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April 2008

Nation of Bulimics - not the eating kind

One of the pleasures of our Sunday mornings is reading the Saturday Times on our leisure - and loads of coffee to go with it, 3 cups at least. It's also the only paper we read.

This morning Janice Turner's column caught my eye - she's one of my favourite columnists, always takes a 'different but thought-provoking' view on news-issues. It could be that my partner and I originate from The Netherlands, THE nation of prudent savers where a credit card is still alien to most and something you only might use when going abroad to a far, far away country - her article had me nodding my head in total agreement.

Shop, Eat, Purge - We've become a nation of bulimics

It starts with the revaluations from John Prescot on his bulimic tendencies but then turns into a typical Janice Turner interesting twist on the matter, by making a comparison many Brits would not really care for to hear or read. One of last paragraphs really brings the message home:

"But now when we drink more expensive beer - land that once grew hops having been turned over to ethanol-producing corn - we have some distant connection with Asia's empty rice bowls. Maybe we will realise the insanity of pretending we are saving the planet by pumping the West's SUVs with the hungry's cereal crop. Maybe we'll realise that the only solution is to consume less.

And when I hear teenagers contemptuous of a model of mobile phone because it's six months old, or when a young woman with a good job tells me she has 50 pairs of shoes, £6,000 on her cards, but thinks she'll never own her own home, I wonder if this is a bad thing."


Cuisine ala Givers Gain

Marketing genius Paul Gorman just got back from holiday. His latest post on LeaveThemInTheDust relates a wonderful true story how the business and life principle of Givers Gain comes up trump every single time:

Two restaurants: one rich, one poor.

A simple story about two different restaurants in the area where he has been on holiday makes powerful reading, and for those still wavering about the idea of givers gain should take the lesson to heart - it is sure to make you 'profit' one way or the other and feel good about it too.

At Wood You like our hedgehog concept is based on the Givers Gain Principle and just ask our modern account how well that works for us, short term and especially long term.

Paul_gormans_book And Paul, at the off chance you're reading this little post on the KissBusiness blog yourself - when is your excellent book:

How to Out-sell, Out-market, Out-promote, Out-advertise, Everyone Else You Compete Against, Before They Even Know What Hit Them

available again? At the moment I've got hold of my neighbour's copy she (Nicole Kofman - Dutch like me - of Smartaupairs) kindly let my borrow - but I rather have my own brand new copy for keeps!

(And I'm sure you can find your way back to the lovely village of Charing ;-), which by the way seems to be taken over by Dutch entrepreneurs - all of the female kind!)

 

Rapid Accounting - as easy as 1, 2, 3, 4

As (Dutch) qualified bookkeeper 'doing-the-books' is almost second nature to me and I really took time to select that accounting package that does everything I want it to do (and preferably more). For that reason I recently switched from my trusted and reliable MYOB software to Mamut Enterprice (which integrates Customer Relationship Management, Accounting, Webshop, Sales & Purchasing and more into one simple system).

But that's me - facts, figures and statistics 'nut' (or 'freak' as my partner regularly compliments me), 99 out of the 100 small business, self-employed traders or service providers will be more than happy with a less complicated, user-friendly simple piece of software that replaces the 'old-fashioned' pencil and paper cash-book, saving time and money.

And time and money are the two main things you as a starting business, a small business owner or self-employed trader can't have enough of for doing the normal day-to-day work, be it on the job or sourcing new clients. But your accountant, the Inland Revenue and for some the 'VAT-man' come knocking at least once a year to see and check the results of your normal day-to-day work.
(Side-note: if you have an accountant that really only comes knocking once a year, find another one immediately - a modern accountant should not only concern him/her self with your financial annual result, he/she should actively be involved as business consultant or advisor to help you grow your business any which way he/she can!)

Our own modern accountant has, on request of many of his clients, designed the Rapid Cash Accounting Package - as simple as 1, 2, 3, 4.

It works like any other ledger-system (cash-book): every line contains the 4 W's of every transaction:

  • Money coming in:
  • Who's paid you money (clients name)
  • When did he/she pay you money (date of payment)
  • Where was the money paid into (cash, bank, card)
  • Why was it paid (product or service sold)
  • Money going out:
  • Who did you pay (suppliers name)
  • When did you pay
  • Where was the money paid from (cash, bank, card)
  • Why was it paid (product or service bought)

But with the Rapid Cash Accounting Package that's all you have to do! Fill in the 4 W's per transaction and the program does the rest. It calculates the totals of every column, from bank balance to income or cost category after every transaction.  And at the end of every month it transfers your bank, cash and card balance automagically to the next one - plus at any moment in time you can check your year-to-date results.
Once again: all you have to do is fill in the 4 W's per transaction - as simple as 1, 2, 3, 4.

Watch the video below to see how easy the program is:


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The revised 2008 version is now available for instant download (this RCAP page contains much more information on the program) and as a very special re-launch offer the first 25 purchasers of the revised program only pay £ 17.95

= a whole £ 50.00 discount on the normal price of £ 67.95

My (volunteer) life as treasure of the BNI-Ashford chapter was made very easy with an earlier version of the program, the revised 2008 version is updated with even more benefits for the user.
So hurry before the special re-launch offer runs out - and to be honest even £ 67,95 for a program like this is worth every penny of it.

Kissawardbutton1_3 It deserves a K.I.S.S.-award!


The Problem with "New Customers Only"

No matter which Business Advice book you read eventually they all tell you to concentrate on repeat orders to keep your business cash-healthy and growing. More and more I see the terms: Front-End and Back-End sales (or purchases) creeping up.
There are now two types of sales: Front-End (to new clients you have managed to find) and Back-End (selling more items, more frequent and for higher prices to your existing clients).

Or in other words:

Front-End = customer acquisition
Back-End = lifetime value

Last week I finished reading Richard Lomax's "The 7 secrets of Highly Effective Marketing" - not yet available from amazon.co.uk, only from his own "common-sense-marketing" website after going through the IMHO most ineffective extremely long landing-page I've seen recently, and I don't really understand why he keeps sending me emails to encourage me to buy the book and get 7 FREE marketing reports with it when I'm one of the first 100 buyers of his book?!?! He's not practising what he's preaching in free report 2: "How To Avoid The Six Most Common, Deadly Sins Of Sales Communication" - but that's beside the point now).

Anyway, back to the subject on hand: back-end versus front-end sales, marketing and strategies.

Richard Lomax states (pages 100-101, secret #6):

"The critical step at the front-end is to make it so absolutely irresistible for a targeted new customer or client to buy from you for their very first time, that they find it impossible NOT TO.

The back-end purchases are where the true profit and growth potential of your business really lies. So how do you go about achieving a powerful Front-End customer acquisition strategy?
Instead of offering your complete, normal product or service in the first instance, think of how you can make just one aspect or facet of segment of your offering available for a fraction of the normal price.

Don't focus on making your maximum income at the front-end.

Be content to gain new customers on a minimal margin or for free on a break-even basis"

Let's look at this from a printing company point of view: offering to print business cards with a 50% discount to any new qualified lead. If successful and done with grate care and great overall service a business will be over the moon and decide to have its letterheads printed by the same printing company (at normal rate of course). Then follows the envelops with logo, complimentary slips, the yearly Christmas cards with logo and seasonal wishes, one-off marketing projects, company brochure etc in the following years.

Or in other words: 50% discount on a small item (and business cards aren't the most expensive stationery you will ever buy) turns a qualified lead in a loyal client for an average lifetime of 5 years. So a true statement? The chart below does indicate so.

Chartpc

Now lets look at it from what I've come to call a NCO' - "New Customers Only" business - point of view, great example our own company: wooden flooring.

Chart below shows our standard life-time value build-up per average customer:

Chartnco

Don't focus on making your maximum income at the front-end?

Wooden flooring is a definite NCO - our maximum income does come from the Front-End first purchase of a converted qualified lead. We can't be content with a minimal margin or to just break-even on that first purchase.
And we're absolutely not an unique business.

What's your type of business: Front-End or Back-End based? I really would like to know the following of all NCO's:

How do you look at all those plentiful highly effective marketing strategy books, blogs, article, reports etc that all seem to focus on Back-End businesses?

Tell me right here in the comment box, please!