I was talking to a business owner this weekend who was sharing with me how he marks up every product he sells by 40% and by doing that, can afford to guarantee the product and installation to his customer. It’s good to understand the parameters of your pricing. If we can’t back up the sale, we’re not gonna sell very much or retain a loyal customer. I personally guarantee all of my products and services with The 100%, No Questions Asked, Hamilton Guarantee.
Conversely, if your pricing strategy prices you out of what your market can bear, you’re not gonna sell very much, either.
Sometimes, it’s more important to know what you can risk to, in effect, ‘buy’ your customer’s loyalty and determination to choose your company above your competition. The 2014 customer will not be loyal or determined to buy anything that doesn’t directly improve his circumstance immediately, drastically, and valuably. Notice I didn’t say ‘affordably’. That’s a relative word that we should toss out of our marketing lingo for good.
Business owners differ from entrepreneurs. Did you think they were the same thing? I did, too. After my last venture, Zero To Sixty Marketing LLC, I learned that there’s a HUGE difference between an entrepreneur and a business owner. Our client base was made up of both. One is so busy working on his business that he can’t afford to have any vision, the other is so vision-centric, he needs to hire the specialists necessary to make his vision happen.
The business owner and the entrepreneur have two entirely different sets of numbers they need to know that directly impact the growth of the company. Only one will ‘buy’, retain, AND grow customers and relationships that are steeped in a fierce determination to use only YOU, and not leave you for what may look like, on the surface, or may actually be, a better deal.
Loyalty is purchased today. The entrepreneur understands that loyalty is neither deserved or earned, though in a perfect world – in your grandfather’s world – it was and ideally should be. But it’s not. You have to show up in a MAJOR way for your customers, and it’s going to cost you something just to do it, let alone the investment of time and money required for you to indeed be deserving of earned loyalty.
A business owner looks at his numbers and decides that if anything has to go, it will have to be the marketing budget. An entrepreneur will eat bologna for a week to pay for an ad.
A business owner needs to know overhead, projections, and markups. A business owner needs to know deadlines and variables. A business owner is focused on the end of the week, month, and quarter.
An entrepreneur, on the other hand, needs to know ‘how’.
How to reach the most people.
How to convert the most people. (Turn a prospect into a customer.)
How to get it done.
How to get paid.
All the other numbers matter, too, but the focus is WAAY different, don’t you think?
Here are some more numbers that you need to know if you’re wondering which term describes yourself. I call this list my ‘numbers on the 8s’:
- 80% of American business owners fail in the first 5 years of business. Of the 20% left, 80% of that number goes out of business in the following 5 years.
- 80% of Americans are NOT business owners, but 80% of American business owners operate companies of 8 employees or less. (Small Business Association)
- 80% of the world is looking for someone to ‘show them how to do it’.
Now here are some other interesting numbers …
Only 1 in 5 business owners know how to market their business – and do it.
The #1 mistake most people make when they try to grow their business is trying to get leads, customers, clients, or patients as cheaply as possible.
99% of people are doing the WRONG thing.
And my FAVORITE number of all??
2 people have to say ‘yes’ to make money.
What are your favorite numbers?