In the first blog post in this series, Ratcheting Up Your Revenue (Part 1): Power Strategies Every Smart Entrepreneur Needs to Know, we covered an overview of the only strategies a business can use to boost its revenue. Click here to read that post
In the second blog post in this series, Ratcheting Up Your Revenue (Part 2): Enticing Buyers to Buy More Often, we covered a less costly but highly effective revenue ratchet strategy: Enticing buyers to keep coming back for more. Click here to read that post
In this blog post, we’ll discuss ways to sell more to your buyers by encouraging them to buy more and/or higher-end products and services each time they buy.
A word of caution though: Don’t rush out and arbitrarily raise your rates. Instead, consider the following “power practices” and apply them thoughtfully as you go about increasing the size of each purchase.
Selling More: Power Practice #1: Give your buyers obvious and easy reasons to buy more with each purchase.
Let’s look at how you might do this. First, you have to understand their needs; how do you fulfill their needs? In other words, you want to ask the question, what’s the best way to solve your customer’s problems and fulfill their wishes and desires?
How do you figure what your buyers want? You have to ask them.
Here’s an instructive snippet from a conversation with a coaching client that illustrates this point:
Me: “What’s your value proposition?”
Client: “We make life easier for them. We help them make more money.”
Me: “How do you know this?
Client: “I’ve been in business for 15 years.”
Me: “Okay that’s great, but how do you know that these are the specific results, improvements, outcomes and experiences that you’re providing for your clients?
Client: Silence for a little while.
Me: “Would you be willing to directly start asking buyers why they bought from you and what they want more of? Call them up. When they make a purchase, ask them. Do a survey, formally or informally to understand and meet your customer’s needs.”
Client: “I’m having a flat-forehead moment.”
You may already be successfully providing a valuable service; yet, you still would do well to speak with your customers and clients and get feedback. Ask this simple question: “What would you like to buy from us that we are not currently offering and if we offered something else, what would you want to buy from us?”
What you think you’re providing and what your buyers say you’re providing may be two different things. Similarly, the reasons why you think your buyers purchase from you may be surprisingly different than what your buyers actually state as the reasons. The only way to find out is simply to ask them!
Selling More: Power Practice #2: Continually add value.
Value exists in the minds, hearts, and experiences of your buyers. Similar to Power Practice #1, ask your buying audience: “What else can I add that’s valuable?” and “Is what I’m offering still valuable to people?” Times change, things change, economies change, mindsets and wishes and desires and problems change.
It’s important for you as a business to be adaptable and flexible enough to be able to continue to add value on top of what you’re already offering. The most efficient and reliable to do that is to continually ask questions of your buying audience and to listen to what your buyers are saying they want and need from you. You have to provide what they want before they’ll buy what they need.
Be aware that what buyers say they want to buy isn’t necessarily the same as what they really need. That’s okay. Sell them what they want. After that, you can sell them what you as an expert know they really need.
Selling More: Power Practice #3: Reinforce the ultimate value that buyers get from the business solving their problems and fulfilling their desires and needs.
Businesses commonly overlook such opportunities. A simply way to reinforce that value is by asking customers to tell you why they’re using your products and services, why they chose to buy from you, and what they’ve gotten out of them.
You may not always get desirable feedback but it will be very instructive and, used properly, will make a significant difference if you apply that feedback to your business.
You can reinforce the value by capturing raving fan stories, success stories, and testimonials, then sharing them with your potential buyers and existing buyers. This is called “social proof.” For instance, if you go to my website you can watch videos where you hear from the voice of some of my success stories what they got out of working with me. Success Interviews and 6-Figure Success Stories
In instead of or in addition to a “Success Stories” section on your website, you can sprinkle testimonials across different pages on your website as well.
Simple reminders with ideas and tips about how to get the most out of their purchase also serve to reinforce the value of their purchase and encourage potential buyers to jump on-board. TechSmith, the creators of Snagit and Camtasia, does a fantastic job of doing this through their “Your TechSmith New You Can Use” electronic newsletter.
Selling More: Power Practice #4: Focus on value conscious buyers, not price-sensitive consumers.
Price-sensitive customers buy based on who offers the lowest price for what they believe are comparable goods and services. They very often buy at the lowest price at the cost of quality, features, benefits, durability, longer-term value, and overall results.
For you, the problem with price-sensitive customers is that they tend to be disloyal when it comes to buying from you again.
They also tend to be the toughest to please and the most likely to be easily dissatisfied.
Value-conscious customers, on the other hand, buy based on trust, relationships, quality, service, outcomes, and the ultimate experience they get from doing business with you. Over the long-term, you establish an ongoing relationship with these customers in which you’re both invested. As a result, they are more likely to be fiercely loyal and supportive of the longer-term success of your business. Though their expectations remain appropriately high, they are more understanding, patient, and forgiving when things don’t go as well as intended.
In general, buyers who are value-conscious will buy more from you at any one time than price-sensitive ones.
Selling More: Power Practice #5: Shift your mindset to set your product prices and service fees based on value.
The more common approach is to set fees based on hourly rates, on what the competition is charging, or on what you mistakenly fear is what customers can afford to pay.
For a lot of entrepreneurs, this is a very challenging subject. It takes a committed effort to shift existing habits and mindsets. I’ve worked with a lot of people on this. For many people, they just aren’t as confident about stating their fees. When it comes to setting fees, frequently there is this little voice that goes off in the back of our minds that says “You can’t do that.” “People won’t buy from you.” “You’ll lose all your customers.” “Your business will come to a screeching halt.” “It won’t work. It’ll be a disaster.” “You’re going to fail.” This comes from mistaken beliefs about yourself.
What is the number one reason that people don’t set their fees based on value?
The number one reason that people have a challenge in setting their fees based on value is self esteem. They have a weak relationship to themselves in understanding and appreciating who they are and the value that they provide to others.
When you alter your beliefs, thoughts, and feelings about who you are as a human being, you gain greater confidence in the value that you have to offer and in setting your fees based on value. This inquiry opens up a whole host of other things such as emotional feelings, emotions that are based in the past, typically from our childhoods.
Expanding and upgrading your mindset about the value you provide and setting fees and prices is an ongoing process. Engaging in this work is likely to boost your confidence in the value you provide with potential clients and reinforce that value for existing clients.
In Part 4 of this series, we’ll cover 5 more power practices for encouraging buyers to spend more each time they buy from you.
Scores of fellow Freedompreneurs have shared with me that they need help finding more ideal clients and turning potential clients into paying clients.
If this sounds like you, you are certainly not alone. Over the years, I’ve noticed that many entrepreneurs, even big businesses that ought to know better, spend the majority of their time and effort on getting more clients, customers, and patients.
By itself, this is not a problem; it’s actually desirable, except for the rare business where they have more business than they can handle.
However, I’d like you to consider why you want and need to get more buyers: It’s to generate more sales and pile more cash into your bank account, right?
That being the case, why not focus on what you ultimately want – more cash in the bank – rather than solely on getting more buyers?
Along those lines, today’s blog post kicks off a mini-series in which we’ll explore strategies that go beyond simply getting more and better buyers. I call these “revenue ratchet” strategies.
For the duration of the series, you’ll find it useful to refer to this Revenue Ratchet Formula Memory Jogger.
Let’s walk through how this works:
If you tell me the number of clients and customers that you have in a given year, how much each customer buys each time they buy (the average size of each sale), and how often customers buy from you in a given year, I can predict your total revenue for the year, almost to the penny.
This is what I call the “Revenue Ratchet Formula”:
Said differently, your revenue equals the number of buyers you have, multiplied by the average size of each purchase, multiplied by the number of times each buyer makes a purchase, for a given period. It’s very straightforward.
In order to increase your revenue, you have to boost one or more of these three variables. This formula applies no matter what kind of business you have. Whether you’re a service business or you are a product-oriented business, a startup or a multimillion-dollar revenue enterprise, you can only influence revenue by changing one or more of these three variables. That’s it!
Considered collectively, the Revenue Ratchet Formula is a powerfully effective yet commonly overlooked approach to “ratcheting up your business’ revenue,” hence its name.
In subsequent blog posts, we’ll explore each of these three “revenue ratchet” variables and associated strategies in greater detail:
- The first strategy is to get more and better clients (and referrals); that means increasing the number of people who buy from you.
- The second strategy is to get them to buy more at one time; that means increasing the average purchase.
- The third strategy is to get them to buy more often; that means enticing buyers to keep coming back for more.
In the meantime, start expanding your mindset when it comes to increasing revenue beyond simply getting more buyers. Along with your efforts to get more and better buyers and referrals, also be thinking of ways to make it worthwhile for them to buy more from you each time they buy and for them to buy more frequently.
In 1999, I was encouraged by some friends to take a class about personal growth and transformation. During the class, I couldn’t help but notice when a certain gorgeous woman stood up to share something.
During one of the breakout sessions, I ended up sitting next to this particular woman. Normally I have no problem thinking up things to say, even regarding topics that I know very little about. However, under the extreme pressure of sitting next to such an attractive woman, I was rendered speechless. The only thing I could think of saying was, “Did you know that your pager is going off in your purse?”
The little common sense I had remaining told me that that line wasn’t going to win the day. So the session ended with me not saying a single word to her.
To make a long story short, that gorgeous woman ultimately became my wife. We have been happily married for the past 13 years and have two rambunctious young boys who are teaching us a lot about being grown-ups.
After our first son was born, I was telling a friend—one of the friends who had encouraged me to register for the class to start with—about how I had sat next to Denise during the second day of class but didn’t have anything slick or suave to say to her.
Retrospection being highly accurate, he suggested that I should have said something like, “I know you don’t know me, but how would you like to have kids together?”
Hmmm… Single guys out there reading this, don’t try this one out. At least, if you do, don’t blame me for your dismal results!
The other day, I was speaking with a colleague about the challenges of getting clients. She shared an experience she had had earlier in the day: Someone she had just met had immediately started a sales pitch. To my colleague, it felt like an attempt to pressure her into buying something. My colleague has a lot of past experience with sales and immediately knew what was going on.
Another misguided attempt to “close” a buyer without taking time to build rapport.
Her story reminded me about my experience of meeting Denise.
I still shake my head in disbelief when I see so many entrepreneurs out there trying to go back and close a sale almost literally after the first handshake. That’s the business equivalent of saying:
I know we just met, but how would you like to get married and have kids together?
I’m not saying you have to take things slow as molasses, but I do recommend that you take whatever time is necessary to get into the other person’s world. Learn about them. Ask questions and listen for problems, issues, challenges, and frustrations. Listen for ways you might be able to provide suggestions or resources, or otherwise provide something of value in an unimposing, nonthreatening, nonsalesy way.
Over the years, I’ve come across a number of people who teach how to get clients by offering a complimentary strategy session, with the primary aim of having the client work with you or otherwise buy something from you.
This approach can certainly work. I used it for the first two years of my coaching practice. But I found it incredibly inefficient, as I wasted a lot of time doing these complimentary strategy sessions with people who I just wasn’t going to be able to work with effectively.
“If only I had a way to screen these people out!” I lamented.
I started tinkering with my approach to the early phases of engaging with potential clients.
Along the way, I wondered why so many coaches, consultants, and therapists just jump right in to working with their clients without so much as a plan, other than: “Let’s get started right away. We can schedule our first session next week.”
Instead of leaping from “just met you” to “let’s jump in bed together,” I teach all my coaching clients to offer a planning session as the next step after the initial “getting to know you” session.
Here’s the common approach:
Informal conversation => complimentary strategy session (a disguised sales session) => sign up client
Now, here’s the approach I recommend:
Informal conversation => screening questionnaire => complimentary discovery session => complimentary (or paid) strategic planning session
While there’s an extra step in the sequence I recommend, I’ve found in my own experience and that of my clients that taking this added step is going to increase your conversion rates significantly when it comes to longer-term, higher-paying clients. And it’s a more natural progression for your clients, making it easier for them to say yes.
In today’s economy, an increasing number of highly-trained and capable professionals are setting out on their own, attempting to build a business based on their experience and expertise.
For a lot of these intrepid souls, achieving a consistent, six-figure annual revenue stream is an important, almost magical goal.
But the immediate problem most of these people face is that their existing areas of expertise have nothing to do with getting the business that leads to a six-figure revenue stream.
They fail to appreciate the myriad of moving parts that need to be working together to achieve this level of revenue and sustain it.
Great Power Lies in Simplicity
In contrast, most don’t realize how important it is to simplify their approach. A lot of “gurus” will tell you that you just need to focus on what matters. Great, but how do you figure how WHAT to focus on?
You see, in an effort to build their businesses, most people invest a lot of energy trying to do the “right things.” They study books, listen to audios, watch videos, and attend training events. And then they devise complicated plans that involve multiple strategies that, according to the “books,” should predictably lead to six-figures really fast.
But IF you knew where you should start given your particular situation, what to focus on, and how to get moving in the right direction, would you feel more confident and enthusiastic about building your revenue stream faster?
I hope so!
Some people find this story hard to believe…
As you may recall, I created an annualized six-figure revenue stream in 73 days. All without a website, blog, social media, real business cards, a list of leads, network of referral sources, or even real client success stories.
And I’ve guided other brave souls to either best my record or come pretty darn close.
There are plenty of people out there teaching how to achieve a six-figure revenue stream. But as far as I can tell, I’m the only one who has done it in 73 days (and with far fewer resources than most of you have at this very moment). And I’ve guided others to best my record (or at least come close).
Even so, achieving the six-figure revenue fast isn’t that big a deal. What is a bigger deal is the impact and contribution you can make when your business is financially solvent. And the sooner, the better.
So I’ve come to the realization that it’s far overdue for me to pull back the curtain on what it really takes to rapidly achieve a five- and six-figure revenue stream.
In the spirit of being of service to the very people who are searching for this caliber of guidance, here’s what I’m going to do…
Next week, on Thursday, April 26th at 5 pm Pacific, I invite you to hop on a conference call line with me. I’ll share specifics about my personal journey to six-figures in 73 days. More importantly, I’ll answer any and all questions you have about the fastest ways for you to go about creating your own six-figure revenue stream.
Some of the things I plan to address include:
- How I created an annualized six-figure revenue stream in 73 days (and why I think you can and should do it, too).
- How I used speaking events to accelerate my lead-generation.
- How I recommend for you to accelerate your lead-generation, even if you’re mortally terrified of speaking in front of groups.
- The 10 key principles that significantly increase your likelihood of generating a five- or six-figure revenue business within the next 70, 90, 180, or 365 days (but only if you know how to apply them).
- A simple way to figure out what to focus on (and what to ignore) as you accelerate toward six-figures.
And I’m going to devote the majority of this teleclass to answering the most important, pressing and toughest questions you have for achieving a significant boost in your revenue.
In the registration box below, just list your toughest questions for me and I’ll be sure to address them during the call. And for those of you who register for this session, you’ll be automatically added to the “Six-Figures Fast” special interest list. That means you’ll qualify to receive the “Six-Figures Fast” training program that I’m considering creating.
You know you’re really good at what you do. You offer tremendous value. You make people’s lives better. Maybe you even help them make more money.
Yet chances are pretty good that for the sake of getting business through the door, you’ve been tempted to take on clients at ridiculously low fees. Or worse yet, you’ve agreed to work with clients that you knew from the start were a train wreck, just waiting for you to help make it happen.
There you have it: The perfect recipe for instantly turning the business of your dreams into the nightmare of your day.
How does this scenario sound instead?
What do you think about working exclusively with clients who appreciate you, who value the expertise you bring to the table, and generously (and gladly) pay you for it?
I don’t know about you, but it sure sounds like the makings of “business nirvana,” where you work exclusively with “high-end” clients. You see, high-end clients are those whose values, business mission, and vision inspire others, including you as their consultant or coach. These clients take action and produce results in the real world. They’re simply fun and energizing to work with.
The curse of low-paying, lousy clients: Is there a cure?
But even with great clients like this, far too many service professionals end up undervaluing their worth. And so they end up under-charging. Or worse: Repeatedly giving away tremendous value for free.
Let’s take a look at this more closely. The “Client Profitability and Resonance” dashboard, shown below, displays a hypothetical roster of clients, based on their level of profitability and “resonance,” that is, whether you have good chemistry with the client (or not).
Starting in the left lower-quadrant, these are clients who aren’t very profitable to work with and they have the worst “chemistry.” In the short- and long-run, you’d best AVOID these clients at all cost.
In the left upper-quadrant, these clients are profitable, but the chemistry with them isn’t great. They are HIDDEN LIABILITIES because these types of clients tend to be less appreciative of your business and more likely to dump you with barely a moment’s notice.
Moving on to the right lower-quadrant, these clients with whom you resonate well, but they aren’t as profitable to your business as they could be. No matter how fulfilling it may be to work with them, you’d do well to UPGRADE these clients to higher levels of profitability.
Finally, in the right upper-quadrant, you have your HIGH-END CLIENTS, the clients who are the most rewarding to work with AND the most profitable.
Which quadrants do your own clients fall into?
If the majority of your existing clients are NOT in the “BEST CLIENTS” category, there’s room for upgrading your business model and best practices. That includes raising your fees and being a lot more selective about your clients.
A High-End Client Tractor Beam?
If you’re ready to give up hourly fees, chronic underpricing, working with borderline clients, and giving away tons of free consulting and coaching time, I can to show you how to work exclusively with high-end clients AND get paid based on the value you provide.
I invite you to be my guest for the “Paid Sessions That Sell: How to Get Paid to Get High-End Clients” webinar. This complementary webinar is scheduled for Thursday, January 26th at 5 pm Pacific (8 pm Eastern).
To sign up for the webinar, just fill out the form below.
If you’ve ever experienced frustration in getting clients to start working with you, or ended up working with clients who don’t pay you what you’re worth, this webinar will open up your mind to an approach that I think is just ground-breaking. And it’s not just because you get paid to prospect. It’s ground-breaking because you learn how to:
- Eliminate all “tire-kickers” (who simply waste your time)
- Select only high-end clients to work with
- Markedly increase your conversion rates (in some cases, 75% – 90%)
- Set your fees (and get paid) based on value and results produced
- Get PAID while you prospect!
To your freedom, contribution, and prosperity,
P.S. I used this very approach over seven years ago to create an annualized, six-figure revenue stream in just 73 days, when I started my business from scratch. And it’s not just me: I guided one of my clients to create his annualized, six-figure revenue stream in 70 days!
P.P.S.I’m excited to share this approach with you because it’s so powerful and effective for cultivating a solid connection with your prospective client, winning new, high-end business, and ultimately, providing outstanding value to clients at all stages of your relationship, even from the very beginning. To sign up for the webinar, just fill out the form below.
From today until the new year, will be inundated with sales and special offers from retailers. It’s very easy to get caught up in the excitement of all the different deals.
When it comes to your business, it can be easy to rationalize purchases that you have either deferred or, perhaps, not even considered before. The problem is, you can end up with things that don’t serve your needs, because you didn’t put a lot of thought into the purchase.
Throughout the year, especially now, I use a decision-making matrix that I applied to business-related purchases, especially large ones.
Here’s how it works. I first ask myself the following questions:
Will this purchase…
- Directly increase revenue and profitability?
- Decrease expenses?
- Directly enhance productivity?
- Improve safety/avoid injury?
- Enhance professional satisfaction?
Now criteria #5 is a “soft” one; if this is the only criterion that my contemplated purchase meets, but I don’t make the purchase. But if the purchase needs one or more of the preceding four criteria, then the purchase gets a “green light.”
I found these criteria to be very helpful for keeping me from making an impulsive purchase and wasting a lot of time and money in the process.
You may have other criteria by which you make your purchases and investments in your business. I’d like to hear some of those; please leave them in your comments below.
In the meantime, if you apply the simple criteria to purchases you make today and moving forward, they’ll help to keep your business in the black.