A Costly Cost Cutting Measure
Bigg Success is life on your own terms. Today, we’ll focus on one of the five elements of bigg success – money.
We’re all looking for more ways to save money. That’s understandable. However, we need to think about not just survival, but “surthrival.”
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Many business owners and managers, small and large, are cutting back on their advertising. This cost-cutting practice can be very costly in the long run.
Could not advertising cost you $1.5 million?
A McGraw-Hill study, about the recession in the early 1980s, found that companies that maintained or increased their advertising had sales 256% higher three years after the recession ended.
Think about that … two companies, each with a million dollars in sales go into a recession. The company that holds tight on its advertising, or perhaps even increases it, will do over $2.5 million within a few years after the recession ends if the second company, the one that cut its advertising, treads water.
Signaling the end of your business
A recent study by Ad-ology found that 56% of the people surveyed thought that retail stores that cut back on advertising must be struggling.
In other words, your advertising sends a “signal” to both your existing and potential customers. Just like a company cutting back on its dividend, you’re telling the public you don’t expect your future to be bright when you cut back on advertising.
The signal is so strong that 15% of the people surveyed thought it meant that the firm who cut back on its advertising wouldn’t be in business much longer.
The time – money trade-off
One of the other elements of bigg success is time. If you’re a regular here you’ve heard it before, but it bears repeating:
If you don’t have money, you have to spend time. It’s part of the price of bigg success.
So if you really feel the need to cut back on how much money you spend on advertising, it will pay to spend more time promoting your business.
That means networking
Depending on your business, you may primarily build relationships offline or online. However, you will probably be well-served to do both. Integration is one of the keys to success in business today.
If you have employees with down time, make good use of it. Tell them that you want to keep spreading the word so you all surthrive.
What you ask them to do will also depend upon your business. You may have them put out door knob hangers or give away free samples of your product. Perhaps they can make some phone calls or send e-mails to your list of customers.
Where to place your focus
We stated it subtly in that last sentence. We should emphasize it – focus on your existing customers to get the best return on your investment (of money and time).
Research has shown that it costs between five to eight times as much to get a new customer as it takes to keep an existing one. So, at the very least, make sure you’re communicating with your existing customers at least four to six 6 times a year.
Find out what their problems are. Find a solution – even if you can’t solve it directly, help them find the answer to build your relationship.
The most cost-effective way to grow your business
Building relationships with your best customers is the most cost-effective way to grow your business. When you can “wow” your customers, they will …
- buy more
- buy more often
- tell others
Segment & tailor
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While we’re talking about your existing customers, can you segment them into smaller groups so you can tailor your communications more precisely?
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I used to own a heating and cooling service company. We got our technicians to note the age of the furnace or air conditioner when they were in our customer’s home or business. Then we wrote a letter specifically to this group. We generated over $300 of sales for every letter we mailed!
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This highlights another point we alluded to earlier – get your staff involved. Help them understand how it not only makes their jobs more secure, it also means you continue to grow as a company so there will be more opportunities for everybody. That’s bigg success!
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Thanks so much for reading our post today. Please join us next time when we discuss what the underlying meaning of “I don’t have enough time.” Until then, here’s to your bigg success!
Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00411-060809.mp3
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(Image in today's post from hisks)
