Develop and double your profits

Are you with one of the seven out of ten businesses missing out on the cheapest, easiest way to generate sales?

I can quote this statistic as a fact because over the past seven years, thousands of businesses have told me so. For many of my speaking engagements I email a pre-conference survey to attendees. The tallied responses all sing the same sad song. Either no database; one kept but with minimal information; all universally not used apart from the rare exception.

For example in late March, after collating 100 survey responses from a group of 300 membership based businesses, I found 67% were keeping only simple name, address and phone contact details which were required to join. It was such a crying shame especially in this economy.

Each business could have used the member information to bring them back in for more business and to improve profit.

All the more depressing is if you pooled the combined membership - there could have been a marketing and communication database in excess of 300,000 New Zealanders.

This database could be used to benefit both the association members and their members, such as national discounts for both.

On the other hand, having a database doesn't mean a thing unless you use it. Paul Watkins a fellow speaker from Hamilton was reviewing a Law firm client's database. The firm had 5,500 clients. Paul discovered that (in round figures)

1.             3,400 hadn't been seen in the last 5 years, in part because 800 were DEAD!

2.             2,000 of these hadn't been seen for 10 years

3.             They didn't want to see 400 ever again!

4.             Of those seen inside five years, over 1,000 were just for small conveyancing or wills.

5.             Only 600 had been seen in the past 12 months, of which less than 100 were considered active high value clients.

This 600 represent just 11% of the total number of 'clients'. The top 100 represented only 1.8% of the total. They have not undertaken a profitability analysis, but agreed that the 600 (11%) would account for around 90% of the firm's profit, and the top 100 for more than half of this. This came as something of a revelation to the partners, and further discussion also lead them to the following observations:

• That they treat ALL clients exactly the same - poorly! They never contact clients, simply wait for the phone to ring.
• Interestingly, the more contact they have with a client, the more the client values the work done - and less they question fees.
• They had no segmented database, so sorting for communication purposes was impossible.

Let's contrast this with Michael Shaw of Footprint Podiatry in Adelaide. I interviewed Michael to help understand General Medical practices for an Australian seminar series I spoke at.

Debbie, I'm a jack of all trades. My wife asked me to join her business as Practice Manager. The first thing I said to her was "darling, you've got to put in a computer system and patient database".  "Why, we're doing okay" was her response.  I replied, "Because you're leaving so much money on the table."  One of the first things I did was change our forms so we could track where new patients came from. I started a newsletter with special offers and we started using the built in modules for email and text messaging our software had.  We were able to cut our no show and late factor by 49%.

One day while looking through our appointment book and I noticed a two week quiet period coming up.  I thought I would try to fill the gaps so I targeted non-compliant follow ups. These were patients who didn't follow the suggestion to come in for their six month assessment after treatment as suggested.

I sent an email to 26 patients which generated 3 appointments; and a text message to 78 which generated an additional six.  This might not sound like much, but it only took one hour of my time, cost $12.80 for the txt messages yet it brought in over $500 in revenue. In my first year we doubled practice income.

If your business is not taking advantage of the ease of getting new business from your customers, isn't now the time to start?

By Motivational Speaker and best selling author Debbie Mayo-Smith. For a free quick tip newsletter and hundreds of 'how -to' articles come to www.debbiespeaks.co.nz

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