TheNewsletterForLocalBusinessOwners
LookingToBuildABetterBusiness
Broughttoyouby:EastPartners
(08)83641655www.eastpartners.com.au
July2015
InsideThisMonth’sIssue
Page1:ThoughtOfTheMonth
Page2:CreatingAnEffectiveAgenda
Page3:DumbCriminals
Page5:TheHugePitfallsOfReducing
YourPrice&WhatToDoInstead
Page7:WhatClientsSayAboutUs
Page8:BetYouDidn’tKnow
Helpingyoucreatetheperfectbusiness!
QuoteOfTheMonth
“Peopleseldomimprove
whentheyhaveno
othermodelbut
themselvestocopy.”
OliverGoldsmith
“ThePlanFor
GettingALost
CustomerBack”
Headshotofmain
partner/director
W
ChristopherEast
elcometotheJulyissue
behaviours
Director
of BB. On average, and
on the part
foravarietyofreasons,
of
most businesses will lose about
employees of the business
20% of their existing customers,
organisation with which they
clientsorpatientseachandevery
interacted
year.Customerscomeandgo.It’s
82% of a business’s customers
simplyafactoflife.
leavingbecausetheyareunhappyis
Some of the reasons for customer notgoodnewsinanyone’sbook.
attrition (customer losses) are
unavoidable but others are in the But what is good news is that
complete control of the business because 68% of people leave
through indifference, with a bit of
owner.
‘hand‐holding’ and ‘cuddling’ some
According to a recent survey by of those customers can be ‘won’
Sales and Marketing Executives back.
International,
customers
stop
Eachname onyourpast‐orlapsed‐
buyingforthefollowingreasons:
customer list represents the
marketing cost to acquire each one
 1%die
in the irst place and all the hours
 3%moveaway
upon hours of your time spent to
convertthemintocustomers.
 5%developotherfriendships
Plus, according to the US Of ice of
Consumer Affairs, it costs six times
 14% are dissatis ied with the more to acquire a customer than it
productorservice
does to keep an existing one.
Therefore your past‐customer list
 68% leave because they were
becomesevenmorevaluable,not
treated
with
indifference,
disrespect, apathy or neglectful
Continuedonpage2...
 9%leaveforcompetitivereasons
Proven Strategies To Help You Build A Better Business
CreatingAnEffectiveAgenda
avingaprintedagenda  And third, they ensure you
Continuedfrompage1...
only because the business should
already ‘have’ them, but because
those past customers already know
the business, which makes them far
morelikelytobuyagain.
isoneoftheimportantdon’tforgettocoverthemain
ingredients for creat‐
ingasuccessfulsalesmeeting.
Don’t think of them as ‘past’
customers. Think of them as
‘inactive’ customers with the
potentialtocomebackandbuyagain
and many more times in the future.
But they won’t do it on their own –
notmostofthetimeanyway.
But you don’t have to restrict
You
should
No, you have to get proactive and
startworkingthatcustomerlistwith
a solid plan and goals for creating
more sales using those valuable
names.
for
seminars,
“Createaplan
forwinningback
lostorlapsed
customers”
It’s likely you won’t have contacted
the names on your past‐ or lapsed‐
customerlistforawhile,orifalotof
thosecustomershavenotcomeback
on their own for a long time, you
need to institute a ‘lost‐customer
reactivationstrategy’.
pointsofthepresentation.
Theexampleshownonpage4is
atemplateofthestyleofAgenda
weuseforourregularmeetings.
the use of an agenda to just
face‐to‐facemeetings.
use
There’sno‘rocketscience’when
it comes to creating an effective
them
agenda. The fact that you use
webinars,
one is the most important
teleconferences and any other reasonforhavingone.
interaction
you
have
with
But let’s just cover the main
your existing and prospective
customers,clientsorpatients. points that you need to
address…
Agendas
have
become
‘endangeredspecies’.
an  GIVEITAHEADING
Make sure you give your
They are rarely used today in
agenda a title. Ideally, it
business,buttheyhavesomany
shouldincludeabene itofthe
advantagesandbene its…
meeting and add a sense of
importance.
 First, they give you control.
It’s a little‐known fact that
an agenda gives complete
One of the best ways to get past
or lapsed customers back is with a
control to the person who
goodletter(a‘CustomerReactivation
createditinthe irstplace.
Letter’). But whatever you do, put a
planinplaceforwinningthemback.
It will be time well spent and you’ll
besurprisedattheresults!
 Second, they show you’re
CE
organizedandprofessional.
Noticeintheagendaonpage4
the title is ‘Building A Better
Business’.
The meeting is therefore
structured around this one
bigpromise.Makesureyoudo
the same thing and create a
2
Proven Strategies To Help You Build A Better Business
CreatingAnEffectiveAgenda
title that gives gravitas to the
areimportanttothecustomer
meeting.
orpotentialcustomer.
 WRITE IN THE ‘LOCATION’, (Asanaside,youshouldsendthe
‘DATE’,
‘TIME’
AND agenda to the person you’re
meetingacoupleofdayspriorto
‘ATTENDEES’
the meeting to ask if they want
Youragendaisaveryeffective toaddanythingtoit.Thisisjust
sales tool, but it also acts as a good practice, so make sure you
reminder and a con irmation doit.)
ofyourmeetingdetails.
 ADDANOTESSECTION
Enter the location, the date,
The notes section is more
They’reFrownyFacesThisTime.
time and the names of the
importantthanmanythink.
Saturday,April25th,2015
peopleattendingthemeeting.
Dumb
Criminals
 ENTERTHEMAINITEMSYOU
WANTTODISCUSS
Thepersonyou’remeetingwill
Asmuchaswesophisticatedhumanswould
use it to write their thoughts
like to pretend otherwise, food is just as
on (it’s always best to have
muchamotivatorforusasitisforanimalsin
training. When food is involved, we’ll do it.
Now simply list the high‐level
Invite us to your wedding, your graduation,
the notes with the agenda
items you want to discuss
otherwise they could easily
duringthemeeting.Makesure
belost).
you don’t have too many
But equally as important, you
points on the agenda. Half a
should use this notes section
dozenpointsisadequate.
to write down important
Thisman,thoughdrivenbyhunger,wasnot
things that will help you close
interested in talking to anybody. While
thesaleormoveittothenext
robbing a house in California, he located
Youmustthinkcarefullyabout
the main elements of the
meeting.Don’tjustwritedown
the meeting and what things
baby shower, your family friend’s uncle’s
retirement party. If there’s free food
stageofthesalescycle.
what irst comes into your Simple. Easy to use, but very
head.
effective. From now on, make
Think about the key parts of
your nephew’s baptism, your third cousin’s
sureyouuseanagenda!
involved, we’ll do what we’re trained to do
best – feign interest in small talk with
strangers.
somebiscuitsintheowner’spantry.Tummy
full after eating this unexpected snack, he
decided to take a little nap on the couch.
AccordingtoHP,thisunorthodoxGoldilocks
wasawokenbytheownerofthehouse, led
outthebackdoor,andwasimmediatelymet
byanof icer’sstungun.Nexttimeheshould
Continuedonpage4...
justgotoMcDonalds?
3
Proven Strategies To Help You Build A Better Business
CreatingAnEffective
Agenda
Continuedfrompage3...
4
Proven Strategies To Help You Build A Better Business
TheHugePitfallsOfReducingYour
Price&WhatToDoInstead
In reality, there is rarely a good reason to
reduce your prices. No matter what you
think,mostpeopledoNOTbuyonpriceand
pricealone.Infact,researchoverthelast6
recessions has shown that only between
5% and 20% of people buy on price. Most
people think it’s the other way around! So
let’s take a look at the effects of reducing
yourprices...
SteveHackney—Helpingyoutoquickly
growyourbusiness
A
s the economy struggles to recover,
and competition gets more and
more ierce, we thought it was
important to bring to your attention the
problems you encounter by reducing your
prices in the hope that this will bring you
moresales.
One of the most common and most costly
traps business owners fall into has to do
with the perception that the quickest way
toincrease cash low when sales are down
istohavea‘sale’.
On the surface, the concept itself seems to
make sense. We need more sales, so we
lowerourprices.
Lower priceswillattract more buyers who
will purchase more of our products at the
reduced prices. And we’ll make up for the
money we’ll lose with the lower prices by
theincreasednumberofsales.
But the reality is, rarely is this strategy a
success.
Having a sale, reducing prices in order to
attract more customers, can often be the
kissofdeathforbusinessesunawareofthe
biggerpicture.
Let’sassume,forillustrationpurposes,that
your business operates on a 30% margin
and you want to reduce the price to
increase sales. If you lower the price just
10%, you’ll need to increase the number
of sales you make, or the number of
customers you sell to, by 50% just to
maintaintheoriginalpro it.
Don’t believe it? Let’s walk through the
numbers…
Let’ssaythatyousellanitemfor£100,and
thatyourtotalcoststoacquirethatproduct
andgetitoutthedoorcomesto£70.
Thatleavesyouwithanetpro itof£30on
thatitem.
Now,let’ssaythatyoureduceyourpriceby
10%.Younowsellthatitemfor£90.
You didn’t do anything to reduce your
productcostsoryourexpenses.Allyoudid
is reduce the amount you charged your
customers.
Ifyousubtractyour£70costsfromthe£90
saleprice,younet£20.
Now, if you subtract this £20 from your
previous pro its of £30, you end up with a
£10 difference. Divide the £10 by £20, and
youget50%.
Sotogetback to the same pro it level that
youwereenjoyingbeforeyouloweredyour
prices,you’llhavetosellmoreitemsorthe
same number of items to 50% more
customers.
Continuedonpage6...
Cryptic
PuzzleOf
TheMonth
Mybathhastwotapsandaplug
hole.
The cold tap on its own ills the
bath in 18 minutes, the hot one
in15minutes.
The plughole can drain the bath
in10minuteswiththetapsoff.
How long will the bath take to
ill if I leave both taps on with
theplugleftout?
ANSWERONPAGE6
5
Proven Strategies To Help You Build A Better Business
TheHugePitfallsOfReducingYourPrice
Continuedfrompage5...
Now, here’s another problem most
businessesfailtotakeintoaccount.Noone
knows you’re having a sale unless you tell
themaboutit.
Soyouneedtoadvertiseorsendsomething
out to let everyone know you’re having a
sale.
Andifyouexpecttoattractmorecustomers
andsellmoregoods,youmayneedtobeef
up staff, salespeople, delivery, packaging,
money processing, accounting, stocking,
signage and any number of additional
things that you may not initially consider
and all of which further increases your
costs.
So when you look closely and carefully at
having a sale, you may have to sell
considerably more than the 50% to even
comeclosetobreakingeven.
IMPORTANT
REDUCING PRICES IS THEREFORE
SOMETHING YOU NEED TO THINK VERY
CAREFULLY ABOUT. REMEMBER, VALUE
AND PRICE ARE LINKED – SO PROVIDE
MOREVALUEANDYOU’LLSTILLGETTHE
SALES!
TheValueOfIncreasingPrices
In our estimation, we believe that 90% of
ALL businesses charge too little for their
productsandservices.
Often people are scared to increase their
prices, and business owners rarely test
differentpricepoints(doyou?).
But having carefully targeted your
prospects and customers (like we always
advise you do), you are in a position to
charge premium prices because you are
seen by the market as THE go‐to company
fortheirspeci icrequirements.
And there is no quicker way of increasing
your pro its and the success of your
business than by increasing your prices.
Let’stakealook...
Using the same 30% margin as in our
previous example, instead of decreasing
pricesby10%,youraisethemby10%.
CRYPTIC PUZZLE
ANSWER
Answer:45minutes.
Theresult?
You can now maintain the same pro it
margin with a 25% reduction in sales
volume… either in the number of items
sold,orinthenumberofcustomerssoldto.
You could actually lose one out of every
four customers and still make the same
money.
Now, let’s compare two identical
businesses which sell exactly the same
products.BusinessAlowerspricesby10%
andBusinessBincreasespricesby10%.
As was pointed out, Business A has to sell
50% more, and Business B can sell 25%
less,andthey’llbothmakethesamepro its
asbefore.
While the owner of Business A is working
his/hertailoffjusttobreakeven,Business
B owner is cruising along without all the
stress, worry and other problems, and yet
ismakingthesamenetpro its.
Furthermore, what is often surprising to
business owners is that when they do
increase their prices, the opposite of what
they expect actually occurs. Instead of
losing customers, they actually gain more
customers.
Why?
Becausethehigherpricesaremetwiththe
perception that your products or services
are worth more and therefore this
perception of ‘added value’ gives the
businessawelcomein luxofsalesitwould
previouslyneverhavereceived.
We have numerous examples of this. For
instance,aphotographerwaschargingjust
£450perdayforhisweddingservice.
With very little change to the way he
carried out the service, he increased his
pricestoover£3,000inthreemonths.
Arestaurantownerincreasedherpricesby
20% and saw an immediate increase in
bookings.
In24hours:
Thecoldtapcould ill80baths
Thehottapcould ill96baths
Theplugholecoulddrain144baths
Therefore,in24hours,wehave80+96‐144
bathsfull=32baths.
Thereforeeachbathwouldtake45minutesto ill.
A jewellery store increased prices 15%,
resultinginanincreaseof£25,000amonth
insales.
These are not isolated incidents. If you get
your target market right and you deliver a
good‐quality product or service, increasing
your prices and increasing your sales is
NOTapipedream.
So what if you’re selling a commodity‐type
product or service, whereby people can
easily shop for the best price? Well, it’s no
different. What you have to do, though, is
create a level of service that is unmatched
byanyofyourcompetitors.
This includes offering superior delivery
times, quicker service or using a powerful
guaranteewhichnoothercompetitoroffers
and creating ‘premium’ products or
services that customers will be happy to
paymorefor.
Soevenifyou’rereluctanttoincreaseyour
prices, concentrate on giving more value
andyou’llstillgetmanymoresales.
As long as you create a gulf of value
between you and the competition you’ll be
abletoincreaseyourprices.
Believe us no matter what you sell,
increasing your prices is something you
shouldlookatdoingnow.
Of course, don’t just make a wholesale
increase right across the business.
Increasing your prices is a tactic that
should be approached like all your other
tactics. Test small and then roll out when
youhavesuf icientevidencethatitworks.
6
Proven Strategies To Help You Build A Better Business
WhatOurClientsSayAbout
EastPartners
East Partners has been my
accountantandadvisorformany
years and over that time any
challenges have been dealt with
promptly, professionally and
with high regard to my needs
and expectations. East Partners
has a solid client‐ irst ethic and
whist numbers are always
numbers, they bring a personal,
human touch to the business,
making clients feel comfortable
and a part of the East Partners
family. Their out‐of‐the‐square
Weareexpertsathelpingourclients
inanciallymanageandgrowtheir
business!
thinkingandadditionalservices
makethemtheperfectchoicefor
individualsorcompanieslooking
for a complete service and
solution. I have recommended
EastPartnersmultipletimesand
willde initelydosoagain.
Galen Kanti‐Paul Director ‐
RhysPartners
East Partners has not only been
our accountant and business
adviser for the past nine years,
but has been an integral part of
our company. Their support and
handling of our self‐managed
super fund, company inancials
and commercial interests has
beensecondtonone.
RodSawtellDirector‐
DavieDigital/PortDisplays
East Partners have always
shown genuine interest in
helping us achieve ef icient
accounting and taxation goals. I
appreciate their openness and
honest approach to any queries
and I must say they are always
ready to answer our calls and
solve any problems that may
occur.StratosPourasOwner‐
Cork&CleaverRestaurant
I have been a client of East
Partners for over ten years. The
reasons I keep going back for
their services is that East
Partners has a friendly attitude
and operates with integrity.
These attributes have built trust
and I now rely on East Partners
forallmyaccountingandwealth
managementneeds.
Shannon Slater Director ‐
FragiletoAgile
BrainTracker:
HowMany
WordsCan
YouFind?
Using the BrainTracker grid
below, how many words can
you ind? Each word must
contain the central R and no
letter can be used twice,
however, the letters do not
have to be connected. Proper
nouns are not allowed,
however, plurals are. Can you
indthenineletterword?
Excellent: 29 words. Good: 24
words.Average:16words.
7
Proven Strategies To Help You Build A Better Business
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Accounting&BusinessServices...
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BusinessBUILDER–RaisingTheFundsToFuelYourGrowth
Pro itSAFE–KeepingYourMoneyInYourHands
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ComplianceServices:
yourbody.
 An average person will spend 25 years PersonalTaxReturns|IncomeStatements|BusinessAccounts|
CompanyAccounts|CompanyTaxReturns|CompaniesHouseReturns|
asleep.
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OtherUniqueBene its:
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 FREENo‐ObligationInitialMeeting
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(08)83641655
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8
Proven Strategies To Help You Build A Better Business