Do You Know Your Margins?

The quickest way for any business to make 10% more profit each year is to put up its prices by 10%, but if it is as simple as that, then why aren’t we all doing it? The reason is that we have a fear that in doing so, we are going to lose our customers.

However, like most fears, when you analise them they are only “false expectations appearing real.” The reality is that in any market you can and should increase your prices, and if you know how to do it properly, you need never be fearful of losing a single customer.

The first thing to understand is that you must know your numbers. If you do not understand your own profit and loss account, know your gross profit from your net profit and what products make money and which do not, then you are right to be fearful. Without this knowledge, you will not know where to start and may well find you are increasing prices in the wrong area of your business and wake up the next morning with no customers at all. So if you are not tracking these important figures and do not have detailed analysis of what you sell and how much it costs you, then stop reading right now, book a meeting with your accountant and do not read any further until you have got the information at your fingertips.

OK, so now I will assume that you are financially literate. Your next step is to understand that if a company making a 30% gross profit were to increase its prices by 10%, it would have to lose 25% of its customers to be financially worse off. Yes, that is right; if 20% of your customers objected to the price rise of 10p in every €1 and went elsewhere, then you would still be better off putting your prices up. Also if you raise your prices by a higher figure, say by 30%, you could afford to lose 50% of your clients. Think of the time and effort you would save!

If you don’t believe me, work it out for yourself, then read on! If you can’t work it out, then go back to your accountant! Obviously if you have higher or lower margins the figures will be slightly different, but the concept will be the same.

I have been working on this one strategy with clients for 7 years and in all that time, the average loss of customers from a price rise is 1-2%. But this could be a hidden bonus for you in this as well. The clients that do leave as a result of a price increase are usually the ones that have always quibbled about price, don’t pay on time, cause you stress and grief and use up time that should be spent with your top clients. By losing your worst clients, you can spend more time on your best clients who will in turn buy more from you and stay longer. And there is a further bonus in that these bad clients that leave you go to your competitors and make their life hell instead! So you really can’t lose.

OK, you still may not be convinced by my argument and think that there must be a catch. Well, for some of you, no, there is no catch. If you only have a few products or services, you really believe in them, you give good value and have a good relationship with your clients; you can put up your prices tomorrow. I helped one service provider client do this and we doubled the profitability of his business virtually overnight.

For those of you with multiple products and services which are more commodity-based, where your clients have little loyalty and there is high price sensitivity and competition, then a more strategic approach than a general price rise is needed. For you, rather than increasing all prices, you need to work out which products and services you should increase and which you should leave alone. As I said above, you have to know your numbers, but this time down to a product line margin basis. Then you need to look for those products that are going to meet one or more of the following criteria:
High volume, so that a small increase can have a big effect (e.g. 1p on a litre of petrol)

High ticket price – so that a reasonable € increase is a low % increase (e.g. €5,000 on a new Ferrari)


Highly differentiated – where you can show a real point of difference that will justify a higher price (e.g. Apple’s iPhone)

Low access to knowledge – where access to competitors’ price and offering is harder to find or is confusing (e.g. energy tariffs)

Able to reposition – turn your product/service into a basic/better/best, so the basic competes on price and the others on value (e.g. Tesco’s value and finest range)

Add-ons – have a basic range and charge for extras (e.g. BMW & Mercedes).
This list is not exhaustive, but I find with my clients I rarely need to go beyond the basics to make a difference, and what a difference – for every €1 on the price, 100% of it goes straight to your bottom line!

So go on, take ACTION and put up those prices- just warn me first so I can get my order in before you do!

How To Grow Your Facebook Following

Maximize Post Spread

You’re on Facebook–congratulations. But many businesses make the fatal mistake of thinking social media begins and ends with Facebook, and never really bother to look beyond those borders. Chances are, if your followers are active Facebook users, then they are also avid users of other forms of social media, including but not limited to: Instagram, Twitter, Pinterest, LinkedIn, Tumblr, etc.

Facebook gets the most traffic, at close to one billion users a month, but you can’t turn your nose up at Twitter either–it gets over 300,000,000 (300 million!) unique monthly visitors.

If you’ve put all that effort into crafting fantastic content for your Facebook page, doesn’t it make sense to make sure it gets seen across the widest spectrum of social media possible?

Here are some practical tips on how to maximize post spread (and increase the number of “eyes” on your Facebook post content):

• Embed your Facebook posts in your business website. Visitors to your site can read your post onsite and then redirect to the Facebook page to see and engage in the comments on the post. While there, they will likely “like” and subscribe to your Facebook page.

• Install social media sharing buttons EVERYWHERE, but especially on your website posts. If you run a blog (and yes, you really should be running a blog on your business website), then install a plug-in such as Jetpack which allows to simultaneously publish your post to Facebook, Twitter, Tumblr, and whatever other social media accounts you use–all at the touch of a single button.

• Ask an engaging question at the end of each guest post to encourage comments and increase the guest page’s social media rankings with Google.

• Don’t forget to include a brief sentence at the end of the post saying something like, “This post was brought to you today courtesy of [insert your Facebook page name here].” Depending on the size of the target audience, this could net you hundreds, if not thousands, of new Facebook likes and subscriptions each week.

Create Shareable Content

People often get stuck on the number of Facebook “likes” as an indicator of success–but beware of this. Liking a Facebook page is a shallow indicator because it requires no real engagement on the part of the follower other than simply pressing the Like button. “Shares,” on the other hand, are a real indicator of how good and engaging your content is, because the act of sharing a post takes more effort and is therefore a good sign that your followers will go the extra mile for you.

Social media expert Brian Carter, says, “When we click share, we’re obviously saying ‘I like this so much, I wish I had created it myself. I want everyone I’ve connected with on Facebook to see it. I’m ok with my family, coworkers, supervisors, bosses–and anybody else I’ve friended, knowing that I like it.”

Creating shareable content is often a shot in the dark because it is not easy to predict what people will find interesting, emotive, engaging, or fun on any given day. Think of the average Facebook user as a fish in a massive shoal of fish–weaving and changing course in a seemingly random pattern. What is known, however, is that the more shares a post has, the bigger the chance that the entire shoal of fish moves towards it.

So, how do you create shareable content, if it’s such a shaky science? Although nothing is guaranteed, here are some practical tips.

First of all, look at the research on what kinds of posts get shared on Facebook. Dan Zarella, a HubSpot marketing specialist, conducted research into 20,000 posts shared on Facebook, and found out that the most shared posts are those that:

• Mention sex. (Hmm, might be difficult to find an angle on that for your business.)
• Feature a clickbait story. (Upworthy is the Facebook master of this. We suggest you check out their content. Upworthy posts get shared 64 times more than its closest competitor.)
• Contain content that make users feel good about themselves, the world, or humanity in general. (Look at the number of shares for videos showing babies hearing their mother’s voice for the first time, thanks to cochlear implants.)
• Contain numbered lists or points.
• Contained short and sweet words rather than flowery, verbose language. (Cut down on adjectives.)
• Feature mixed media content–videos, pictures, polls, quizzes, etc. Content posted on Facebook doesn’t have to always mean text; in fact, the more mixed in format your posts are, the more attractive they will be to Facebook users.

For example, look at this inspirational quote:

A Facebook post that shared this simple jpeg image got over 23,000 likes and over 10,000 shares–now those are stats to turn any business green with envy.

In short, make people feel good, or share something so universal that it strikes a chord, and you have your opening hook to drag thousands of potential followers back to your Facebook page.

Let’s not forget what Brian Carter says about the act of sharing a post, in that it indicates that the user is proud to share your content with his/her entire circle of friends, family, bosses, etc., and that the content is saying something important about the values or beliefs or the interests of the person sharing it. In this vein, stories or posts that are engaging, newsworthy, and reflective of positive values do well on Facebook. The trick is in finding that balance.

Be a Resource

Research done by The New York Times, called “The Psychology of Sharing,” found that 73 percent of people share Facebook posts in order to process and absorb the information in more depth, 49 percent share in order to influence and inform others, and 94 percent share a post in order to help.

This suggests that learning and self-education is a huge factor in why we share Facebook posts or pages–we like to learn, and we like to help others to learn. Businesses can draw in many B2B Facebook followers by creating and sharing informational content that will help the industry in some way, or prove useful to its participants.

You can become an industry resource by following some basic tips:

• Find out what the pressing needs and questions are in your area of business, and create posts and articles that answer them.
• Promote your Facebook content with other businesses in your sector by leaving comments on their pages, or hosting a guest post spot on their pages (with their permission) to talk about your post and the questions it answers.
• Host a Facebook Q&A session and invite other industry members to participate. After the event, post and promote a link to the session to catch all those who didn’t turn up for the event.
• Promote links to your content across all your other social media accounts to push as many people as possible back to posts on your Facebook page.
• Provide a permanent section on your Facebook page aimed at being an informational resource for your customers and followers–answering questions, finding information, passing on helpful tips, tagging partners, and so on. In Facebook technical terms, make this help/Q&A section a “pinned post,” which means it will be pinned to the top of your Facebook page and will always be visible.

Take a look at the Prius fan page as a good example of how a company can be a learning resource for its customers:

If you look closely at the question section, the ever-helpful Prius rep has answered a question from a Malaysia citizen in a thoughtful manner, even though the page was originally set up as a learning resource for the company’s North American customers. Responses like that garner loyalty.  

Run Facebook Competitions and Coupon Offers

One of the most effective ways to get Facebook likes and shares is to offer a competition or coupon offer that is available only to those followers who like/subscribe to your page, or perhaps share an important post (perhaps the competition announcement post itself). Everyone likes competitions and the chance to win something, and nobody in this day and age will pass on the opportunity to get a money-off coupon.

Here are two examples: the first an example of a Facebook competition post by a UK company, and the second, a money-off coupon from Tide:

Conclusion

If you are still experiencing some doubts about how to go about growing your Facebook followers without spending a dime, then here is a very useful infographic laying out how exactly to structure, balance, and plan your Facebook content in a way that informs, delights, educates, and ultimately gains you a loyal and growing fan base of Facebook followers:

Inspirtation

I attribute my success to this: I never gave or took any excuse. –Florence Nightingale

You miss 100% of the shots you don’t take. –Wayne Gretzky

I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed. –Michael Jordan

The most difficult thing is the decision to act, the rest is merely tenacity. –Amelia Earhart

Definiteness of purpose is the starting point of all achievement. –W. Clement Stone

Life is what happens to you while you’re busy making other plans. –John Lennon

Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do, so throw off the bowlines, sail away from safe harbor, catch the trade winds in your sails.  Explore, Dream, Discover. –Mark Twain

Life is 10% what happens to me and 90% of how I react to it. –Charles Swindoll

The most common way people give up their power is by thinking they don’t have any. –Alice Walker

The best time to plant a tree was 20 years ago. The second best time is now. –Chinese Proverb

Eighty percent of success is showing up. –Woody Allen

Your time is limited, so don’t waste it living someone else’s life. –Steve Jobs

Winning isn’t everything, but wanting to win is. –Vince Lombardi

Every child is an artist.  The problem is how to remain an artist once he grows up. –Pablo Picasso

I’ve learned that people may forget what you said, may forget what you did, but people will never forget how you made them feel. –Maya Angelou

Whether you think you can or you think you can’t, you’re right. –Henry Ford

Whatever you can do, or dream you can, begin it.  Boldness has genius, power and magic in it. –Johann Wolfgang von Goethe

People often say that motivation doesn’t last. Well, neither does bathing.  That’s why we recommend it daily. –Zig Ziglar

Life shrinks or expands in proportion to one’s courage. –Anais Nin

There is only one way to avoid criticism: do nothing, say nothing, and be nothing. –Aristotle

The only person you are destined to become is the person you decide to be. –Ralph Waldo Emerson

Go confidently in the direction of your dreams.  Live the life you have imagined. –Henry David Thoreau

 Few things can help an individual more than to place responsibility on him, and to let him know that you trust him.  –Booker T. Washington

Start where you are. Use what you have.  Do what you can. –Arthur Ashe

When I was 5 years old, my mother always told me that happiness was the key to life.  When I went to school, they asked me what I wanted to be when I grew up.  I wrote down ‘happy’.  They told me I didn’t understand the assignment, and I told them they didn’t understand life. –John Lennon

If you look at what you have in life, you’ll always have more. If you look at what you don’t have in life, you’ll never have enough. –Oprah Winfrey