy glassware.

This is essentially a place to re-group with your friends and relax when one of their feet start hurting from dancing. And with a devoted host to cater to your group, technically your group wouldn’t even have to leave the booth area.

A mid to high-level bar or club is a place to see and to be seen. Many of them are snobbish, pretentious venues, actually.

Haha.

So after you factor in the increased perceived status you gain while being seen in the booth…most clubs begin pricing from $100 to $300 for cheap liquor bottles (at least).

All three of these examples are relevant directly to the principles in which you should consider pricing your own products and / or services.

Which is…

Raising your prices.

Do it. Today.

It’s without question the quickest way to increase your profits.

Here’s why you should:

Contrary to popular belief, the quality and function of a product or service being sold are not the only things that determines price.

There’s a little more that goes into why people pay a higher price for things—including status, the feeling it gives them, the experience or relationship they have with your company, what their neighbors or spouse will think, etc.

And depending on what type of industry you are in, these emotional hot buttons that your customer or client decides to buy off of will vary.

I could expand here, but what’s important is…

Price isn’t the deciding factor of how most people buy.

The business that offers their products or services the cheapest doesn’t necessarily win the most business or keep the most customers.

If that were true, there would only be one provider of anything for sale.

One branded car, appliance, and electronics manufacturer, one food supplier—one dental, chiropractic, and auto repair service provider.

If you think you will lose business because you raise your prices, you’re wrong. A slight increase of 5%-10% is something most of your customers won’t even notice.

And if a few do and stop buying from you as a result from it, the profit gained from your price change would cover the difference.

But in most cases sales will either stay the same, or go up.

Some business owners go the alternative route and undercut their competitors in price wars.

You do not want to engage in price wars.

Well if you do… then go ahead. But your days are most likely numbered in business.

And if you currently are, then you know how stressful and unnerving it can be.

When one business undercuts another, an undercut is made in return which starts a vicious cycle until the price is deteriorated and no profit is left.

And when you’re in business and you live by price, there’s always someone out there who can come along and undercut you.

It’s kind of like Charles Darwin’s theory of Natural Selection, or “Survival of the Fittest”.

Depending how large of a reach of your enterprise has, and how much capital you have to throw around to last at a low price determines how long you will last in a price war.

And if a competitor has more of the above two criteria than another…then the future would look bleak for you.

Don’t guarantee the lowest price in your market unless you can actually provide it…and on favorable terms.

A rare example is Walmart. They are able to monopolize their market because they were able to dictate their terms largely in their favor to get their products.

But until just recently, they have been contemplating raising their prices because of inflation—the price of everything has been going up except theirs.

So anyhow…

Even though people say and think they buy their products and services based on price and price alone…they actually don’t.

If that were the case then no one would ever buy anything but the cheapest car, the cheapest house, TV, computer, and clothes.

Everyone would be driving a Kia, living in trailers, and wearing potato sacks.

A world like this would be ridiculous.

And by just using logic you can prove that this is not the case.

Moving on:

Sometimes you may be undercut by a competitor.

So if you ever find yourself thinking about lowering your prices, don’t.

Instead, increase the amount of value that your customer, client or patient perceives to get as a result of doing business with you.

Increasing the perceived value of doing business with your establishment can be done through crafting an offer, in a myriad of ways.

Creating an offer that is irresistible to your clients is a surefire way to make sure that the small percentage of customers, clients, or patients that would stray away from you based on price, don’t.

And it will also help you bring in more.

When you position your offer as something that is worth much more than your clients actually are paying for it, they are more inclined to buy.

Here’s why:

Lots of people love to find deals.

When they find a purchase to make while believing the cost is way below than what it should be, they feel good about themselves.

They feel like they’re coming out on top, and they “took” instead of being “taken”.

Which is good. For you.

And them.

Especially if they are “price buyers”.

But largely because no one is necessarily doing the “taking” anywhere…the offer is actually worth its weight in gold.

It’s a win-win situation for both parties.

So there you have it.

I’ve provided you with more than enough business-altering information that can be effective immediately.

So I highly suggest that you begin taking action and implementing both tactics.

Raise your prices today AND begin thinking about how you can start crafting an irresistible offer to sell to your market.

Have they been moved as close to their desired solution or result as possible?

Because when a patron enters your establishment, you want to make sure that you’re giving them your absolute highest amount of effort for solving their problem, or meeting their needs.

And I might sound a little redundant here, but you need to understand this:

You assume the responsibility as a product/service provider to make sure your customers or clients have the chance to leave with the absolute highest result.

When you make sure you do this, it’s a win-win.

Your customer or client is more satisfied, and so are you because your profits are increased.

So how do you go about upselling?

Start by taking a look at what products or services you offer.

Could you improve them? Is there potential for a bigger and better result?

Can you upgrade any of them by adding more features? Could you enhance the result by offering an add-on product or service?

When you take the time to improve your product or service by creating a deluxe, gold, or platinum upgrade, or offering an add-on product/service—you give your customer or client the chance to get more out of their transaction with you.

And when you do that, you increase the average net profit of each transaction in your business.

When you make an upsell available to your client or customer base, on average at least 20% of your patrons will take advantage of the upgraded service, or add-on product.

For an example in retail, shoe stores like Foot Locker will routinely upsell their customers.

If you’ve ever shopped at one of their locations, you can recognize how they craftily yet effectively upsell their customers.

When you come in and decide on a shoe with a salesperson…immediately after they will offer you additional items such as insoles, shoe cleaning solution and brushes, shoehorns, shoe fresheners, even a pair of additional shoes for a discounted percentage.

Many of their customers find themselves making a more complete purchase and leaving with an increased level of value they otherwise wouldn’t have.

It is best to ask for the upsell right after a customer has agreed to buying something.

During this brief window of time, they’re mentally in a buying state or “mode” and are more likely to take you up on an added value product or service.

Let’s jump right in.

One of the biggest mistakes that I see the majority of business owners making still to this day is the fault of not tracking their marketing.

I might sound a little redundant but it is important that you get this fundamental engrained in your mind.

Since the last time I wrote you, I had a conversation with a prospect about his advertising and asked him the question:

“How do you know your advertising is working?”

His answer:

“You don’t.”

After finding his business in the yellow pages, (a dead advertising medium), I knew for a fact that his advertising wasn’t working for him and he didn’t know—but he insisted on sticking with said belief.

Don’t be like this business owner. Take the responsibility for your efforts of advertising, and track your results.

It’s obvious that you don’t and won’t know your advertising is working or not if you don’t know how to track it and refuse to acknowledge how to.

Not taking the time to learn how to do so would essentially be like just sticking crisp stacks of 20’s down the garbage disposal on the first of each month.

And furthermore,

DON’T, I repeat, DON’T advertise in the yellow pages.

Please.

Just because every other business you know of does it, doesn’t mean it works. Actually, that’s a good reason in itself not to do it.

It’s a waste of money. The yellow pages are entirely outdated—a traditional, analog, advertising medium of the 70’s, 80’s and 90’s before every computer and phone were linked together.

That’s right, the craziest thing was invented. The internet.

Virtually any fragment of information you could ever want is available at the drop of a dime, a stroke of a keyboard, hell—a swipe of a finger.

So when someone wants to find a pizza shop, a new doctor, a reliable contractor they’re not going break out their yellow pages book buried in their closet, and sift through it to find your business.

What they will do is a Google search, and choose a business from the first page listings on their smartphone or tablet PC without even getting up from their couch.

Sound believable? Damn skippy.

If the yellow pages aren’t thrown out immediately when they are received by their subscribers, they are surely stowed away somewhere and then never opened.

So when you do decide to advertise your business in effective mediums such as radio, PPC, billboards, direct mail, magazines, mobile, etc. make sure you use some of these relevant tracking tactics.

Continuing from last month’s list we have:

Tracking Method #3: Utilizing Google Voice

When you take out an advertisement, you need to know if it’s working. Google Voice is essentially a free phone number and voicemail service that tracks each call that is made to your business.

It’s best utilized through advertisements with a phone number as the call to action. This service has absolutely no cost for an account.

When a prospect calls the Google Voice number from the advertisement, you set it up so the calls redirect to your business phone.

To see your results you’d simply login to your account, and view from the interface exactly how many calls at what times of the day came from the advertisement.

So if you were to do a direct mailing of a postcard which has an offer redeemable only if you call your Google Voice number, you’d be able to track your results from your account specifically dedicated to that postcard mailing.

It’s that simple.

Tracking Method #4: Utilizing Google Analytics

Google Analytics is basically the go-to website analyzing and traffic tracking software for anyone who has a website.

So naturally this software works best when the call to action in an advertisement is to visit a website. Best of all, this software is free.

When you go to take out an advertisement, you would either create or identify a webpage that you want the traffic directed to. Then login to your Google Analytics account and start the process of tracking a campaign.

(Google Analytics is very user friendly and will guide you through the process.)

When it prompts you, take your target webpage URL and have it tagged by entering some information.

The tagged URL will come out looking something ugly like this:

http://joesplumbing.com/?utm_source=google&utm_medium=radio&utm_content=ad%2B1&utm_campaign=Ad

You don’t want a URL as long as this in your ad for someone to type into their web browser. You want something short and simple that is easy for them to type, and remember.

So what you would do is go to your web hosting account, create a subdomain, and have that subdomain redirected to your tagged URL.

Subdomains usually look something like this:

Buyersguide.Joesplumbing.com

Then put the subdomain into your advertisement and view your results.

Or…

If a subdomain isn’t simple enough for you, then you could spend 10 bucks to buy a separate domain name strictly for your advertisement.

Something like:

Plumberguide.com

Then under your domain management settings, simply have it redirect to your tagged URL.

If all of this sounds too techy for you, then just have your webmaster do it for you when you go to advertise.

This is still, very simple and if you take the required steps to track your marketing efforts you can potentially save yourself tens of thousands of dollars, loads of stress, headaches and heartaches.

Onward.

The next subject that I told you we’d cover is how to increase the value of your average transaction for no marketing cost.

Increasing Your Average Transaction Value

Listen up.

There are many variations of tactics to increase the amount of money your customers spend with you each time they visit your business.

And keep in mind—to do so, you don’t have to break the bank or necessarily spend any money at all.

All it takes is a little bit of thinking power and a drop of creativity.

Begin by taking some time to review exactly what result you offer your customers and clients from a value-based perspective.

When they come to do business with you, are they getting the absolute highest value attainable?

Can you expect them to receive the best result as well as the greatest benefits from your product or service for the money that they give you?

Because as a merchant, it is your responsibility to make sure that your customers or clients are receiving the most effective solution to their problem.

You are responsible for helping them achieve the highest form of their desired result, or helping them get to their most desired outcome.

If you were to do any less, you would be doing them a disservice.

When you look at it from this point of view, it’s easier to realize why it can be most ethical to get more money out of your customer on each visit.

You enhance the desired result your client or customer seeks to attain, thus increasing your profits.

It’s a win-win.

One of the most effective routes to do this is to start packaging your products or services for your clients or customers.

Take a look at all of your products or services that you offer, and identify which ones would go great together, to be sold for one individual price point.

Then take one service and decrease the price 20%, and pair it with another service at full price—but offer it at a single cost and put a fancy name on the package.

For example, a cosmetic dentist would create something like a “Glimmering Whites” package which offers enamel shaping and tooth whitening together for a single value-based price.

Another tactic that can increase your average transaction rate is to offer your customers a discount when they spend a certain amount of money on certain items.

This tactic can work great in retail.

The men’s clothing retail store, Express, has used it for years.

They offer their customers $30 off their $90 regular-priced purchase, or $40 off their $120 dollar regular-priced purchase.

This is essentially just incredibly raw value-based packaging for walk-in traffic. However it can be executed through direct mail as well.

If you want to spend the few extra bucks to increase your results, do a mailing of peel-off cards that fit in wallets, labeled with the discount.

And there you have it.

Two solid ways to increase your average transaction size without breaking the bank on additional marketing or advertising costs.

Stay tuned for my next post where I share the #1 way for any business owner to instantly increase their profits, also for no marketing cost.

It’s gonna knock your socks off!