GBA LLP Blog

The 27 Common Business Mistakes costing you Money Right Now - Part 5

Posted by Trevor Buttle on Jul 21, 2019 7:53:40 PM

FATAL MISTAKES’ You Must Absolutely, Positively Eliminate From Your Business Right NOW!

Here is part 4 of our 5 part series. If you have not read parts 1 - 4, please read those blogs first.

Marketing Mistake #10

Not Calculating And Profiting From Lifetime Customer Value

One of the biggest mistakes is to base all your results on the first sale. Here’s what we mean… Let’s say on the first sale a new customer pays you $1,000.

Your gross margin after delivering your product or service is 50%, which means you make $500 per new customer.

However, it costs you $600 to generate this one customer (the cost of advertising) so you actually made a loss of $100. Based on these assumptions you could conclude that this approach was not profitable and you’d no doubt cease using it.

That’s how 99% of business people evaluate their success – based on the first transaction or sale.

Now in most businesses, the customer keeps coming back for more. And even if you sell a ‘one-off’ product or service, you can and should get referrals from your customers and start looking to ‘partner’ with other non-competing but aligned businesses, so you can offer their products or services (for a commission, of course!).

That means the customer is actually worth much more to you than the amount generated on the first transaction.

This, in effect, is what’s known as Lifetime Customer Value.

Quite simply, Lifetime Customer Value is the total profit an average client or customer generates during the duration of the relationship with you.

A good guide to use is five years for the duration (but you will know what your average lifetime is).

Let’s use the above example to show you the BIG difference this approach can have…

Now let’s say one new customer generates the same $1,000 per year but they pay this every year for five years. The gross margin for delivering the product or service is the same 50%.

That now means by looking at the value over the duration of the relationship, the average lifetime value is $1,900 ($5,000 x 50% = $2,500 – cost of advertising $600) and not -$100 as we had in the first example! Plus these figures don’t include any referrals the customer would also bring!

Do you see the difference? All it takes is a simple shift in thinking, and you can leverage your business so much that it astonishes your competition.

And where does this leverage come from, you ask?

Well, now you understand what each customer is worth to you, it means you actually know how much you can spend to acquire the customer in the first place. This is where the whole issue of creating ‘Irresistible Offers’ comes into play.

The Irresistible Offers you create make it impossible for your prospects to ignore them, and as a result you rapidly increase customer acquisitions!

Just to wet your appetite, and prove it can be done, here's an offer (and the full letter) was created that catapulted the outside catering sales for O’Briens (an Irish franchiser) from sales of $0 a week to over $6,000 a week in less than three months – for each franchisee!

 (Just so you know, the actual offer is the ‘FREE O'Briens Five Star Sandwich Platter’…)

“Are You Planning A Business Meeting

That Requires Fresh High Quality Food

At A Very Reasonable Price?”

 

“Order Your FREE O’Briens

Five Star Sandwich Platter”

 

Dear <Name>

Here’s the deal:

You can receive a delicious O’Briens Five Star Sandwich Platter (serves five people) - totally FREE. Or you can deduct the cost from your first order.

I’m not talking about your standard “buffet” food. I’m talking about high quality food made daily from fresh produce. I’m talking about presentation and packaging that makes an instant impact on people. Perfect for any meeting or special occasion with staff, associates or Clients/Customers.

So why am I doing this?

Quite simply, I’ve found that as soon as people taste our food and see our presentation and packaging they’re hooked. Nothing compares to this. They love it! And I’ve learnt that by providing a free platter we stand a better chance of getting your business in the long run.

I suppose the “proof of the pudding is in the eating”. You can instantly form your own impression, having sampled our food. And that’s it. No strings. No obligation.

Frankly, our platters are not for everyone. If you’re not concerned about the impact your food has on your staff, associates and Clients/Customers, then we aren’t for you. If, on the other hand, you truly appreciate the importance of having

superbly presented high quality food and the positive impact this creates, then I urge you to call our FREEPHONE Platter Hotline on <Number>.

So what’s the catch?

Well there isn’t one - as long as you respond quickly. Clearly I can’t keep this offer open indefinitely. You must reply before Friday 6th July to get your FREE Five Star Platter. So the quicker you reply the less likely you are to be disappointed!

Why should you even try us out?

I appreciate the offer of a “free lunch” may not be enough to persuade you to place your order. After all, I know how important your meetings can be. However, I consider ourselves the only specialist caterers for the business market in Leicester. Sure, other companies do it – but have they really thought about your real needs and wants. For example, do they offer…

  • A guarantee to deliver on time?

Guarantee 1: We will deliver your entire order on time or you don’t pay us a single penny

Guarantee 2: If we do deliver your order late, your next meal is FREE (to the same value as your original order)

  • A varied and delicious menu with 10 choices of bread, choice of drinks (hot or cold), and catering for vegetarians?
  • An instant meal where the food arrives ready for presentation on your tables?
  • Catering for 5 to 5,000 people?

We offer all this as “standard”. How many people do you think would be willing to offer such a guarantee? But that’s the point. We guarantee on-time delivery because we know how important this is to you. If we fail, we suffer – not you. Isn’t that how it should be?

I’m sure you can now appreciate why I think you should take advantage of my FREE offer. Do it now. Call our FREEPHONE Platter Hotline on <Number>. We are eagerly awaiting your call.

Kind regards

Rosemary McIvor

Managing Director

 

PS Don’t delay. This offer is only available until July 6th. Call me now on our FREEPHONE Platter Hotline on <Number>. Thank you.

PPS FREE DELIVERY! Whether your meeting is early in the morning, at lunchtime, or in the evening we will deliver to you FREE of charge!


 

This was the offer sent to businesses operating within a one-mile radius of the retail outlet.

The companies targeted were large organizations that have a greater need for outside catering (Remember ‘Marketing Mistake 1’ about marketing to everyone?).

Because we knew these organizations would be ordering frequently, we were confident that if we could get them to sample the food and the service – we'd secure their business. And that's just what happened!

 

This conveniently fits into Business Multiplier 3. But when you calculate the Lifetime Customer Value of a customer and you use irresistible offers, for example, you can transform the success of your lead generation (Business Multiplier 1) and sales conversion (Business Multiplier 2).

So in reality this is one of the few strategies that extends across each of the three Multipliers. That’s why it is one of the most potent weapons any business can use.

 

Marketing Mistake #11

Not Using Headlines

he headline is the one thing that grabs the prospect’s attention. Whether it’s in an ad, sales letter, leaflet, brochure, the opening sentence of a

telephone script, and so on, the headline can be the difference between failure or incredible success – it’s that important!

If prospects or customers dismiss the headline that's it, you've lost them. They won't start reading your letter, ad, brochure, etc. or listening to your telephone script or radio ad – and you won't get a response or a sale.

To emphasize the importance of headlines, here are a couple of quotes from two of the most highly respected copywriters of all time…

"If you can come up with a good headline, you are almost sure to have a good ad. But even the greatest writer can't save an ad with a poor headline."

John Caples - How To Make Your Advertising Make Money

"On average five times as many people read the headline as read the body copy."

David Ogilvy - Confessions Of An Advertising Man

 

What does this mean? Basically, if you get your headline right you almost guarantee your success. Get your headline wrong - and your results will suffer!

Here's a simple example to show how few people understand the basic principle of using headlines…

We've just picked up my copy of the Yellow Pages® directory. I'm looking in the Accounting category. These are the ‘headlines’ of the ads on one page:

- Peirson E.T & Sons

- Powdrill & Smith

- R Garner & Co

- Richard Pennack

- Sturgess Hutchinson & Co

- Sharpe Langham PLC

- Sharmon Fielding

- S.R. Cox

- Running your own business

With the exception of the last headline, the headline for each ad is the name of the business that's advertising.

Because so many people are doing it wrong, if all you do is lead with a strong headline on all your marketing communications you'll improve the response and success many times over.

Effective Headlines Fulfill These Four Key Objectives…

  • Get attention,
  • Select an audience,
  • Deliver a complete message, and
  • Draw the reader into the body copy (or keep them listening to you, etc.).

The good news is that creating winning headlines can be achieved by following some simple and proven ‘headline types’. We've listed seven of the most successful ones here. By applying a number of these different headline types you'll start to see how you can create winning headlines…

  • Benefit headlines (all your headlines should contain a benefit of some sort)
  • Use a two- or three-word headline (but remember long headlines are almost always more successful then short headlines)

Burn Fat Faster

Get June Free

Double Bonus Sale

Oh My God!

Gosh

At Last

Millionaire Secrets

If Only…

  • Headlines that focus on quick and easy solutions

Fast And Simple…

Ridiculously Easy And Fast…

Idiot-Proof…

In Just 10 Days…

The 7-Minute Workout…

The Lazy Man's Way To…

Instant, Automatic Results…

The Quick And Easy Way To…

  • Warning headlines

Read This Before You…

Don't Buy…Until You've Read These Facts

  • Testimonial headlines

A Specific Benefit Written Testimonial From One Of Your Customers

“Or It Can Just Be A Headline In Speech Marks Like This Written Like A Testimonial”

  • Reasons why headlines

Seven Reasons Why You Should…

37 Invigorating Reasons…

6 Ways To…

7 Steps…

Here's How…

  • Offer headlines

Put your offer in the headline…

Try-Before-You-Buy Carpet Cleaning

If any of your existing marketing material doesn’t have a headline on it, we can right now say you’re losing thousands, hundreds of thousands, even millions of dollars every year. We guarantee it.

 

Conclusion

These Financial & Marketing Mistakes Can Seriously Damage Your Business' Health

We’ve highlighted the 27 Common Financial & Marketing Mistakes in this report – there are of course dozens more. Make yourself a promise and start reversing the effect these mistakes are having in your business. Believe us, it will have a huge effect on the performance and the success of your business.

And we can help you build a better business even quicker. In fact, here are 5 reasons why our clients choose us to help them through the start, growth and maturity of their businesses...

 

  1. The Accounting & Tax EXPERTS For Ambitious Business Owners, Puts More Money IN Your Pocket...

First, we’re true experts in helping small and medium-sized owner-managed businesses to grow and financially manage the challenges that their development or a lack of it throws up.

And when you’ve made your money, you want to keep as much of it as you can by paying as little tax as possible. Our owner-managed business tax solutions do that for you.

 

  1. 3 Step Risk-Free Guarantee Puts Your Mind At Rest And Keeps Us On Our Toes...

All our accounting and tax saving services are backed by our 3 pronged no-risk guarantee...

  • All work is based on a fixed fee, quoted in advance. You’ll never, ever get a nasty surprise.
  • All deadlines will be met. If we are ever late, we’ll pay all fines for late filing.
  • Our work will exceed your expectations every time, or you decide the fee.

 

  1. Easy Payment Plans So You Can Spread Your Costs...

To help you manage your cash-flow, you pay us monthly.

 

  1. Unlimited FREE Support...

You get unlimited support for FREE. That means unlimited e-mails, unlimited phone calls and unlimited meetings are all included in your low monthly fee, subject to our fair use policy (worth $2,000 a year). Never again worry about being ‘on the clock’ even for a meeting!

 

  1. FREE Business Analysis...

And finally you get a FREE and comprehensive business analysis, which will show you all the hidden opportunities available to you, at the push of a button (potentially worth $thousands).

 

...and since we’re experts in helping owner-managed businesses, our work is streamlined, efficient and cost-effective. So not only do you get the best possible financial and tax saving advice – you get it all for a low monthly fee.

If any of these 5 things appeal to you, then we need to meet.

However, we don’t work with just anyone. Our twenty-five plus years in practice have taught us a valuable lesson – we only work with ambitious owners who want to build a better business.

If that’s you then you’re going to get a huge amount of value from meeting with us. Yes we offer a ‘FREE No-Obligation Meeting’ just like every other accountant or CPA/CA, but OUR MEETINGS ARE VERY DIFFERENT. In fact, here’s why you should take the time out of your busy schedule to come and meet with us instead of anyone else...

 

  • POWERFUL FINANCIAL SOLUTIONS: After learning more about your business we’ll be able to give you powerful solutions to your most pressing financial challenges (cash flow, cost management, profitability, etc.)

 

  • 3 PROVEN BUSINESS STRATEGIES: We’ll also give you 3 proven but little-known and easy-to-apply business strategies that right now will add hundreds of dollars (even thousands) to your business

 

  • GUARANTEED GREAT MEETING: And finally, if at the end of the meeting you don’t think it was one of the best, most inspiring and educational meetings you’ve ever had, we’ll give you a cheque for $100 made out to your favourite charity. That’s how confident we are that you’ll be delighted you took the time to meet with us.

 

We hope that these blogs have given you a feel as to what we are about. All you have to do to arrange your meeting is to phone us at 1-866-600-7068 or 905-873-8837. We look forward to meeting you soon.

 

 Download our e-book 27 Common Mistakes Businesses Make

 

If you want to subscribe to our blog and be notified weekly or monthly about new blogs, click the link below.

Subscribe to our Blog

 

If you would like to talk to GBA about your business and how we can help you address some of these common mistakes or other business concerns that you may have, please register with the link at the top of the page for our Free No Obligation Meeting and see why we have a 98.9% customer satisfaction rating.

 

 Back to Top

 

 

 

 

Topics: General, Increasing Profits, Tax

 Arrange Your 
FREE 
No-Obligation Meeting. 
Call us at 
905-873-8837 
Or complete the form below...

Recent Posts