I was talking with a business friend the other day when he shared something that seemed quite shocking to me.
He explained how much money he was spending to generate leads for one of his products.
He further complained about how much difficulty his salesman was having trying to sell that product. His prospects believed the price was too high. And they could get the same product far cheaper with no reduction in quality or features from a competitor.
To me the answer was simple. Drop the product. Stop paying for advertising. And stop spending your salesman's time, emotion and effort beating a dead horse. Let him focus his attention on the winning products so he can make you some real money.
The school is still out on whether he'll take my advice.
It doesn't bother me either way.
But the way I see it, dropping the dead product has at least 3 advantages:
But does it really?
I mean, you've heard the 80/20 rule right? Which states 80% of your income comes from 20% of your clients. It also says 80% of your sales come from 20% of your products. And 80% of your product sales come from 20% of your lead sources.
All I'm suggesting is he drops the 20% of lead generation efforts that account for 80% of his salesman's headaches.
As simple as it sounds, this one action alone could increase his salesman's productivity and sales. How much by I don't yet know. I'll keep you posted.
John Reid (not his real name) has 6 products in his product line.
3 sell well.
The other 3 basically suck.
So where should he spend his time? On the products that sell well ... or on the products that don't?
John decided to spend his time trying to improve sales for his 3 floundering products.
He put his best sales people on the job.
He focused his advertising budget on getting more leads for the 3 failing products.
He used up 40% of his time in meetings with his team discussing ways to sell more of his failing products.
Sales didn't improve. In fact, sales for his best selling products dropped off.
And John couldn't work out why he wasn't doing well. "Must be the Global financial crisis" he thought.
Then along comes the crazy city girl, Stacey Richards (not her real name either) who -- on the other hand -- was quick to "cut the deadwood" from her inventory.
When she found a product that didn't sell well she quickly cut it free. Then focused her time and company resources exclusively on the products that did sell well.
With more attention and focus on the best sellers sales increased steadily.
Everyone was happy.
The company moved forward at blinding speeds.
What's the moral of the story?
Should be obvious.
Cut the dead products or services from your inventory and focus your time, energy and company resources on dominating the market with the products that sell well.
Life's too short to mess around with products or services that drain your time and energy.
Focus on the products or services that help move your company forward.
Frankly, if ANYONE tells you they know a secret way to get you to the top ranked positions in Google's natural listings they are lying ... unless ... they tell you the following ...
Strive everyday to make your website more relevant and user friendly to your target market.
That's it! That's the real secret to SEO success.
Sit down with your team (or yourself) and devise a plan to continuously add content (videos, audio, text, functions) that makes your user's experience better. Then keep everlastingly at it.
Ok, you've got plenty to do so get to it.
Oh, and one more thing: if you are contemplating hiring an SEO company ... don't do it until you read my article titled Is SEO a Scam?
I always struggled with this concept of time equals money.
I suppose in an investment sense, where compound interest and capital growth exist, time does equal money.
But the saying doesn't fit everywhere.
I have another saying:
Activity equals money. (Warren Buffet seems to agree as you'll see in the video at the end of this message.)
And some activities are worth more money than others.
Take prospecting for new business as an example. If every hour spent prospecting yields two qualified leads and each qualified lead is worth $200 to my business then my activity value equals $400 an hour.
So prospecting is a $400 per hour activity.
If I close new business with one in three potential clients who meet with me for one hour each ... and if the average new project is worth $9,000 ... then ... my activity value for potential client meetings equals $3,000 per hour.
If 5 hours are required by admin to administer a $9,000 project ... and I pay an admin person $25 an hour, the cost of admin per project is $125. Admin carries a $25 per hour activity cost.
I think you get the point.
Activity equals money. And some activities have a higher dollar value than others, depending on the value each activity brings to the bottom line.
What activities do you spend your time on? And how much are those activities worth? Can you spend more time on higher value activities and delegate other activities to someone who will accept a lower activity cost?
What's the major qualification most franchise systems ask you to meet before you hand over your cash?
And how does their criteria for selecting franchisees compare to the hiring process all successful companies put their potential candidates through?
If the franchise you are looking at is like many of the new or small franchise opportunities on the market today then ... the main qualification is money.
Do you have the cash to buy the franchise?
But is that the right question?
After all, what you are really buying -- in most cases -- is not a business but a job. So doesn't it make more sense to make sure the new franchisee has the qualifications to be successful in their new job before you talk about the money?
Imagine if companies changed their hiring process to a "pay for employment" model where the person with the most cash gets the job, regardless of qualifications?
Yet that's the franchise model in many cases.
And that's the number 1 reason franchisees fail.
The franchise doesn't fail. Franchise owners and franchisees fail.
Sure, some forward thinking franchisers understand their long term success is directly linked to the success of their individual franchisees. But many don't. Many think their success it tied to the number of people they can sucker into handing over $5,000, $10,000, $30,000 or $50,000 or more for a job that may or may not work.
Don't make this mistake.
One more trap to avoid:
Some franchise sales people pretend to put you through a "job interview" like qualification process. But truthfully, it's a thinly veiled attempt to manipulate you out of money.
The design of these qualification processes is to get you thinking: "Well, if they think I qualify -- and they know more about it than me! -- I must be a good fit".
What's the solution?
Ask yourself: "If this was a job interview instead of an offer to buy a franchise would I be in with a chance to win the job?
If the answer is yes then move to the next step in your due diligence which should be to discover how many people with similar qualifications to you are succeeding with the same opportunity.
If the answer is "No". Walk away or be prepared to find and pay someone qualified to run it for you.
Remember when you were young and your mum asked you to clean your room?
Chances are, you didn't clean it the first time you were asked.
or the second time.
or the third.
Truth is, most kids won't clean their room unless threated with some kind of punishment.
Because there's a lot of other fun things to do instead of knuckling down and cleaning up a mess.
But as you get older, and especially when you start or run a business, you find there's a load of things that are not fun but still need to get done.
And if you don't do those things, stuff starts falling apart pretty fast.
You know, like …
Payroll doesn't get met.
Bills get paid late, or not at all.
Customer complaints increase.
Sales slow or stop all together.
Taxes become overdue and sometimes impossible to pay.
So what's the answer?
The tax department has a good solution for this:
They threaten you with financial pain.
You can be the happy owner of a business one day and out on the street the next.
If you want to avoid the problems associated with things going wrong you have another option:
Just like your Mum probably told you each time you complained about having to clean your room.
And that means doing the things you know you should do but don't feel like doing.
Like spending time each week improving your marketing so you never have cash flow problems again.
Not sure where to start?
Then book a 35 minute phone consultation with me and I'll put you on the right track.
I'll help you identify where the biggest opportunities are for turning your sales around in the next 30 days (or sooner if you're really in trouble) ...
And I'll help you come up with plans that will work to make your goals a reality.
Go here to register: