One of the important jobs of a CFO is to maximize revenue.
That may sound mercenary, but it doesn’t have to be that way. You can maximize around the parameters that you choose. Such as your values, aims and the impact you want to have. You ignore profit at your peril.
This is a long article because it is a compilation of 4 articles written over the last month. I am combining them with a synopsis of each and a link to the original, more in-depth article.
Delight
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The single most important thing you can do to maximize your revenue is to delight your existing customers.
When you focus on delighting your customers it changes the relationship you have with your customers and your business. Your efforts move away from what your business needs to what your customers need.
Delighted customers talk about you, attracting more people just like them. Your delighted customers will do the heavy lifting of marketing for you.
Delighted customers are more profitable. They are happy, not demanding. You know exactly what delights them, so you aren’t spending your resources trying to make them happy. They are happy to pay your premium price, because they want you to succeed so you can keep delighting them.
Talk to your Customers
What will delight your customers?
Research shows us that what business owners think is most important to their customers, is not what their customers think. Every business owner thinks price is most important. Mostly because conversations often are about price. Customers are more interested in being at least satisfied if not delighted. They are willing to pay more for getting more.
Think About a Delightful Experience you’ve had
We’ve all had delightful experiences in our lives. We become loyal customers to these businesses and we tell those stories. How does that make you feel? What would it take for your business to give your customers these kinds of experiences?
Think about a time you switched
Conversely, think about what made you switch from one business to another.
For the most part, it’s that you feel they simply don’t care.
Most people switch, not for any huge reason, but because they don’t feel valued.
Don’t be that kind of business. Whether we start our businesses from a passion we have, or we develop that passion because we started that business, lean into it! Be passionate and let your customers feel that passion. Let them feel how much you care about them.
Your Values and Virtues
Your business should and absolutely can embody the values that are important to you. By letting people know what your values are and how you live to them, you put a sign post in the ground so your tribe can find you. Never forget that your people are looking for you. They can only find you if you let them know you are there.
Pricing
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With conventional business accounting, there are five ways to come at pricing and it’s vital that you follow through with all five. Then, when you know where you stand, you can bring your heart and conscience into the picture.
The conventional ways are:
- Cost plus: use historical amounts.
- Industry standards: This is a way to check your pricing.
- What is your competition doing?
- Strategy: where do you want to sit on the spectrum of options? The price you put out into the marketplace says much about you.
- What value does your customer place on the solution you give them?
Value
What does value pricing even mean?
Value has nothing to do with you as a person. Value is in the eye of the customer and it is all about them. It’s about what they get out of interacting with your business.
You’re building a business that does good work in your community. This is best when you focus on increasing the value of your solution rather than simply decreasing the price. Sometimes the increased value comes from stripping away unnecessary aspects and focusing on delivering the exact results needed.
Alternatives
What is your customer doing now?
If people are happy with their alternatives there is no room for you. Think about your own life and what you are putting up with. What will make you take the effort to make a change when what you are doing sort of works?
Making a change means risk. What if it doesn’t work? What if it takes longer, or more effort, or it costs more? What do I have to learn?
Goldilocks
It doesn’t matter where you price, there will be people telling you your prices are too high, or too low. People are quick to say your prices are too high, because that’s easy to say. It’s rarely the issue, it’s an easy way to say no.
People will rarely tell you your prices are too low, they simply won’t work with you. If you aren’t getting the quality of customers you want, it could be because your prices are too low and people are willing to pay more, but only if they believe you are offering the level of quality they want. Your price is signaling to them that what you are offering is lower quality than they are looking for.
I’ve worked with many people who want to bring goods and services to their communities at prices that are realistic for people who can’t normally afford them. That’s a wonderful sentiment, except it’s not usually sustainable.
It’s possible to bring products to a community at a lower price, but you must get innovative in how you do it. Trying to do the same except at a lower cost is a fast track to failure, disappointment and bankruptcy.
You won’t get your pricing right from the beginning. It will take a bit of trial and error.
The dangers of pricing too low are that you will run out of money. The dangers of pricing too high are that you will set up expectations that you must fulfill. You must be very clear on the advantages of working with you. So these aren’t really dangers, but they feel that way.
Don’t make the mistake of thinking that lower prices make it easier to sell. You will always have to prove that your customers will get more value than the money they are paying you. Offering lower prices changes the way they perceive you, still putting you in a position of proving your value.
Price is not the issue
When someone tells you that you are priced too high, chances are that is not the reason. If everyone is telling you that and no one is buying despite valiant work at sales, then yes you are priced too high. Saying you are pricing too high is a classic excuse for low sales when what is really happening is that the owner is not putting effort into sales.
Getting ahead – doing good while doing well, long term life
You have to live with your pricing and it must be a part of your long term plan. You are pricing so that your business is robust and financially healthy. You have to stay around long enough to make an impact.
Your price must include all your costs. Too many business owners miss many of the costs of their businesses and end up losing money with every sale. One way to know if you are not covering your costs is if you feel like you are working harder than you should be as you are delivering to your customers and you still feel like you need many more customers. Another way to tell is if you can’t afford to hire someone to do the work, you aren’t pricing high enough.
There must be capacity within your prices for contingencies. Contingencies aren’t something that might happen, they will always happen, we just don’t know what they are yet.
I know you are thinking you will do that once you are more stable in your business; once you have reliable customers and a process and you feel like you know what you are doing. But it doesn’t work that way.
For real, you’re never going to feel like you are on top of your business. There will always be more to learn, more to refine, more to put in place to make it all work better. This is a long journey with unforeseen twists and turns. As you build your business, make your decisions about pricing with that long journey in mind.
Dance with your Customers
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Communications
Talk to your customers and make it easy for them to talk to you. You want a discussion; a dance; a give and take of co-deciding on the best value you can give. This is part of that dance. What do they want, what can you give, what do you give that they don’t want? You don’t want to waste resources on things your customers don’t care about.
You can’t do any of the following strategies if you don’t talk with your customers.
Your customers are a gold-mine of information about how to make your job easier. Your customers want you to succeed so you can keep giving them what they need.
The sale is just the start
It’s not enough to simply sell your thing, you want people to engage with it and succeed in solving their problem. That’s why you see many businesses put a lot of effort into the onboarding and engagement process.
Your people are looking for you. You help them find you and know they have found you by building trust by telling the stories of your delighted customers. Better yet, let your delighted customers tell their own stories.
What is most important
People make choices because those choices reinforce the story they have of themselves. The aspects of your product or service that reinforce that story are the ones that are most important to them.
Solve their problem
Your customers trade their money and often their time because they have a problem to be solved. Your job is to solve that problem. This gets complicated when your customer thinks they need one thing, when really they need another.
You need to design your customer’s journey to make it easier for them to use your product to solve their problem.
Customer appreciation
How do you feel when you see a business you’ve been with for years make a juicy new offer to new buyers? I feel like, “What about me, your loyal customer?”
More people leave a business because they feel unappreciated than for any other reason. Make your customers feel appreciated.
Spending resources on potential customers simply may make them feel better, while alienating your existing customers.
Spending resources on existing customers binds them more closely to you and gives potential customers more incentive to join you so they too can get those boons.
The best way to maximize revenue is to delight your customers and the only way you can do that is by dancing together with them.
Make it Easy to Share
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Your best marketing is to share the stories of success of your best customers. Even better, get them to share their own stories and the stories of others they know. In this article we will talk about how to do that.
Lead the way
Show people what to do by doing it. Tell the stories of your most successful customers so that others can see what that story might look like.
Never doubt that your perfect customers are looking for you. When they see themselves in the stories you tell, they will want to join in. Give them a way, or a call to action, with each post.
Model the kinds of stories you want your customers to tell and they are more likely to tell their own stories and the stories of others. Develop a template that is effective and helps make the job easier. Spend the time to do it once, then use that template for all the following ones. Document how you do it, then share that to make it easier for everyone.
Facilitate your customers talking to each other
Make a way for your customers to talk to each other. They will help each other have more success. They will learn about the success of each other and be excited to celebrate by sharing.
I have an online group https://business-owners-success-club.mn.co/ and I encourage members to talk to each other. We talk about what is important to us in the ways we design and build our businesses to be not only successful, but community minded.
I like to put on events where people can connect as well. https://www.meetup.com/Business-Owners-Success-Club/ I started with a bi-weekly Lunch & Learn long before Meet Up, and moved online when it made sense.
Give your people something valuable they can share. I have a whole course on the 6 Stages for Building Your Effortless Business here https://medium.com/small-business-academy. It’s free and helps immensely to overcome the overwhelm in starting a business. I encourage everyone to share it.
Applaud efforts
Derek Sivers has a great video talking about how important the first follower is and how, when you support them, it starts a movement.
How to start a movement | Derek Sivers
It’s hard for people to step up, so appreciate them when they do.
Make an online home
Make it easier for people to share and point to what you do by letting everyone know what you would like them to point to. Use whatever platforms make you comfortable keeping in mind where your people are hanging out.
LinkedIn works very well for me, so I make it easy for people to find me, follow me and connect.
People love to share their success. Help them!
Your Why
Your job isn’t to build a business offering more for less, but to build a robust, resilient business that will have an impact for many years.
Our businesses can be anything we want them to be. There isn’t one right way. So make your business be the best one for you. If it is, and you are attracting the best customers for you, you will delight them and yourself. How does that sound for a business?
