Are you Buying the Right Customers to Increase Your Revenue and Profits?

The concept of buying customers centers around the idea that companies need to allocate great importance to the concept of determining the actual customer acquisition or ‘purchase’ within a period

We typically do this with the marketing and advertising funds we’ve set aside in our business.

When you aim to buy your customers, it is important to channel all your efforts and marketing investments in such a way that it offers you guaranteed results. But despite all the efforts it requires, if you are successful at ‘buying customers’, you can ensure profits and business success for yourself. If you'd like to learn more about this concept, watch this video for information.

This being said, we must pay close attention to the marketing activities that work and do not work in our business. Many of us cannot afford to waste these valuable dollars and so the best way to make the most of our investment is to invest in the activities that work. 

At ActionCOACH, we use a very simple formula to identify what strategies we should use to improve our clients’ businesses:

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Leads x Conversion Rate = Customers

Customers x Average Dollar Sale x # Transactions = Revenue

Revenue x Margin = Profit

Hundreds of strategies are available to make improvements in each of these areas. Making small incremental changes to a few key areas can have massive results for even the smallest business.

This is where the 10% comes in. 

Let’s say you have 4,000 leads in a year with a conversion rate of 25%. This means you would have around 1,000 customers.

With the 1,000 customers, let’s say they buy from you twice with an average dollar sale of $100. This five you a revenue of $200,000. 

If you have 25% margins, that leaves you with a profit of $50,000.

Now imagine if you could see a 10% increase in the 5 key areas: leads, conversion rate, average dollar sale, number of transactions, and margins.

You would then see a profit of $80,520 by the second year. Which is a 46% increase in revenue and a 61% increase in profits.

If you continued to make 10% improvements every year in these areas, in 5 years from now you could see profits upward of $152,000.

In today’s marketplace, we may well do better working on other areas rather than lead generation. Maximizing Margins should always be the first area you look at in any business.

An Easy Way to Increase Leads

As the goal of the business is to generate as many customers as possible, companies have to try some challenging ideas to ensure success in their endeavor. The book written by Sugars discusses the importance of focusing around 80% of all your business and marketing efforts on the 20% of your customers who bring value.

If you want a business that has customers as its best asset, it is essential that you plan effective strategies which will help grow the customer base, design an effective referral system, and be able to generate several leads effectively.

When you aim to buy your customers, it is important to channel all your efforts and marketing investments in such a way that it offers you guaranteed results. But in spite of all the efforts it requires, if you are successful at ‘buying customers’, you can ensure profits and business success for yourself. It is, on the whole, a tricky business that warrants a lot of effort!

Complimentary Business Strategy Session

If you want some guidance through the trickiness of profits or want to talk about the numbers presented in this article, sign up on link for a complimentary coaching session. Our certified business coaches have tons of tools and calculators to determine which direction your business should go.