Discover theHidden Profit

in Your Telephone

Key steps to unlocking the extra profit potential in any business

IntroductionAfter a period of growth, the threat of recession is looming - that is, if you believe the media!! So what does that mean to you?……..

To most businesses it means "batten down the hatches" and try to ride it out. They start cutting costs in vital areas like marketing and training in order to "save" money. In reality they are creating a "self-fulfilling prophecy!" In other words, they are likely to bring about the very thing they fear - loss of business.

That's where you have the greatest opportunity - while your competitors are cutting back, you move in and take the business. How? …. By being smarter and quicker than the majority. With the right approach you can:

•Gain more business

•Keep satisfied customers and

•Reduce costs

……………………..all at the same time!

The purpose of this report is to show you how you can do all three using a common business instrument that you currently take for granted…… namely, your telephone. Enough of the preamble, let's get started.

How to Make More Profit!

There are only two ways to make more profit ………

1. Sell more i.e. generate more income with the same costs or …….

2. Spend less i.e. reduce costs for the same level of income

If you do both together you give your profit a double boost as shown by the following formula:

More Income - Lower Costs = More Profit

Simple isn't it, but then you knew that much already

So, how do you go about making this formula work for your business?

Read on to find the THREE ways to increase sales and the THREE ways to cut costs ………………….

THREE Ways to Increase Sales

1. Increase your Customer base

2. Increase their frequency of purchase

3. Increase the average sale value

How to Get More Customers:

Most people think that the only way to get more customers is to advertise more, and that costs money! As we've already seen, in a recession they tend to cut advertising budgets rather than increase them, so they are likely to get less new customers rather than more. As things get worse and they cut costs even more, service levels decline and they begin to lose even their existing customers ……. The downward spiral continues! The answer however, is not to spend more on advertising - it is to Market Smarter!

The smarter way to market is to first of all get a better response to existing advertising and then to look for low cost ways to generate more business. One well established way to get a better response to your marketing efforts is to use a Freephone 0800 number. According to a number of research studies, a freephone number has been found to increase response by 200 to 300 percent - that's 2 to 3 times as many replies then normal. That's equivalent to reducing your advertising cost by two thirds (66%)! Similar market research has found that up to 80% of people will respond to a freephone number before ringing an advertiser with a standard STD number and almost 15% of people will only ring a freephone number!

Steal business from your competitors!

Bearing in mind the above research, it follows that using a freephone number will persuade potential customers to call you before your competitors, add this to the fact that your competitors may be amongst those "cutting costs!" and you have a winning formula for your business.

Sell The BenefitsEnsure a better response rate by making sure that your advertising focuses on the benefits to be gained by your customers dealing with you. Use a headline that emphasises one clear benefit - make sure you first of all find out which of your many benefits your current customers value most, then use that benefit as your headline. Build up your message throughout the ad by giving other benefits that show why new customers should choose you. Emphasise also how you give great customer service. New customers are often worried about the risk of trying a new supplier, remove that risk by giving guarantees and mention them in your advertising.

Measure the Results

I never cease to be amazed by the number of otherwise sensible business people who do not measure the results of their marketing! How do they know what works and what doesn't? The only way to make sure that you are getting value from your marketing budget is to measure the results in terms of:

•Response Enquiries Generated

•Conversion of Enquiries to Sales

•Contribution to Profit

One hidden benefit of using Freephone Numbers in your marketing lies in the call data provided to you by your Freephone service provider. This can give you the date, time and length of each call to your Freephone number and even the location the call originated from. This is very valuable in relating this information to your marketing activity.

Tip

Get more than one Freephone number and then use different numbers for different marketing campaigns. This way you can tell from your call data which calls result from which campaign. Very powerful stuff I think you will agree!

New From OldA great, low cost way to get more customers is to use referrals. This is where you get existing customers to put you in touch with friends, relatives, business associates etc. As you already know, "word of mouth" recommendation is the best form of advertising, but don't just rely on your customers to talk about you of their own accord. By putting in place a Referral Program you can ensure a constant source of new customers. But first a word of warning! Good referral marketing depends heavily on great customer service.

Giving Great Customer Service

Your customers are not going to recommend you if their experience of you is less than ideal. Take a look at your customer support programme and make sure you are giving first class service. Research has shown that what matters most to customers is the overall buying experience. Yes, price may be a factor and yes, the quality of goods and services is important, as is delivery etc. But it is the less tangible things that matter more, such as ease of contacting you; the response they get from reception and sales staff; the general perception of customer care; etc.

For example, the use of dedicated customer support telephone numbers is increasingly being used by larger companies to emphasise their customer service. These are more often than not Local Rate 0845 Numbers. An 0845 number allows a customer to call you at local rate from anywhere in the country - it gives the feeling of local service even when the customer is a considerable distance away. Increasingly customers are becoming aware of these special customer service numbers and are looking for them when dealing with suppliers. It all adds to the impression that you really care about your customer and this in turn adds to a feeling of comfort in dealing with you.

Speak Nicely to the Customer!Don't forget that the way your staff answer the telephone also has a major bearing on customer perception of service. You have probably experienced examples of poor telephone manner when ringing your own suppliers (or possibly ex-suppliers!!). Make sure that your staff (and even yourself) undergo telephone skills training and conduct regular follow up "refresher" sessions to keep them sharp. When you are away from the office ring in occasionally and note how the telephone is answered. Make occasional use of a "mystery shopper", i.e. get someone not known to your staff to make an enquiry and note how well it is handled, use the results for follow up training.

The Referral Programme

You thought I had forgotten about this didn't you? I just wanted to emphasise the importance of good customer service before continuing with referrals. The important thing about referrals is to create a system to make sure that you ask for referrals from customers on a regular basis. A great way to start is with customers who are referred to you. If they have come to you by way of recommendation, it is very easy to remind them of this when you ask them to recommend others. First of all check that they are happy with the service they have received, then acknowledge how important it is to you that they are happy, e.g.:

"I'm very pleased that you are happy with our service, it is important to me for two reasons. First I have a happy customer and second, I am very conscious of the fact that Mr …… recommended us and he wouldn't have done so if he didn't feel we would look after you….

Tell me, do you know of any friends or colleagues who might have similar needs to yourself? I would love to be able to help them in the same way."

When to Ask for ReferralsQ: When is a good time to ask for a referral?

A: Anytime your customer feels good about you!

• Just after completion of a sale

• During a follow-up customer satisfaction call

• Following the satisfactory handling of any ongoing customer contact

• As part of a special "customer only" promotional offer - send an invitation to the customer plus an extra invitation "for a friend"

Special Note: Whenever a customer gives you a contact name, ask them to give their friend one of your business cards to let them know who will be calling. Make the call within a couple of days so as not to let the lead go "cold". (Make sure that your 0800 number is on your business card to encourage the contact to call you first!).

The Importance of Follow-Up

Once you have a new lead from your referral programme it is important to follow up as soon as possible. You can do this by letter followed by a telephone call or, if you feel confident in your sales approach, by telephone as first contact. Either way you will mention that Mr …… suggested you contact them as you had been able to be of service to him and may also be of service to them. Generating a lot of referrals will obviously result in a lot more opportunities to make telephone sales calls to warm leads. This will of course add to your phone bill so it is important to make these calls as cost effective as possible. There are two ways to ensure that you do not waste money in this area.

Following Up

1. Make sure your telephone sales skills are up to scratch…………

It is important as a minimum that you are able to gain the attention of the prospect, generate interest in talking to you, create a desire to know more about the benefits you can offer and take the action necessary to take matters further - such as make an appointment or even close the sale on the phone. If you are familiar with the sales process you will be aware of the AIDA formula contained above. If not I recommend some good training in telephone sales skills.

2. Use a low cost telephone service provider……[such as Linctel :-) ]

By doing so you can save up to 60% on your telephone bill compared to some carriers’ standard call rates. Further savings can result from the difference in minimum call charges. For example one national carrier charges 4.2p minimum for each call - even if it's only a few seconds, whereas many other providers charge as little as 1p minimum. If you make a lot of short calls, for example because the person you want is not available or you leave a message on a voicemail or answering machine, you could be paying considerably more than you need by using the wrong service provider. The result of the savings possible here is that you can make a lot of extra, business generating, telesales calls at no extra cost above your current phone bill, you may even end up paying less!

SummaryJust a reminder, in this chapter we covered how to get more customers by:

• Improving response to advertising

• Getting customer referrals

We also discussed the importance of giving great customer service and pointed out four important telephone related items, namely:

• Freephone 0800 numbers to attract more customers

• Local Rate 0845 numbers to give added value to customer service

• Telephone skills training to ensure your business projects the best image

• Low cost telephone calls to cut telesales costs

Now let's look at the second way of making more sales:

i.e. increase the frequency of purchase……………….

Get Them to Buy More OftenI use a well known office supplies business for all my stationery purchasing, I don't even think about it - when I need stationery supplies I just pick up the phone and call them. Why?

Well first of all they gave me a good deal first time around. Then they continued to provide me with great products and excellent customer service. They send me regular updated catalogues and special offers. They take note of what I buy and customise their special offers to suit. But mostly they provided me with a dedicated Freephone Sales Order Line, So when I want more printer paper, ink cartridges, or other office supplies, I just pick up the phone and call them. My order arrives on my doorstep the next morning. Simple!

Why would I want to go anywhere else? What's more, their regular catalogues give me ideas that I might not think of - so I buy more.

Could you copy their Example?

Tips:

• Keep in touch - the more often you contact them, the more often they will buy

• Use Customised Special Offers - people love to get great deals

• Provide a dedicated Freephone Sales Order Line - remember, most people will call a freephone number in preference to a normal number!

By now you're probably thinking, this ain't "Rocket Science" just plain old common sense - and you would be quite right but let's face it, it isn't all that common. So use it, get ahead of the competition and PROSPER!

So, what about the third way to increase sales?

Get Them to Spend MoreIn other words - Increase the average order value

Once you've got the first two areas cracked, this one becomes quite easy. By now you have developed a relationship with your customers. They know you deliver good quality, brilliant deals and great customer service so when you recommend something new or something extra to them, they know it is for their benefit. So let's have a look at a few ways of achieving this:

1. Add-on Sales

Make sure that you and your sales staff are thoroughly aware of the relationship between the various products and services you sell, i.e. what normally goes with which? For instance, in my Viking example I might be ordering some more paper for my printer. If I use a lot of paper, it follows that I probably use a lot of ink as well! I am ordering paper because I have run out (or nearly run out if I'm organised) but I might not have checked my ink supplies. If I've forgotten then I'll probably run out of that in a day or two. So it's great customer service to remind me to think about that too e.g. "Thanks for your order for printer paper Mr Kirk. By the way, how are your supplies of ink cartridges? We have some good deals on HP cartridges just now." (they know from previous purchases I use HP cartridges!).

So, each time your customers call in an order (on your Freephone Order Line) don't just take the order and say thank you, go that step further and help them to remember those things they might have forgotten or might need in a few days from now. You save them time and trouble and you get more business. After all, they might go somewhere else for the other stuff! Again, this is where good telesales training comes in handy. By the way, I'll tell you where to get good sales training in the resources section at the end of this report.

Special Offers2. Promotional Offers

You see these all the time in supermarkets - buy one get one free, three for the price of two, buy a widget and get a free sporrit, money off coupons etc. Why do they use them - because they work that's why! I sometimes get asked "doesn't this reduce profit margins?" Yes it does for these one off offers, but it does increase sales for the period of the offer which means more profit overall. e.g. let's say you sell an item for £5 which costs you £2 so you make £3 profit. If you sell one you make £3 profit on the sale, but if you sell 3 for the price of 2 you make (£10-£6) £4 profit on the sale - an increase of 33% for no more effort and for the same overhead cost! What's more, if it's a limited offer they might buy 6 or 9 or 12…… while they are going! You also give the customer a better deal so they keep coming back.

So how do you promote these offers?

Passively: When they ring in to place an order for a widget, on your Freephone sales order line, you tell them about the special 3 for 2 offer. If they take it up, which most will - you've doubled your order value and increased the profit by a third. Easy!

Actively: You could mail your customers regularly with different offers either by mailing all customers with the same offer or mailing different offers to different customers, depending on their profile. Don't forget to repeat your Freephone Order Line in your mailing, it saves them looking it up so they can respond immediately!

Or, less formally, you could simply make a list of the customers most likely to respond to a particular offer and give them a call …. "Good morning Mrs Smith (or Julia, if you're on first name terms which you should be by now!) - you've bought quite a lot of sporrits from us this year so I'm calling to say thank you .. and to make you a very special offer. We've got a new batch available that we managed to negotiate a special price from the wholesalers, so we are offering them to our special customers at three for the price of two - that's a saving of a third off the regular price. You might like to check your stocks and see how many you would like to take at this price……….….."

New Products

I'm sure you get the idea. This isn't the high pressure selling they might be used to from your competitors, just another example of great personal customer service. And don't forget, now you are getting a great deal from your new telephone service provider, this activity will cost you very little to implement. The beauty of the promotional offer is that it can both increase the order value and the frequency of order!

3. Introduce New Products

Now that you've got a well established, growing and responsive customer base, you can capitalise on that by introducing new products and services. Having got to know your customers, their needs and buying habits (You have done this by now, haven't you?) You can begin to think about other ways to meet their needs. New accessories, a deluxe or super deluxe version of a product, a new product to meet a newly discovered customer need or a re-packaging of two or more products into a set. All of these are ways to increase order value or frequency of purchase and all increase the overall level of sales from a given customer base. Don't forget, what you can do with products you can also do with most services.

Once you have the new products you can have a New Product Launch to tell the world. You can mail your customer base to tell them the new products are now available on the regular Freephone Order Line (notice I keep emphasising this, you need to keep reminding them how to order). You can also introduce the new products to customers when they ring in to place an order.

OK, now you know the 3 main ways to increase sales:

Summary

1. Increase your Customer Base

2. Increase the Frequency of Purchase

3. Increase the Average Sale Value

And you know the 3 key ways in which your telephone can help generate even more income for your business namely:

1. Use a Freephone 0800 Order Line to Increase Sales

2. Use a Local Rate 0845 Number for Customer Service & "Local Presence"

3. Use a low cost Telephone Service to Increase Sales Calls for less cost

Naturally Linctel can provide you with all three - details of all Linctel products & services are in the Resources Section.

Now let's look at the second way to increase profits - reducing your costs.

3 Ways to Cut Costs

I have already mentioned that just cutting costs "willy nilly" can severely damage your business if you cut the wrong things. Often people cut things like training or marketing, but as we have seen, this is not the best way to survive. Smart marketing and good staff training are essential to survival and growth in hard times. So let's see what we can cut:

There are three key ways to cut costs and consequently increase profits - without hurting your business:

1. Eliminate unnecessary costs

2. Get better value from what you continue to buy

3. Find different, less costly ways of doing things

Each of these take a bit of work and a bit of research and analysis - but don't be put off. It's not difficult, it just needs a methodical approach.

Eliminate Unnecessary Costs

Q: What is an "unnecessary cost"?

A: One which does not earn its keep.

In other words, examine everything you spend money on in the business and calculate its contribution to profitability or business growth. Ask your staff and colleagues to contribute their ideas and views, often they see what they think is wastage but aren't absolutely sure because they don't have all the facts. They think it must be OK because you've been doing it for a while and somebody authorised it in the first place. Maybe the expenditure was once bringing a return but has long since ceased to do so.

If you still aren't sure, contact the supplier and ask what benefits you should be getting from spending this amount of money with them - see what the have to say. It may be that there are benefits to the business but you have stopped exercising them. If so, make sure that you start to get your money's worth. On the other hand maybe the benefits never materialised or were useful at first but no longer apply. Possibly the supplier has other products or services which would be a better alternative and provide value in your search for greater profitability, otherwise you have no choice but to terminate the expense.

By using this careful appraisal of your business costs you will almost certainly identify areas of waste or outdated expenditure that you can get rid of without harming your business.

Let's go on to look at the second way to save :

Getting better value for money……………………

Pay Less and Get More

Do you continually shop around for best value or, like many businesses, do you stick with the same suppliers year after year because it's too comfortable or too much hassle to change. For example, recent research carried out by Linctel Ltd showed the following results within the telecoms industry:

Over 50% of businesses still use BT for all their telecoms services, despite the massive savings resulting from the de-regulation of the telecoms industry. In fact, the telecoms regulator, OFCOM, recently expressed concern that UK business was not taking advantage of de-regulation to make significant savings and get access to a wider range of services. Similar results have been seen following de-regulation of other utilities such as gas & electricity!

Don't get me wrong, BT provide some good services but no single provider can give all business customers the best service and value package appropriate to their needs - there are just too many variables.

Further examples from the telecom research are as follows:

Of those who did change service provider, most changed as a result of being approached and "sold to" by the alternative provider - they did not go looking for an alternative. Not surprisingly, quite a number were dissatisfied and returned to their original supplier - never to TRY AGAIN!

In other words, they took the first deal that dropped in their laps and when it went wrong (because it was the WRONG DEAL for them!) they scurried back to the comfort of their original supplier - even though they may still feel they are paying too much.

Do Your Research

Another piece of research by a different telecom company found the following:

81% of businesses they canvassed said they would love to change service provider, and for as little as a 10% saving provided they could be guaranteed the new service would be no worse. In reality they could gain savings of up to 50-60% without noticing the difference if they did their homework. The truth is they were AFRAID to move, much as they would like to!

That is just one example from one industry, but it is repeated across all sectors of all industries throughout UK, and probably other countries too! A very successful businessman once said to me ….

True Profitability doesn't come from good selling skills - it comes from Great Buying Skills!

OK now, what about you? How many suppliers do you stay with due to fear of the unknown, too much trouble to change or just sheer lethargy?

So how do you acquire Great Buying Skills? Use the Ten Step Plan below……

The Ten Step Plan1. List your requirements and buying criteria very carefully - divided into essential & desirable criteria.

2. Where appropriate, draw up a detailed specification of those requirements

3. Research the market place for suitable suppliers. Use trade directories, the internet, word of mouth, Yellow Pages and whatever other sources you have to get a full list.

4. Narrow your search by ringing each one on the list to see how they respond to your enquiries. If the response is poor at this stage, it ain't going to get any better! (remember to use your low cost 'phone provider to keep the cost down - better still, ring them on their freephone number if they have one)

5. Send your requirement specification to the shortlist of selected suppliers asking them to explain how they propose to meet your needs and at what cost.

6. Examine the response to see who is simply sending a quote or pricelist and who are actually focussed on supporting your business aims. (the cheapest is not necessarily the best - it depends on what you are getting for your money)

7. Select the supplier who will give you the best value for money in terms of helping you achieve your business aims.

8. Contract with them on a short term trial basis (let them know they are on probation!)

9. Review their performance regularly against requirements

10. Keep reviewing the market place for better value & let your suppliers know you are doing so.

Yes, I know it all takes time - but the benefits in cost savings and/or added value can repay the time spent hugely.

Finally in this cost saving section, we'll look at changing the way you work………..

Find Different WaysThere's an old saying …………… "If you always do what you've always done - you will always get what you've always got!"

In other words, if you don't change neither will your results (actually they probably will - they will get worse!…….)

The world changes week by week, month by month, year by year. What was the right way to do things last year is not necessarily the best way this year. The market, the customer, the technology etc. all change almost continuously. Let's take some examples……

How do you give out information? Are you still sending out letters, brochures, product sheets, catalogues etc. They cost a fortune to produce, time to pack and despatch and postage cost to send. What's more, they cannot be easily updated without an expensive reprint. And, let's face it, lots of them are pretty boring and just get "filed".

But what has technology got to offer us? - A vast array of multi-media (i.e. multi-sensory) formats that engage the receiver on several levels and deliver an information experience far superior to printed matter. What's more, most of them cost surprisingly little to produce and can be updated quite easily. Some can even be produced, or at least duplicated, in house with a bit of professional help. Listed below are just a few suggestions:

• Recorded Information Line

• Audio Tape

• CDROM

• Video CD/DVD

• Website

• E-mail Attachment

Low Cost MarketingRecorded Information Line can use a low cost voice mail box with its own phone number to store recorded information - useful for giving the sort of repetitive information that lots of people ring up for. You can then use low cost classified ads or other media to direct people to it for more information. It can also be set up to enable them to leave a name and phone number or address for follow up.

Such a line can take a lot of pressure off expensive sales staff. It can pre-qualify prospects to avoid time wasters and let you concentrate on those who are seriously interested. You can even use it to generate an income, if the information content is of high value, by using a special Revenue Generating Number - see the Resources Section for more details.

Alternatively, the information can be recorded onto Audio Tape or CD and sent to enquirers. It takes a little time and cost to prepare the master, but they can then be easily duplicated in house for much less than the print cost of a brochure and they cost less to send because they are lighter. What's more, they don't get buried in piles of similar brochures, being different they stand out. More often than not the recipient will pop it in the car player on the way home - you now have a captive audience for your message.

For a little bit more in time and cost you can put your information or sales message into a multi-media presentation format using text, graphics, video, audio, animation etc. and then record it on to Video Tape, DVD or CDROM. Again initial cost can be high but duplication and delivery costs are low. But once again, this is likely to be taken home and used by the recipient, probably in an environment with less interruptions and distractions than the office, shop or factory or if used in the consumer market will get more attention than mail shots or leaflets through the door. Alternatively it could be produced as a Computer Presentation or an E-Book and sent out as an e-mail attachment at very low cost.

Best of all, thanks to the rapid take up of internet services by both businesses and consumers, is the Web Site. With a little professional help you can get a superb marketing and information tool that, once set up, can cost very little to run. It's information content is accessible from almost anywhere in the world and it can be changed or updated within hours or even minutes.

Information on any of the above can be obtained from Linctel Ltd on 0800 883 0663.

SummaryNow you know THREE ways to Increase Sales:

• Get more customers

• Increase their frequency of purchase

• Increase the average sale value

THREE ways to Cut Costs:

• Eliminate unnecessary costs

• Get better value from what you continue to buy

• Find different, less costly ways of doing things

FIVE Telecommunication Tools:

• Freephone 0800 sales order line

• Local rate 0845 customer service line

• Low cost telephone call services

• Revenue generating information line

• The Internet - Web Site & e-mail (well it does run over your telephone line!)

They will all help you to make more PROFIT!……

For more information on any of these tools, go to www.linctel.com or call 0800 883 0663

I hope you enjoyed this book and found it useful in boosting your business........

Now go to our resources list for information on products and services described in this e-book.

ResourcesPlease ensure that you are on-line before using this section, as the links are all "live"

Telephone Tools Freephone (0800) - Sales Line www.linctel.com/0800_numbers.phpLocal Rate (0845) - Customer Service www. linctel.com/0845_numbers.phpNational Rate (0844) - Information Line www. linctel.com/0844_numbers.phpLow Cost Telephone Calls www.linctel.com/low_cost_calls.php

Internet Tools Web Design, Hosting & Marketing www.wordpresswebsites.co.uk

Business Tools Business Strategy & Marketing www.beyourownboss.co.uk

Linctel LtdPO Box 0800LincolnLN4 1LZt: 0845 331 3200f: 0845 331 3153e: sales@linctel.comwww.linctel.com www.marketingbynumbers.co.uk