How do you generate the most profit with the least effort? How do you maximize margins without sacrificing quality?
I’m not talking more customers, nor more revenue, nor more offices and employees. Profit.
Based on my interviews with high-performing CEOs ("high-performing” determined using annual-profit-per-employee measurements) in more than a dozen countries, I’ve listed 11 common “rules” below. This is a return-to-basics call.
Here’s your cheat sheet for consistent profitability – or doubling of it – in three months or less.
1. Repetition is usually redundant – good advertising works the first time. Use direct response advertising (call-to-action to a phone number or website) that is uniquely trackable – fully accountable advertising – instead of “image” or “brand” advertising (e.g. billboards with no URL/phone/messaging), unless others are pre-purchasing product to offset the cost (e.g. “If you prepurchase 288 units, we’ll feature your store/URL/phone exclusively in a full-page ad in….”).
Don’t listen to advertising salespeople who tell you that three, seven, or 27 exposures are needed before someone will act. Well-designed and well-targeted advertising works the first time. If something works partially well (e.g., high click-through with low percentage conversion to sales (CVR), or low click-through with high conversion, etc.), indicating that a strong ROI might be possible with small changes, tweak one variable and micro-test once more.
Cancel anything that cannot be justified with a trackable ROI.
2. Pricing before Product – plan distribution first
Is your pricing scalable?
Many companies will sell direct-to-consumer by necessity in early stages, often through a simple website. Only later do they realize that their margins can’t accommodate resellers and distributors when they come knocking. This is true whether your “distributor” is iTunes, a worldwide widget distributor, or Orbitz.
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