In every business I come across there are always some quick simple ways to increase profits without too much extra effort. I like to call this the low hanging fruit because just like a fruit tree laden with fruit, you can pick from the lower branches with little effort. However to reach the higher branches you may need to climb or use a ladder, which requires a bit more work. So it makes sense to take the easy fruit first. 

There are so many ways to increase profits but to start with, here are two quick and easy ways:

1) Increasing Your Prices

Every year costs increase which erodes your all-important margins. Often business owners are worried about putting prices up as they are concerned about losing customers. However the reality is that in most cases when prices are gently increased very few customers, if any, even notice. 

But let’s say you increased your prices and a small amount of your customers left - let’s look at the numbers to see if you would be better off or not. 

Say you had a Gross Profit Margin of 20% and decide to increase your prices by just 10%. You would have to lose 1/3 of your current sales before your profit fell back to what it was originally before the price increase. Would you lose 1/3 of your sales from a 10% price increase? Probably not. 

A cafe business owner I have been working with has increased prices by 5-10% three times over the past 18 months, and their sales and profits just keep on increasing. 

Action Point: Increase your prices by between 5-10% next month. 


2) Ask your existing customers to buy something extra (Up-selling)

Depending on what business you are in, there are many ways you can do this. For example if you are a men’s clothing store and your customer is about to buy a suit from your store, a smart salesperson, just as the customer is about to pay, might suggest that because they have just purchased a suit if they buy now they qualify for 35% discount off the price of your best ties. Just by having something extra to offer (not necessarily at a discount), your staff can increase your sales with very little effort. 

McDonalds have added millions of dollars in sales every year by asking “Would you like fries with that?”. Other classic upsells include - a case with your new iPhone, waterproofing spray with new boots, batteries when purchasing a toy, insurance for plane tickets, extended warranties, a chocolate bar by the checkout. Having already made the decision to buy, the customer is already in “buying mode” and if they are offered a little something extra, they are very likely to go for it.

Action Point: Pick one lower value related product each month that all staff can offer as an upsell or add on when the sale is made. 

There are tons of low cost ways to increase profits; try these to get you started.

IF your marketing and advertising is not getting the results you need, then it will most likely be because it is boring or irrelevant to your potential customers.

And better to know now than waste thousands of dollars every year on advertising and marketing that is simply not working and giving you good results. Honestly, I have seen companies spending $50,000 to $100,000 on their advertising and being very unhappy with their results. Their ads aren't working but they keep on paying - burning cash month after month, year after year - don't let that happen to you!!!

So what makes a good ad, and what should it contain in order to bring a steady stream of new and repeat customers to your door?

Quite simply: A good ad is one that makes you money every time you run it. 

For example:

$1,000  the cost of your ad 

$10,000  sales directly from ad
x 33%  margin
----------
$3,300  gross profit

$2,300  profit 

This ad works - and it's profitable. If you can consistently get this kind of result from your ad, then you are onto a winner. Run this exact ad, and run it regularly!

Now I am sure you have heard the branding argument, which goes along the lines of 'get your name out there and at some time when your potential customer needs your product or service they will think of you and might give you a call'. Baloney. They will have heard of other companies as well, so unless you have something better to offer than the others in the customers mind, the chances are they won't come and see you. If you have millions of dollars spare in the bank and you are happy to roll the dice, then go for it. But most companies are not in that position - they need their ads to produce a result - more sales and more profit. 

Now that we have established what a good ad is, let's look at what need to be included in your ads to get the kind of response you are looking for:

Once you have decided where to use your ad, eg local newspaper, Google adwords, flyer drop, direct marketing mailout, Facebook, in a specific magazine, etc (and this will completely depend on who your target market is), how do you go about writing a killer ad that will get results?

There is an old sales and marketing acronym - AIDA - that is known as the secret sauce of advertising. Let's take a look at this in more detail:

ATTENTION
If you don't grab the attention of the reader with you ad, then they just won't see it. The secret to this is all about the "Headline". Imagine you are looking at a newspaper (or better yet go and get one). You look through the headlines to decide which ads are worth your time to read. If it's not relevant or it's boring, you skip it and go onto the next one. Here is a great example from "The 100 Best Headlines Ever Written" - "FOR THE WOMAN WHO IS OLDER THAN SHE LOOKS" - if your target market is women over 30 you have now very successfully grabbed their attention!

INTEREST
Once you have grabbed their attention, you now need to hold their interest. Now they are reading your ad, so make it relevant, interesting, and tell them how you can solve their problem. Focus on the advantages and benefits they will get from buying your product or services. 

DESIRE
Build on their interest and convince the customer that they want and need your product/service. Emotively address the buyers real concerns, the problems they will solve when they buy from you.

ACTION
Tell them what they need to do next to get the deal done - eg Phone Now!

Also remember to tell the reader your "point of difference". See my previous article on "What sets you apart from the competition" for more detail. 

You will notice very few ads you come across take this approach, which is why most don't attract lots of customers.

Action Points:

• Look at your current ads and marketing material to see if AIDA is there.
   
• Test your results. Are you making a profit or loss on your advertising? How?...Ask your new customers religiously 'How did you hear about us?' and write it down.