Want to make a difference to $ turnover?

In my BizFizz Workshops, we talk about four ways to grow your business –

  1. Increase the number of clients of the type you want
  2. Increase the number to times they buy from you (transactional frequency)
  3. Increase the average dollar sale value
  4. Build systems in your business to ensure these things happen consistently.

I didn’t make these up – I am sure I learned them elsewhere, but this doesn’t make them less true.

In physiotherapy, or any other service based, personal contact business, there are two ways of increasing customer numbers

  • reduce the number of clients leaving your business
  • increase new clients coming to your business

Let’s say you have a client base of 2000, with an average spend per visit of  $80 and making a spend on average 5 times per year.  This gives you a turnover of $800,000.  What happens if 10% leave per year? If 200 don’t make their $400 worth of purchases?  Obviously you reduce turnover by $80,000.  What happens if you gain 10% new clients?  Remember, you are now only gaining 10% of 1800 clients meaning your base is now 1980 clients.  So your turnover decreases by $8,000. 

If you can reduce the loss to only 5% while gaining 10% new clients the turnover comes out at $836,000.

You can juggle the figures all you like, but here is the take home message.  Increasing  or retaining customers produces modest gains in income.  Modest? Compared with what?

  • What about increasing their transactional frequency by 10%? Up from 5 times per year to 5.5 (on average).  This increases turnover to $880,000.
  • What about increasing the average dollar sale value by %10? Up from $80, to $88.  Turnover ups to $880,000. 

Doing both together (value and frequency) amounts to $968,000 turnover! This represents a 21% increase!

Considering the financial cost of attracting new clients (advertising), it makes more sense to simply keep the ones you have and WOW them sufficiently to make more frequent and slightly more expensive purchases from you. We will talk more about strategies for all these options in later blogs.  If you can’t wait, register for my next BizFizz workshop – go to www.redsok.com for a list of upcoming events.

Work Life Balance…..

I love motorcycle touring.  Today I met up with a bunch of like-minded mates and we took off for 300km around the hinterland of South Eastern Queensland, Australia. Stopping for ‘smoko’ and lunch gives us a chance to tell a few lies and laugh at a few stories.  Later this month I am combining motorcycling and work when I conduct my first workshop tour ‘on the road’.

Travelling south as far as Canberra, I will be delivering twelve “BizFizz’ workshops for private physiotherapists in rural New South Wales.  Four or five hours riding each day through some of the best motorcycling road in Oz, then after a walk, some exercises and a feed – four hours on the business of physiotherapy.  

Combining your passion with your work transforms the way you feel about your ‘job”.  Sometimes the links are obvious, sometimes it takes a little more innovative thinking.  See how you go.

The Red Sock System of Time Management

My wife, Mary,  says I have a ‘red sock obsessive-compulsive disorder’.  Something to do with my drawer full of red socks.  Have you any idea how much time you can save every day by not having to choose what colour socks to wear?  I reckon I must have saved (say) 60 sec per day for 20 years  PLUS the reduced sorting of socks in  the wash and pairing them afterwards!  This could add up to around 180 extra hours to pursue more important activities.   This is more than an extra week in my life. 

When looking to ‘manage time’ identifying trivial time wasters can turn small daily gains into leveraged cumulative results.