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A Little Goes A Long Way...
Sometimes we get so busy as business owners that we forget that it's often the smallest changes that make the biggest differences. For example, consider what a few small changes in percentage of returns makes in the following scenario.
Let's say you own a business with 1000 customers, and an average sale of $100 per transaction (assume the other "givens" as indicated)...
|
Current |
Number of customers |
1,000 |
Dollar value of average transaction |
$100 |
Average number of transactions per year |
2 |
Buying lifetime of average customer (years) |
5 |
Total income |
$1,000,000 |
What would happen if you were to increase each category by only 10 percent?
|
Current |
+10% |
Number of customers |
1,000 |
1,100 |
Dollar value of average transaction |
$100 |
$110 |
Average number of transactions per year |
2 |
2.2 |
Buying lifetime of average customer (years) |
5 |
5.5 |
Total income |
$1,000,000 |
$1,464,100 |
The cumulative increase would be 46.4 percent! Can you handle that? Sure you can!
The nice part is, it's usually not all that difficult to achieve a 10 percent increase in the number of customers or the average transaction--not with the right tools, processes and strategies. Nor is it too hard to keep your customers just 10 percent longer...if you take the right steps.
But let's stretch a bit further. Say you could achieve a 33 percent increase in each of the four categories...
|
Current |
+33% |
Number of customers |
1,000 |
1,300 |
Dollar value of average transaction |
$100 |
$133 |
Average number of transactions per year |
2 |
2.66 |
Buying lifetime of average customer (years) |
5 |
6.65 |
Total income |
$1,000,000 |
$3,058,428 |
That's a 205.8 percent increase in total income!
And only by increasing each of the four categories by a third!
Now, you may find it difficult to increase each of the categories by 33 percent... or even by the same percentage, for that matter. The exact amount of your increase isn’t important.
What’s important is that if you make chances… even small changes in each of the four areas, it will have a dramatic and positive effect on your bottom line.
We can show you how to make all this happen. And more.
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