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How Much Do Your Customers Cost?
On average, how many people visit your store, website or place of business without buying anything? How much time and effort must you spend on each new prospect before they become a client? Once they become a customer, how often will they buy, and how much? How long will they continue to buy from you? How much does it cost you to win a new customer over, or to keep an existing one?
As a small business owner, you must know the answers to these questions in order to make intelligent marketing and advertising decisions. Before you spend valuable time and money trying to attract new clients, you’ll first need to determine how much it will cost to actually acquire them. Not only that, but you’ll also need to calculate the average lifetime value (or income) that new client or customer will ultimately generate. Why? Because understanding how to effectively focus your marketing and advertising dollars could make the difference between cost-effectively attracting new clients or foolishly squandering precious resources.
Although accounting may be your least favorite thing about running a small business, there are a few simple mathematical rules you absolutely must understand to be successful in the business world. These rules are used time and again, and influence decisions that might drastically affect your business.
One of the most important mathematical formulas for businesspeople to understand is how to calculate return on investment, or ROI. Having a firm understanding of how return on investment works could save your project or business untold money and time, and possibly make the difference between success and failure.
We’d like to think that everyone makes sound, well-reasoned choices regarding purchasing products and services. But in reality, people are complicated, and so are the emotions that drive them. Marketers and scientists study how emotion and motivation influence behavior, and in the process uncover ways to influence buyers by appealing to their negative emotions, fears, and insecurities. The results are tools, neutral and harmless until used in the wrong way, and despite the possibility of exploitation, these tools can be used to increase customer satisfaction and repeat business.
Preying on people’s weaknesses and fears to sell your products is unethical. But if you’re solving real problems for them, instead of lying and stealing their money, you can use
One of the most difficult situations many novice marketers and business-people of all kinds are faced with is how to price products and services. Charging too much will hurt your bottom line and reduce your profits, but so will charging too little. Finding the right price to charge can be tricky, but multiple studies have been conducted to help find the best way to price products and services, revealing a number of useful insights about the human mind in the process.
Understanding how customers view the price and value of your products, and using proven pricing strategies, can help take the guesswork out of pricing and selling your products and services.
“Bake A Dog A Bone”- Starting a Pet Treat Business
There are lots of “get rich quick” books and programs available claiming you’ll live on a beach the rest of your life, sipping margaritas and admiring sunsets, if you buy their program or book. Of course, no book will make you instantly wealthy — it takes planning, hard work, and even a little luck to run a successful business, not just aggressive marketing and unproven schemes. Among the many books that promise to show you how to run a successful business, most are garbage; only a few offer anything actually useful. So how can you tell which books are best? Sometimes, you just have to take a chance. So that’s exactly what we did.
Recently, we purchased “Bake a Dog a bone”, by Chris Trombley and Doug Bertram. Billed as a “Step-By-Step Resource Guide To Earning A Six-Figure Income In The Pet Industry”, their book promises to “Reveal Easy-To-Follow Secret Tactics That Could Help You Fetch Your Own Share Of The $65 Billion Dollar Pet Industry… Starting From Scratch On A Shoe-String Budget“. But does it really offer such amazing insights, or is it just another cash-grab by greedy business people?
There are hundreds of ways to market businesses of any size, but for a small businesses owner or entrepreneur, it may seem impossible to find which marketing strategy will work best for you. Luckily, it’s not impossible, but it does take a bit of work. Every business or product is different, but one universal rule holds true: You have to know your product, your competitors, and your customers like the back of your hand before you have any chance of successfully marketing your products or services. The most important part of being in business is making sales. All the good intentions in the world won’t pay your bills or help you realize your dreams. Yet despite how important this simple fact is, many entrepreneurs and would-be business people struggle with marketing. With so many options available, from TV to E commerce stores, how can you decide the best way to market your goods? The best advice is to follow the 4 P’s.
If you’re trying to decide how to price your product, or wondering how the process of marking-up an item works, read on. You’ll learn about how cost is determined, why some items sell for so much more than their cost, and how you can decide the best price to sell your product for.
It’s sometimes hard to see how items are priced. Sometimes the cost to the final buyer is much more than for the retailer that sold it. Some prices are marked up hundreds, or even thousands, of times more than they cost to the seller. How can an item bought for so little sell for so much? Is it because sellers are greedy, and want as much profit as possible, or is there another reason?
Sometimes greed does indeed influence the price a product sells for, but often, items must be marked up so sellers can make a profit. While some sellers artificially inflate their prices to take advantage of their clients, most successful merchants know that exploiting the people they depend on for their continued existence is a poor way to run a business, and charge only as much as they need to cover their costs and make a modest profit.
Have you ever wondered what to charge for your products? Charge too much, and nobody will buy. Charge too little, and you won’t make enough to continue selling products. But finding the sweet spot when pricing your products is hard. So how can business-people determine how to price their products or determine how much to mark them up?
Find Your Cost First, Then Your Selling Price
When deciding on a price for you product, or how much to mark something up, the most important thing is determining how much your product costs you. If you pay $10 for the supplies to make a single gift basket, you may think your selling price shouldn’t be much higher, but don’t forget; you also have to add in any other factors that increase your costs. For example, how much electricity do you use to assemble each basket? How many labor hours does each require, and how much does that cost you on average? Finding a price to sell your product for is much easier once you know where every penny spent in the process goes, and what it goes for.
Fotosizer – Convert all your pictures for the Internet with one click.
Fotosizer is a free program, (at this time), that has saved me and thousands of other people hundreds of hours resizing pictures to load on the Internet. It is easy to set up, easy to use and best of all there is a standard and portable version.
Whether it is uploading pictures for Facebook, Picasa, sending pictures to a friend in email or uploading pictures to your website, almost everyone these days uses digital pictures in one way or another. For businesses, this tiny program can be worth a lot in time savings.
Here is something in which many people are not aware. Pictures from your camera are quite often three to four times higher resolution than you need for most Internet applications. A picture that has a resolution of 300 dpi will look much better than a 72 dpi picture when printed at a photo center or on your computer. However, when viewed on the Internet, there is almost no noticeable difference between the two. That is, except for the size of the file and the speed at which it loads on the viewers screen. It also makes a big difference when trying to send these files as attachments or uploading to your website. The larger files can take forever to send and in some cases limit how many pictures you can send at one time.
If you are just in the beginning stages of looking for a business to start, one of the best places to look is what I call the “Too Area“. You have heard it said before, “look for a need and fill it”. So in your exploration of trying to decide on a business to get into, you want to look around and find things that are in demand, but are too difficult, too dirty, too complex, too expensive, too dangerous, too embarrassing, too fragile, too big, too small, too ugly, too impractical, too far away, too tall, too short, to smelly and the list goes on and on. Obviously there is a wide range of options when thinking about starting a simple small business. However, almost every new business begins this way even though they may not realize it.
One of the simple small businesses we own is a video production company that specifically caters to other small businesses. One of the reasons this business has been successful is because it’s not really that simple of a business to operate.
These days video cameras and editing software are readily available to just about anyone. However, the complexities of producing a high quality video product is beyond most people’s technological capabilities. There’s not a day goes by that I don’t curse being in a high tech business. Nevertheless, I know it is these same problems
How Much Do Your Customers Cost?
