Thursday, May 14, 2009
Grow Profits by Growing Relationships
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It's a reasonable question.
If I am talking about using technology tools such as blogs, Linkedin, YouTube or Twitter to connect with people the word "profit" doesn't necessarily get mentioned in every discussion. Point taken. Profit is at least one step removed, but far from forgotten.
In the early portions of Grow! - The eCourse, our discussion is about Results Drivers, some of whom are customers. I cite the proven idea that getting more sales from an existing customer is easier and cheaper than getting a new customer. So, closer connections with existing customers equals sales achieved at lower cost which equals higher profits. That's assuming you make a profit on sales to begin with.
If you are not making a profit on each sale to begin with there can only be two reasons: 1) your product or service with overhead costs are more than you are selling for - which is a totally different topic and one for which selling more doesn't help. You can't really make "it" up (a loss) on volume. or 2) your volume of sales (revenue) has not yet surpassed your total expense. That is: you aren't breaking even yet as shown above in the diagram. That is the case where increasing sales to existing customers and getting new customers will grow the business AND lead you to profitability. It can often do it very quickly.
The idea of Grow! is to put tools into place which can improve all kinds of key business or orgaizational metrics by a keen focus in one area: The people - Results Drivers - who have to biggest impact on your results.
Let's Grow!
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