The Elements of An Offer

Every entrepreneur and salesperson should understand the elements of an offer.  Every person contemplating a purchase of any kind effectively looks for answers to four key questions when they encounter a salesperson. 1) What is it you are selling? 2) How much it will cost me? 3) What is in it for me? 4) Why should I buy [...]

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How to Find a Viable Customer

What do we mean by viable? It is a pretty good assumption that you own a car. Therefore, you are a potential customer for anyone selling a car.  However, it is equally likely that while you are a potential customer for a car dealer, you are not considered “viable” since you are not looking to buy a new car today. A consumer's [...]

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Improve Sales Target: Customer vs. Consumer

The consumer of a product or service may be different from the customer. A “Customer” is someone that pays for goods or services, while a “Consumer” is someone that uses goods or services.  Often the terms are used interchangeably, but each requires a different message during the sales process. Consider a business that provides piano lessons.  If asked what they do, [...]

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Efficiency Myth BUSTED

Ask the average person what made the car affordable and you would hear it was the way Henry Ford used the concept of the division of labor as outlined by Adam Smith in the Wealth of Nations. Most people naturally assume that if you have a job composed of many tasks it is better to focus on one task until it [...]

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Measure the Right Things

Social media companies love to say they have the magic formula to increase your followers.  This is a classic example of quantity over quality.  It is often easier to affect quantity metrics then quality because they are easily manipulated to achieve what looks like positive results. Unfortunately, many metrics like page-views or downloads are just feel-good metrics and not real metrics [...]

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Start-Ups Look For a Hole-In-One

As an occasional golfer, I don't have any expectation that I will hit a hole-in-one from the tee box.  I expect to take several shots, each one taking into account many aspects including distance, slope, angles and more, with each stroke getting closer to the hole.  I have learned that if my only goal is to hit the long ball [...]

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Understanding Operating Leverage

Operating Leverage is just one part of your Economic Model. Simply put, operating leverage is the relationship between fixed costs and variable costs. A construction business that rents a backhoe when they have a job that needs a backhoe will have higher variable costs and would be said to have low operating leverage.  The same company that owns a backhoe is [...]

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Understanding Sales Volume

Sales Volume is just one part of your Economic Model and works in concert with margins. Sales volume is simply the number of units you sell in a specific period of time, say in a month. You can be just as successful if you have a high-margin low-volume business as you could with a low-margin high-volume business. A Lamborghini dealership can afford to [...]

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Understanding Margins

Margins are just one part of your Economic Model.  Margins can be defined simply as the difference between your Direct Cost to deliver a service or a product (often called COGS or Cost of Goods Sold) and the price you charge the customer for that product or service. The basic coffee you buy at Starbucks costs about 10 cents to make, [...]

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Understanding Revenue Drivers

Revenue Drivers are just one part of your Economic Model.  Revenue drivers are how many ways you have to separate your customer from his money. A few years ago, I went to the Dixie-Stampede while I was in the Great Smoky Mountains.  The ticket price was a reasonable $45 per person, which is a sensible price for a dinner and a [...]

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