MAY 6, 2020
As I sit here creating emails and responding to the few that are in my inbox throughout the day I wonder what’s this latest disaster, yes disaster done for us. It has harmed so many people world wide, for now let’s focus on what’s happening locally right now. If you had a Birds Eye view of this Pandemic you would see sickness, pain , death, sadness, loneliness and empty streets like the coming of the Zombies. I feel for everyone who has and is suffering physically and mentally as we ponder what will the future hold. Will our businesses recover or re-invent how we need to do business, one thing for sure is we will survive. Business as we know it will never be the same the few that were able to remain open due to being an Essential service will remain healthy but the many that are closed will need to learn from this and re-invent how to conduct business, your new business. This is where the strength of the many creative minds will fight and adjust the daily Ins and outs of their business. In this next stage of “soft openings” for some businesses they will soon find that this could be a new way of conducting business such as pre-order for curb side pick up and deliveries and hey why not make this the norm? This could be a cost saving measure for some, definitely theft will decrease, overheads may decrease and as a business owner you will have more control. For all the creative minds and eager entrepreneurs there will be a whole new way of creating a new business format and hey why not?
As I sit here creating emails and responding to the few that are in my inbox throughout the day I wonder what’s this latest disaster, yes disaster done for us. It has harmed so many people world wide, for now let’s focus on what’s happening locally right now. If you had a Birds Eye view of this Pandemic you would see sickness, pain , death, sadness, loneliness and empty streets like the coming of the Zombies. I feel for everyone who has and is suffering physically and mentally as we ponder what will the future hold. Will our businesses recover or re-invent how we need to do business, one thing for sure is we will survive. Business as we know it will never be the same the few that were able to remain open due to being an Essential service will remain healthy but the many that are closed will need to learn from this and re-invent how to conduct business, your new business. This is where the strength of the many creative minds will fight and adjust the daily Ins and outs of their business. In this next stage of “soft openings” for some businesses they will soon find that this could be a new way of conducting business such as pre-order for curb side pick up and deliveries and hey why not make this the norm? This could be a cost saving measure for some, definitely theft will decrease, overheads may decrease and as a business owner you will have more control. For all the creative minds and eager entrepreneurs there will be a whole new way of creating a new business format and hey why not?
December 17,2013
BETTER PRODUCTS EQUALS BIGGER PROFITS
Taken from Connected for Business
CfB-There's no shortage of experts counselling business owners on how to boost profits,but it turns out the answer to higher revenues may be simpler than one would think.
A recent American Express survey found that Australian entrepreneurs who focus on improving product offerings and service capabilities as a way to "future proof" operations were more likely to have seen revenues increase over the past 12 months.
P1-When I researched this and discovered that by offering select product offerings based on quality and not necessarily price was the key to increasing profits,this gave consumers a choice based on a product made locally,in the U.S or even Europe as better options,when price was the issue most dealers had the option of off-store product to meet the consumers needs. Although the option was there this did not necessarily mean that there gross profit was met but did contribute to the overall sale to the consumer.
CfB-Businesses that focused on cost cutting were more limey to have seen a decline in profits. The survey which looked at 1,000 small businesses,found that 74% of respondents took action to strengthen their business in the face of economic uncertainty. Thos actions varied,with 51% reducing expenses,24% improving products,17% improving cash flow and 16% boosting marketing. It was those owners who focused on product innovation and cash flow improvement,though,who saw revenues rise.
BETTER PRODUCTS EQUALS BIGGER PROFITS
Taken from Connected for Business
CfB-There's no shortage of experts counselling business owners on how to boost profits,but it turns out the answer to higher revenues may be simpler than one would think.
A recent American Express survey found that Australian entrepreneurs who focus on improving product offerings and service capabilities as a way to "future proof" operations were more likely to have seen revenues increase over the past 12 months.
P1-When I researched this and discovered that by offering select product offerings based on quality and not necessarily price was the key to increasing profits,this gave consumers a choice based on a product made locally,in the U.S or even Europe as better options,when price was the issue most dealers had the option of off-store product to meet the consumers needs. Although the option was there this did not necessarily mean that there gross profit was met but did contribute to the overall sale to the consumer.
CfB-Businesses that focused on cost cutting were more limey to have seen a decline in profits. The survey which looked at 1,000 small businesses,found that 74% of respondents took action to strengthen their business in the face of economic uncertainty. Thos actions varied,with 51% reducing expenses,24% improving products,17% improving cash flow and 16% boosting marketing. It was those owners who focused on product innovation and cash flow improvement,though,who saw revenues rise.
The following is from an article that I was reading in Connected for Business Magazine from Rogers,in reading this article something hit me and I suddenly felt a rejuvenation of sort,I was inspired to the point that I went to my web site and just started writing this like a mad writer and couldn't stop until I realized that this is really about the article and not me or Phase One Marketing BUT wait ! it is about me and Phase One Marketing. In my days of selling in a retail showroom I have always based my selling techniques on the product first and why a customer should be paying for this product,of course if it's not in their budget we move on to the next price category but I would never go from a faucet that was $899 to $199,it was a process and a middle ground had to be established so I would go to a 599 then 399 and so on but rarely did I ever have to go that scale it was usually one or to down the list. Consumers will always have your attention if your talking about the product and the company rather than price first once the topic of price comes up then the whole process of completing your quote is now based solely on price,How much is this faucet? How much is this tub? All of a sudden no one seems to care about who makes the product,where does it come from? How is it made? You know what I'm talking about we do it every day,but we should care about buying a reputable carefree product,that has value,the value comes in knowledge,less call backs,quality control,design and engineering. Without my point sounding too much like a rant i'll move onto writing the article that inspired me to do so.
Most of the points made were almost as though they were directed at our industry. I hope that you take the few minutes to read the article and understand the point we are all try to make and preach for years,I know this is a huge undertaking and may not be reality for most of us but in taking baby steps we may be able to make some type of dent for the future. Enjoy the article and any feed back is more than welcome - Michael Longo
THE PRICE IS WRONG (Taken from the Editors of Profit Magazine)
You spend months thinking about how to cut costs and increase sales,but how much time do you spend on your own pricing strategy?
Are you confident you've set the right prices for your products or services?
When Rafi Mohammed asks entrepreneurs the latter question at business conferences very few if any raise their hands. And yet,argues the Cambridge Mass. based pricing consultant and author of The 1% Windfall: How successful companies use price to profit and grow.examining your pricing strategy is the "quickest way to profit and growth"
Start by making sure you aren't committing any of these common,but deadly pricing sins.
SIN no.1
Setting prices with little rhyme or reason:
Many business owners set prices by choosing a profit margin and applying it across the board.Others look to the competition and follow industry norms. if either sounds familiar,you're missing a huge opportunity,says Andrew Gregson,a Kelowna BC pricing consultant and author of Pricing Strategies for Small Businesses.
Price ought to be determined by the value customers put on the product. Gregson offers a big company example,By adding a chemical to underground pipes,DuPont solve a major customer headache:the pipes no longer burst underground.Althouth the cost of applying the chemical was pennies,DuPont was able to charge hundreds of dollars more."They got away with it because it was sold on the basis of,"How long did it take you to dig up that burst pipe?" says Gregson. The value of the product significantly outweighed the actual cost.
SIN no.2
Bundling too much-or not enough:
Gregson sees it over and over again:companies start offering more and more(free delivery for example)(30-50% off on your next item -M.Longo) to try and close a sale,without analyzing how unprofitable it may become over time.Avoid making such offers permanent,he says.For instance,limit free delivery to the first six months of the contract. That said,in other cases,companies might be missing an opportunity if they don't bundle. You can turn something that was once optional into a core part of your service and raise prices accordingly.
SIN no.3
Offering a deep one-time discount to inspire a sale:
The idea behind Groupon and its daily deal group buying competitors is that,inspired by a huge discount,consumers will purchase a product or service,fall in love with it and then return,more than wiling to pay full price. "That's one of the biggest pricing fallacies," says Mohammed. "Once you discount,the value of the product decreases psychologically, and it's hard for people to justify coming back and paying full price." He recommends a 20% discount for inspiring a trial test",it gets people interested,but doesn't devalue th product."
The 80/20 Rule and how it fits into your business
All businesses, whether they like it or not, have to live with the phenomenon called The 80/20 Rule. It is not a "rule" in the sense that someone decreed it. Its formal name is Pareto Principle, after Italian economist Vilfredo Pareto.
The basic rule as applied to business activity is: 80% of the results come from 20% of one's activities. The 80/20 Rule can be applied in many different ways:
INVENTORY– 80% of the business will be done on 20% of the selection of products.
SALES – 80% of the business will be done in 20% of the time (year, month, week, or day)
SALES PRODUCTIVITY – 80% of the sales come in from 20% of the sales staff,how true this really is.
MAJOR CUSTOMERS – 80% of sales will be done with 20% of one's customers.
COMPLAINTS – 80% of the complaints come from 20% of the customers.
CUSTOMER BASE – 80% of the customers will come from 20% of the area the business reaches.
ADVERTISING – 80% of business from advertising will come from 20% of the advertising.
STAFF – 80% of the work will be done by 20% of the employees.
SUPPLIERS – 80% of what one buys comes from 20% of one's vendors.
MEETINGS – 80% of the important information/discussions happen in 20% of the meeting time.
PROFIT – 80% of the profit comes from 20% of the sales or 20% of the customers.
There is more to these ratios than meets the eye when first read. Having the knowledge of how these ratios affect business can be put to good use. Let's examine how each of the above variations of the 80/20 Rule can be used to further the business.
_____________________________________________________________________________________
The logical thing to say is that if this is so, then why display or offer product lines that don't sell often or don't sell at all? Real Estate space in any showroom is key to revolutionizing your profit margin.The 80/20 Rule is a ratio, so if the total selection is less, the total sales will be less. We are all here to make money and offer the best we can to the consumer but at the same time recognizing our true market. We cannot be everything to everybody,if that was the case then we should be selling groceries,cosmetics,clothing along with tubs,toilets and faucets.
For a new business, this means that until one gets a track record it will be necessary to have depth in each item, line, etc. This may call for a very large beginning inventory until the "rate of sale" (or usage) can be established. or negotiating the best possible price or discount with your suppliers.
Rate of sale is something that has to be tracked very carefully, because one has to keep fast selling items in stock at all times and have enough coming in. Replacement time becomes very critical because the depth of inventory needs to cover current sales as well as sales while replacements are on the way.
Not everything sells all the time at the same rate. Each item or style of item will have a high selling period, a slow selling period, and times when it sells somewhere in between. As the saying goes, everything has its "Christmas" selling season, but it may not be in December,bt strategically pricing a product to
For a new business selling services, there needs to be a menu of services or choices the client can use, and they need to be ready to be performed. This calls for developing several basic files of information that can be adapted to many different situations. This is called "inventory of services." Each of these, such as with physical inventory, will have its rate of sale or usage.
Warning – "logic" would say to get rid of the some or all of the 80% that doesn't sell or sell well. This is "fuzzy logic," because if the overall selection decreases, the ratio still holds true and it will have a negative effect on the 20% that does sell well.
Better, "unfuzzy logic" says to look for ways to increase the sales of things that sell slower or don't sell. If successful, it will help increase overall sales and, since the 80/20 Rule is a ratio, the sales of the better selling products or services will also increase.
SALES – 80% of the business will be done in 20% of the time (year, month, week, or day) the business is open to its public.
Some firms decrease the number of employees on hand during the slow times. This is possible, if looked upon as a yearly or weekly thing (as some days in many businesses are traditionally slow) as long as one has a trained staff or someone that can be called in when needed, much like the military has the National Guard and Reserves.
However, there are many tasks in business that get put off when things are busy that need to be accomplished and this is where the "surplus" staff may be put to work doing these activities different from what they usually do.
Trying to boost sales for slow and non-selling products or services and looking for ways to increase profitable sales during slow times will increase gross sales and will cause the busy times to be busier.
SALES PRODUCTIVITY – 80% of the sales come in from 20% of the sales staff. So, fire the ones that are not producing?
It may not be the fault of the salesperson. It may be the fault of how the territories are set up, a difference in industries, materials not suited for the potential client base, difficulty in delivery, etc. The question to ask, possibly, is what the sales per customer or order are.
MAJOR CUSTOMERS – 80% of sales will be done with 20% of one"s customers.
It is widely practiced that businesses divide their customers into A, B, and C categories by the amount of business these customers generate. Often, it is the A customers that do the most and are highly targeted by the sales & marketing departments, while B customers are treated half-heartedly and C customers are almost entirely ignored. What is also known is that in a 10 year period A customers become C customers or go out of business and C customers grow to be A customers
Most of the points made were almost as though they were directed at our industry. I hope that you take the few minutes to read the article and understand the point we are all try to make and preach for years,I know this is a huge undertaking and may not be reality for most of us but in taking baby steps we may be able to make some type of dent for the future. Enjoy the article and any feed back is more than welcome - Michael Longo
THE PRICE IS WRONG (Taken from the Editors of Profit Magazine)
You spend months thinking about how to cut costs and increase sales,but how much time do you spend on your own pricing strategy?
Are you confident you've set the right prices for your products or services?
When Rafi Mohammed asks entrepreneurs the latter question at business conferences very few if any raise their hands. And yet,argues the Cambridge Mass. based pricing consultant and author of The 1% Windfall: How successful companies use price to profit and grow.examining your pricing strategy is the "quickest way to profit and growth"
Start by making sure you aren't committing any of these common,but deadly pricing sins.
SIN no.1
Setting prices with little rhyme or reason:
Many business owners set prices by choosing a profit margin and applying it across the board.Others look to the competition and follow industry norms. if either sounds familiar,you're missing a huge opportunity,says Andrew Gregson,a Kelowna BC pricing consultant and author of Pricing Strategies for Small Businesses.
Price ought to be determined by the value customers put on the product. Gregson offers a big company example,By adding a chemical to underground pipes,DuPont solve a major customer headache:the pipes no longer burst underground.Althouth the cost of applying the chemical was pennies,DuPont was able to charge hundreds of dollars more."They got away with it because it was sold on the basis of,"How long did it take you to dig up that burst pipe?" says Gregson. The value of the product significantly outweighed the actual cost.
SIN no.2
Bundling too much-or not enough:
Gregson sees it over and over again:companies start offering more and more(free delivery for example)(30-50% off on your next item -M.Longo) to try and close a sale,without analyzing how unprofitable it may become over time.Avoid making such offers permanent,he says.For instance,limit free delivery to the first six months of the contract. That said,in other cases,companies might be missing an opportunity if they don't bundle. You can turn something that was once optional into a core part of your service and raise prices accordingly.
SIN no.3
Offering a deep one-time discount to inspire a sale:
The idea behind Groupon and its daily deal group buying competitors is that,inspired by a huge discount,consumers will purchase a product or service,fall in love with it and then return,more than wiling to pay full price. "That's one of the biggest pricing fallacies," says Mohammed. "Once you discount,the value of the product decreases psychologically, and it's hard for people to justify coming back and paying full price." He recommends a 20% discount for inspiring a trial test",it gets people interested,but doesn't devalue th product."
The 80/20 Rule and how it fits into your business
All businesses, whether they like it or not, have to live with the phenomenon called The 80/20 Rule. It is not a "rule" in the sense that someone decreed it. Its formal name is Pareto Principle, after Italian economist Vilfredo Pareto.
The basic rule as applied to business activity is: 80% of the results come from 20% of one's activities. The 80/20 Rule can be applied in many different ways:
INVENTORY– 80% of the business will be done on 20% of the selection of products.
SALES – 80% of the business will be done in 20% of the time (year, month, week, or day)
SALES PRODUCTIVITY – 80% of the sales come in from 20% of the sales staff,how true this really is.
MAJOR CUSTOMERS – 80% of sales will be done with 20% of one's customers.
COMPLAINTS – 80% of the complaints come from 20% of the customers.
CUSTOMER BASE – 80% of the customers will come from 20% of the area the business reaches.
ADVERTISING – 80% of business from advertising will come from 20% of the advertising.
STAFF – 80% of the work will be done by 20% of the employees.
SUPPLIERS – 80% of what one buys comes from 20% of one's vendors.
MEETINGS – 80% of the important information/discussions happen in 20% of the meeting time.
PROFIT – 80% of the profit comes from 20% of the sales or 20% of the customers.
There is more to these ratios than meets the eye when first read. Having the knowledge of how these ratios affect business can be put to good use. Let's examine how each of the above variations of the 80/20 Rule can be used to further the business.
_____________________________________________________________________________________
The logical thing to say is that if this is so, then why display or offer product lines that don't sell often or don't sell at all? Real Estate space in any showroom is key to revolutionizing your profit margin.The 80/20 Rule is a ratio, so if the total selection is less, the total sales will be less. We are all here to make money and offer the best we can to the consumer but at the same time recognizing our true market. We cannot be everything to everybody,if that was the case then we should be selling groceries,cosmetics,clothing along with tubs,toilets and faucets.
For a new business, this means that until one gets a track record it will be necessary to have depth in each item, line, etc. This may call for a very large beginning inventory until the "rate of sale" (or usage) can be established. or negotiating the best possible price or discount with your suppliers.
Rate of sale is something that has to be tracked very carefully, because one has to keep fast selling items in stock at all times and have enough coming in. Replacement time becomes very critical because the depth of inventory needs to cover current sales as well as sales while replacements are on the way.
Not everything sells all the time at the same rate. Each item or style of item will have a high selling period, a slow selling period, and times when it sells somewhere in between. As the saying goes, everything has its "Christmas" selling season, but it may not be in December,bt strategically pricing a product to
For a new business selling services, there needs to be a menu of services or choices the client can use, and they need to be ready to be performed. This calls for developing several basic files of information that can be adapted to many different situations. This is called "inventory of services." Each of these, such as with physical inventory, will have its rate of sale or usage.
Warning – "logic" would say to get rid of the some or all of the 80% that doesn't sell or sell well. This is "fuzzy logic," because if the overall selection decreases, the ratio still holds true and it will have a negative effect on the 20% that does sell well.
Better, "unfuzzy logic" says to look for ways to increase the sales of things that sell slower or don't sell. If successful, it will help increase overall sales and, since the 80/20 Rule is a ratio, the sales of the better selling products or services will also increase.
SALES – 80% of the business will be done in 20% of the time (year, month, week, or day) the business is open to its public.
Some firms decrease the number of employees on hand during the slow times. This is possible, if looked upon as a yearly or weekly thing (as some days in many businesses are traditionally slow) as long as one has a trained staff or someone that can be called in when needed, much like the military has the National Guard and Reserves.
However, there are many tasks in business that get put off when things are busy that need to be accomplished and this is where the "surplus" staff may be put to work doing these activities different from what they usually do.
Trying to boost sales for slow and non-selling products or services and looking for ways to increase profitable sales during slow times will increase gross sales and will cause the busy times to be busier.
SALES PRODUCTIVITY – 80% of the sales come in from 20% of the sales staff. So, fire the ones that are not producing?
It may not be the fault of the salesperson. It may be the fault of how the territories are set up, a difference in industries, materials not suited for the potential client base, difficulty in delivery, etc. The question to ask, possibly, is what the sales per customer or order are.
MAJOR CUSTOMERS – 80% of sales will be done with 20% of one"s customers.
It is widely practiced that businesses divide their customers into A, B, and C categories by the amount of business these customers generate. Often, it is the A customers that do the most and are highly targeted by the sales & marketing departments, while B customers are treated half-heartedly and C customers are almost entirely ignored. What is also known is that in a 10 year period A customers become C customers or go out of business and C customers grow to be A customers