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How To Make A Lot Of Money With A Few Customers

Just because you don’t have a massive audience doesn’t mean you can’t monetise it.

Carol Roth

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I wear many professional hats, but one of my favourite ways to work with clients is to help them monetise their customers. And, while I work with some of the largest brands in the world, I derive a lot of personal satisfaction from smaller clients – the ones whom I have helped make millions with small, niche customer bases.

So, how do you get to six- or seven-figure success? Here are some of my secrets.

Do the math

How many active customers do you have? For every thousand customers, for example, every $100 worth of products or services that you sell them per year nets you six figures and every $1,000 you sell gets you a million dollars in revenue for the year.

Now, that may seem like a lot, but $1,000 a year is less than $100 a month or $25 per week, so work out how often you need your average customer. This helps you to re-focus your business strategy and tactics.

Related: RocoMama’s 7 Lessons To Remain On Top Of Your Game With Customers

You may have higher-priced services or products or a smaller customer base, but doing the math gives you a good benchmark to work from.

Customise your offering

service-offering

Once you know how much and how often you need your customers to buy, make sure you have enough products or services for your customer to be able to hit those target numbers. If you don’t, or if you want to amp up your numbers, think about what ancillary products or services you could bundle with your existing ones or whether there’s something you could add to your overall offerings.

Then, get creative (the fun part). Create limited special offers for your customers. You can have exclusive items or services, special deals or products that are available for a limited time or even by lottery.

Or, think about an incentive for purchases over a certain amount. My company just doubled one client’s initiative year-over-year by offering a special gift incentive that was only available when you bought all items in a set – it’s a great way to collaborate with other brands or service providers that target similar customers with great products and services.

Also, consider upsells, whether you sell online or in person. The “would you like fries with that” tactic that McDonald’s has made so popular works in every venue.

Fill in the gaps with amazing content

One reason my company has had so much success with our clients is that we don’t just ask customers for money or to buy, but we provide them with interesting content. This makes customers more engaged with the company and its products, they are receptive to opening emails and interacting on social media. That way, when offers do come, they don’t feel spammy.

Depending on the type of business, you can provide anything from educational events offline and/or online to behind-the-scenes sneak peeks, to video content featuring key company executives or product designers or even relevant influencers or celebrities. The key is to be additive to your customers’ experience and think about what they want to know (more than just what story you want to push or what product you want to sell).

Related: 10 Ways To Get High-Roller Customers Spending More With You

Remind them

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Whether it’s an automated email reminder, a phone call, a text or a subscription service, sometimes getting more from your customers is as easy as remembering to ask or ask again.

If you have a limited-time offer, for example, let them know about it, but if they haven’t bought, remind them again half-way through the offer and again when it’s about to expire.

If you have a house cleaning service and your customers could use your service once a month, but they are trending at six-weeks, call them earlier to try to get booked more often or put them on a definitive monthly calendar with a set time.

Make it easy to be referred

While you can make millions from your existing customers directly, they can also be a great source of growth to get you new customers. Since people tend to personally and professionally connect with others who are like them, having a strong referral incentive can be a big win for your business.

While some industries have regulation around this, many will be able to follow the lead of Uber, Dropbox, Eat Purely (where I am an investor), Erin Condren Design and others who have built their businesses by offering both their current customers and new customers an incentive for sharing their products and services.

Make the referrals easy and simple to execute and the reward worthwhile. Ask for the referral directly in order to have your existing customers help you build your base of raving fans.

This article was originally posted here on Entrepreneur.com.

Carol Roth is an on-air contributor for CNBC, a “recovering” investment banker, entrepreneur and best-selling author. She makes people think, makes them laugh and makes them money, with her accomplishments ranging from her multimedia commentary to formerly sitting on the Board of Directors of a public company to advising on greater than $2 billion in capital raising, M&A, joint ventures and licensing transactions. Carol splits her time between her main residence in Chicago and New York City, and also has an action figure made in her own likeness.

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Cash Flow

The Simple Way To Pay Wages When Your Staff Don’t Have Bank Accounts

If you have employed casual workers over the busy season, you can pay wages even if they do not have bank accounts.

Absa

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At Absa Business Banking, the things that are important to you are just as important to us. We understand your business needs, which is why we have developed tailored solutions to help you where it counts. Take CashSend Plus, for example. It is a payment solution that enables you to pay workers even if they do not have bank accounts.

Related: Hiring Your First Employee? 5 Things You Need To Know

It is safe and secure

Your employee will receive a six-digit access code and a ten-digit reference number, so that they can verify the transaction. The money is instantly available at an Absa ATM.

You can even pay yourself

We have all lost bank cards or wallets at some point in our lives. What an inconvenience. Well, it is good to know then that you can access cash by sending it to yourself. Now, that is what we call better. 

Related: How Salary Transparency Empowers Employees – And When Not To Use It

Interested?

Please speak to one of our consultants or call 0860 111 123 or visit your nearest branch.

Absa Business Banking 

Do better business. Prosper.

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Cash Flow

Entrepreneurial Balancing Acts with Debt

Young South African entrepreneurs face many challenges when it comes to debt-related financing. Small and medium enterprise (SME) owners typically require extensive debt financing from bank and non-bank lenders.

Harald Merckel

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Young South African entrepreneurs face many challenges when it comes to debt-related financing. Small and medium enterprise (SME) owners typically require extensive debt financing from bank and non-bank lenders. Unfortunately, many South African entrepreneurs are limited in their ability to access capital markets. Among others, the major challenges facing entrepreneurs include lack of credit history, no collateral, shaky credentials, and unformulated business plans.

Regardless, SA entrepreneurs are forging ahead and using multiple resources at their disposal such as payday loan providers, non-bank lenders, family and friends, crowdfunding and other economic empowerment initiatives to raise the necessary seed capital for investment purposes. Given the staggering unemployment rate in the country (+25%), the only way out for many people appears to be entrepreneurship. The 2008 global financial crisis threw the economy for a loop, and now the hopes and dreams of many South Africans hang in the balance.

Related: Every Tough Choice Has Management Debt – Are You Accounting For Yours?

ISM Study Sheds Light on SA Entrepreneurial Pros and Cons

An intensive study conducted by the University of Cape Town’s Unilever Institute of Strategic Marketing (ISM) found that the country is experiencing ‘a crisis of aspiration’. Simply put, many South Africans are struggling to attain their career objectives in an economy that has been ravaged by corruption, mismanagement, and scandal. Despite tough economic times, South African entrepreneurs are determined to try their luck. Pressing challenges in the form of rising unemployment, and an economy mired in failure are challenging entrepreneurs to be more inventive than ever before. The most volatile component of the economic spectrum in South Africa is the middle class.

Many South African families have lived the high life, or ascended the rungs and then been knocked down a peg. This instability is creating added volatility in a country where high crime, mismanagement and political rancour pepper the scene. For many entrepreneurs, any access to credit is a godsend. Banks and non-bank providers offering personal loans, business loans, or credit card funds invariably expose themselves to debt default. For entrepreneurs, it’s important to know where to draw the line. Access to lines of credit in a crippled economy is significantly more valuable than the equivalent access in a developed economy.

How to Know when you are Overstretched as an Entrepreneur

Debt is considered a prerequisite for investment purposes. Most South Africans simply don’t have the necessary capital to start up a high-tech venture, fund a new business, or conduct marketing and advertising activity. As such, lines of credit are increasingly being used to propel business activity among SMEs – both in the formal and the informal sector. However, once debt reaches untenable levels, the tough questions need to be asked. For example, if multiple loans and multiple payments are required monthly, revenue streams need to be evaluated against expenses to gauge whether this is a feasible status quo.

Related: How To Handle Your Post-Holiday Debt

Many entrepreneurs find it difficult to manage multiple loans simultaneously, although it is necessary to acquire the capital from multiple sources. One of the ways to deal with these types of exigencies is a single loan from a low-cost lender in the form of debt consolidation loans. Simply put, these loans are provided by bank or non-bank lenders at lower interest rates than the prevailing interest rate on other lines of credit. By taking out a debt consolidation loan, the entrepreneur has more disposable income over time by not paying the higher interest on credit card debt.

Escape Debt Before Debt Consumes You

There are several other ways to know when your personal financial situation has reached critical mass. For starters, the nature of your business may require you to continue dipping into lines of credit to maintain business operations. If you don’t have the requisite discipline to stop indebting yourself, you may not be able to get out of debt. Debt consolidation is only effective insofar as you have the necessary discipline to put an end to debt financing of all business-related activity.

Credit should be used sparingly, and profits should be generated to allow your business to prosper. In a tight economic climate, costs are the bugbear that need to be attacked. Lavish trappings are unnecessary for business functionality – modest budgets, and high-quality goods and services are far more effective than window dressing at a premium.

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Cash Flow

How South Africa’s Small Businesses Plan To Invest Their Money In 2018

Here are their five areas they should focus their attention on in the next year and beyond.

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Despite economic uncertainty, South Africa’s small businesses are positive about the future. In fact, our State of South African Small Business report reveals that 40% of small businesses are expecting to grow. However, to achieve growth without overextending their limited resources, small businesses need to invest wisely.

Here are their five areas they should focus their attention on in the next year and beyond.

Marketing

When times are tight, companies typically reduce their marketing spend. This isn’t the case for 36% of South Africa’s small businesses. These respondents recognise marketing as a critical investment area.

They’d rather make a concerted effort to grow their customer base, than sit still and do nothing as consumer demand declines.

Related: What To Consider When Investing Your (Hard-Earned) Money

Technology

Without access to the latest technology, business growth can quickly stagnate. This is why 23% of South Africa’s small businesses plan to invest in up to date equipment, whether that be new machinery, mobile devices or computers.

The right investment in this area can give a business a real competitive advantage.

It can help boost profits and improve operational efficiency – both of which can help a small business withstand difficult economic conditions with greater success.

Product development

Consumers are spoiled for choice. Their needs are constantly changing and companies can’t afford to become complacent. To keep up with market demands, 22% of small businesses plan to invest in product development. Barring a few timeless classics, most products need a regular review and tweak to stay relevant and popular.

Technology

technology-south-africa

Digitisation is transforming business functions across the board. Technologies, like cloud software can take care of laborious administrative work.

Related: How To Make Money Investing, According To Ashton Kutcher

This liberates employees from time-consuming tasks, enabling them to focus on more strategic work like customer retention and acquisition.

Technology has the power to improve productivity and efficiency. Which is why 18% of small businesses are going to focus their investment plans on this area of their businesses.

Customer service

The customer should always be the priority. It doesn’t matter how good a product is, if there are no customers, then there’s no business. As competition increases, the user experience becomes more and more important to win over customers.

Business growth depends on happy customers and to achieve that, 18% of small businesses plan to invest in delivering better service.

All five of the above business areas are worthy investment focuses. The question is, how does a small business work out what to invest where? The only way it can invest effectively is with a full view of its company finances. A small business needs to be able to see which functions have provided the best return on investment to date.

Related: 12 Millionaire Habits To Start Making Serious Money Soon And Build Wealth In A Hurry

It also needs to consider how much investment capital it has to spend. What’s more, before it makes an investment in say, marketing or product development, it must know exactly how and where the money needs to go.

The right software can help a small business access the real-time insights it needs to make better, faster financial decisions. To combat increased competition and market uncertainty, South Africa’s small business owners need access to up-to-the minute information from any device no matter where they are. An informed investment has the greatest chance of success.

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