The Five Cs
Most business owners and so-called turnaround experts in my experience tend to focus on only the first C. You see, the first C is the hardest one to influence and usually requires you to spend money.
First, let’s identify the 5 C’s – they stand for:
So, the CROWD is the number of potential customers that come into contact with you – these are potential prospects that may wish to buy your product or service.
CONVERSION is how many of the CROWD you convert into actual sales.
COST is the amount you charge on average per sale.
The CONTINUITY Is how many times that customer buys from you.
Then if you multiple all of those together, you get the cash result.
CROWD multiplied by CONVERSION multiplied by COST multiplied by CONTINUITY = CASH
So, what most turnaround people and business owners do is think “How do I get more leads”. So, you need to increase your crowd – so whilst there are many free & simple ways to increase your leads & the CROWD in the main its spending money such as on advertising, or google AdWords etc. So, I am not saying don’t do this, if you can afford it why not, but if you can influence the other 3 C’s by just 5% in most businesses you can get 20-40% additional cash.
Think about it, if you can improve the CONVERSION through better sales process, you can increase your prices slightly, and you can get your customers buying from you more than they do now, you will generate more cash.
It’s much easier to influence these Cs by making improvements. It’s much harder to generate more leads.
In my book we look at a specific case study of a business I was involved in were by influencing the Cs we generated an additional £2m in cash without actually spending much.
So how do you influence the Cs:
These ideas and methods are just generic and we don’t have enough space in a blog to go through them all but here is something to get started with:
CROWD – yes looking for free & simple ways to get more leads – you could of course spend money on advertising but what about free PR, social media?
CONVERSION – when a customer comes into contact with you how easy is it for them to buy – is your website slick and easy to buy from? If customers buy face to face how is your store laid out? Do you do special offers to encourage the sale? Are your staff trained on how to sell & close? What is your sales process? If you sell over the web you want it to be as easy as it is to buy something from Amazon!
COST – can you put your prices up? In most markets its uber competitive and hard to do this. What about the products or services or don’t sell many of, could you put these prices up by 20-30% and leave your main product the same price? For example, you may be selling cars, most cars typically in my experience are usually priced at the same level – if you buy a ford fiesta from one garage to the next, brand new, they are generally the same sort of price. But what about upselling a service plan? You may charge £99 for this, but could you charge £125.
CONTINUITY – this comes back to keeping your customers engaged – do you have special offers, or a loyalty scheme – a company that does this well is Vistaprint. If you ever order printed material like business cards from them, when you have made your purchase they provide several offers only available at point of sale i.e. you have just bought 1000 business cards for an extra £2 you can have another 1000 or do you want to get some compliment slips or letterhead for 50% – offer only available today. Do you send our e-marketing, to keep customers coming back to your website?
So, what you need to do in your business is go and brainstorm with your key people how you can influence each C by at least 5% – but they are not allowed to suggest anything that will cost money. You will be amazed what some time out and a whiteboard/flipchart can do in terms of team creativity.
Try it you may be surprised at the results.