The greatest mistake that entrepreneurs make (including me) is assuming that having a great product is enough to get the customers to buy. They fail to make enough effort and money to market, advertise and promote their products. In the end their business will fail because nobody ever heard about their products or were not convinced that their product/ service was the best.
There are six profit variables that determine the profits in any business:
1. Leads
Leads (also known as prospects) are the potential customers that your business is able to attract. Whenever someone contacts you, your staffs, your office, walks into your shops, visits your website, that person becomes a potential customer or a lead. The more the number of the leads you have the higher will be the chances that some of them will actually buy some of your products or use your services.
There are six profit variables that determine the profits in any business:
1. Leads
Leads (also known as prospects) are the potential customers that your business is able to attract. Whenever someone contacts you, your staffs, your office, walks into your shops, visits your website, that person becomes a potential customer or a lead. The more the number of the leads you have the higher will be the chances that some of them will actually buy some of your products or use your services.
2. Conversion Rate
This is the rate on how many of the leads is converted to become customers. Profitable businesses are those who are capable to use various strategies to enable them to have the highest possible conversion rate.
3. Average Dollar Purchase
This is the average amount that each customer spends with your business. Usually in every business, there are a lot of products with different prices for each of them. Some customer purchase some low-prices product while some will purchase the high-prices products. Making effort to make the customers to purchase the higer prices products will increase further your profit.
4. Number of Repeat Purchase
The mistake that many businesses do is to assume that all customers will come back to make repeat purchasing because they are happy and satisfied with their products/ services. Usually this is not the real things that happen. Efforts have to be done to bring strong loyalty to your customers.
5. Number of referrals
6. Net Profit Margin
This is the rate on how many of the leads is converted to become customers. Profitable businesses are those who are capable to use various strategies to enable them to have the highest possible conversion rate.
Leads x Conversion Rate = Number of Customers
3. Average Dollar Purchase
This is the average amount that each customer spends with your business. Usually in every business, there are a lot of products with different prices for each of them. Some customer purchase some low-prices product while some will purchase the high-prices products. Making effort to make the customers to purchase the higer prices products will increase further your profit.
4. Number of Repeat Purchase
The mistake that many businesses do is to assume that all customers will come back to make repeat purchasing because they are happy and satisfied with their products/ services. Usually this is not the real things that happen. Efforts have to be done to bring strong loyalty to your customers.
5. Number of referrals
6. Net Profit Margin
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