7 Ways to Make Your Business More Valuable in 2023
COVID-19 has made it far more difficult to operate many types of businesses, and your operation may permanently change moving forward. Some owners will stick with business practices they’ve implemented during the pandemic, to protect their company during another crisis.
You can use the lessons learned during the pandemic to build a more valuable business, particularly if you’re interested in selling your company down the road. As the country moves toward a vaccine, use these tips to build a more valuable post-pandemic business.
1. Spend more time with your customers.
If you’ve managed to break even or generate a profit during the pandemic, it’s because you have a core group of loyal customers. These are the people you really want to serve, and you should spend time with them. Try these approaches:
Survey: Ask your repeat customers to complete a short (under 5-minute) survey and provide an online link. Offer a small gift to motivate people to complete the survey. Gather the data for analysis.
Customer support: When a customer calls or emails you or your support team, use the contact as an opportunity to ask questions. Are they satisfied with your products and services? Is there confusion about the buying process or using the product? Document their responses and look for trends.
In-store visits: If customers interact with your staff in person, pay close attention to their wants and needs. What questions come up most often, and what products are they buying?
All of this information helps you to define your ideal customer, which is the person you need to serve. If you serve the ideal customer, you can increase the customer lifetime value, or CLV. CLV is a measurement of how valuable a customer is to your company with an unlimited time span, as opposed to just the first purchase.
Understanding your best customers and serving them will increase profits, and the value of your business. The Harvard Business Review explains the value of repeat business this way: “Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.”
Make it easier for customers to find the products that they want, and create an easy purchasing process. Consider these ideas:
2. Improve Your Website Navigation
Is your website easy to navigate? Can a customer quickly get to where they want to be on your site? Ask your staff what they think about your site, and ask a marketing expert to assess the site design. Make sure your messaging speaks to your customer and provides the information that is important to them. Does your website effectively communicate your Unique Value Proposition? Storyband says your website should communicate what customers get when they purchase your product or service.
3. Reward Your Customers
Repeat customers drive your sales and profits, and you can use creative ways to reward them. Create reward programs for your best clients, and notify them about new products and product updates. Ask for testimonials, and use this information on your website and through social media.
4. Simplify Your e-Commerce System
Build a smooth process for buying your products online, and minimize the effort required to make a purchase. A recent Salesforce State of the Connected Customer report found that “74% of people are likely to switch brands if they find the purchasing process too difficult.” Make the process easier, so customers make the purchase.
5.- Provide Useful Content
Consider starting a blog or start a YouTube channel, and provide content that educates your audience and solves their problems. Over time, clients and prospects will use your site more often, and spend more time during each visit. Provide useful content, and you’ll increase website traffic and sales.
6. Review Your Pricing and Sales Mix
Many companies can charge more for their products, but don’t perform the analysis to support the decision. Raise prices on a small number of products and assess the impact on sales. If customers keep buying, use the higher price moving forward.
Compute the profit margin for each item you sell. Profit margin is defined as sales / net income, and it represents the amount of profit on each dollar of sales. Use profit margins to compare the profitability of products with different sales prices.
Analyze your sales mix, which is the percentage to total sales generated by each product. Once you determine the profit margin on each product, shift your sales and marketing efforts to the most profitable products. When you change your sales mix, you can increase your profits.
7. Implement a Formal Collection Process
Use an accounts receivable aging report to monitor unpaid invoices. An aging report groups receivables based on the date of each invoice. A typical report lists the dollar amount of invoices 0 to 30 days old, 31 to 60 days, 61-90 days, etc.
You need a formal process for accounts receivable and collections, which includes both emailing and calling customers with unpaid invoices. You might email when an invoice is over 30 days old, and call the customer if an invoice is outstanding for 60 days. A formal collection process will generally increase cash collections.
A Surefire Way to Increase Value
Investors are always looking for well-managed companies to buy. Use these tips to increase the value of your business and contact a professional at Raincatcher today to learn more about maximizing your business value.