Ever felt like you should be selling more, or making more profit from the sales you are making – but for some reason it just seems like you’re spinning wheels – you know what I mean – lot’s of activity and not enough bottom line profit!
In this simple concept of the ‘Profit Grid” you’ll get the opportunity to take a fresh look at what products and services you are selling and evaluate whether you are putting your efforts in the right places.
I’ve done this exercise with a number of my clients, for some some it has made a significant impact on their businesses! One client was mainly selling secondhand marine diesel engines – that’s what his business had a reputation for and that’s where most of his energy and effort went. Problem was when we analysed the Gross Profit, allowed for the comebacks, hassle value, and the lower grade type of customer he attracted “Engines” did not fit in the Goldmine square of the profit grid! He also realised that he sold the occasional new marine transmission. they were low hassle value, never came back and attracted a better quality customer. He didn’t make a lot of money from them because he needed to purchase from a distributor and they didn’t give him much margin – so Transmissions fitted in the “Potential Goldmine” square. By negotiating a New Zealand Distributorship for a brand of transmissions and doing some savvy online marketing he quickly had a Goldmine product range that revolutionized his business! In fact after 18 months he was selling more transmissions in New Zealand that in all of Australia and he was offered that Distributorship as well! (Google ‘marine transmissions auckland’)
Another client was selling boring products that they have developed years ago into the New Zealand market. Every year they just kept selling – but not in huge numbers. As most inventors and creatives do they had sifted their focus onto new products that were chewing up R&D and marketing money – but not selling yet! The obvious solution was to take the boring old products that sold well in NZ and market them internationally. Often the solution is obvious and right in front of our noses – we just miss it because we are busy and haven’t taken the thinking time to reflect.
I define goldmine products and services as those that are in high demand. They don’t cause a lot of hassle, and they make you good money. Most businesses have goldmine products and services, yet very often they spend more time and effort trying to sell non-goldmine products and services. ‘Why’s that?’ you ask. They see goldmine products and services as boring.
An example from one of my “learning experiences” is an automotive dealership I was a partner in. We bought the business as a turnaround project and invested a lot of our time, effort and money into enlivening the car sales department –when we sold a car we made good money – or that’s what it looked like on the surface! Challenge was car sales was not a gold mine product in this business when we fully considered the bigger picture – we had inherited a bad reputation re car sales. We had too many comebacks, our stock was depreciating fast! The goldmine was actually in the servicing – cars always need servicing – it’s not very glamorous, but a very well run service department can make a lot of money and rebuild a quality reputation! In hindsight we would have been better to have ditched the car sales and focused on servicing!
If you think you don’t have any goldmine products or services then either open your eyes – they’re probably right under your feet looking dusty – or do something else! Life’s too short to try and sell something people don’t want!