3 Ways to Increase Profit Using Existing Resources.

NB. As always, we write with the home improvement business owner in mind.

It’s a continual battle in business to generate new enquiries and keep the money coming in. It’s particularly difficult in home improvement businesses because the nature of it means there is little short-term repeat business. It can feel like a continual battle to keep the sales pipe line up. This often means a ‘feast and famine’ existence as weeks of business are followed by slow weeks because there was no time for marketing during the busy period.

Consistent marketing could ensure a steadier flow of leads but in the meantime, could you do more to increase profit from the enquiries and resources that you do have. Read more about small business marketing in 2022.

You can use our calculator to work out what difference small changes could make. You will need to know your numbers before you start. How many quotes per week, your average order value and average profit.

Every single ‘sniff’ must be treated as precious. I had a netball teacher at school. She accepted no excuses. Every time we missed a catch, she would shout down the court at us, ‘if you can touch the ball, you can catch it’. After the match, we would receive the same lecture. If we touched the ball and didn’t catch it, it was because of something we didn’t do. We didn’t stretch enough, wasn’t fast enough, didn’t turn quick enough.

Enquiries are the same. If someone is looking for your type of product and you had your ‘hand on the ball and didn’t catch it’, it was because of something that you didn’t do.

It’s worth evaluating. Come up with a consistent process for dealing with every enquiry so that everyone involved knows exactly what is expected of them to make sure that enquiry moves forward.

Keep in touch with your customers. It hardly seems worth keeping in touch with customers when you just gave them a guarantee for ten years. In some ways, you don’t want to hear from them in case it’s not pleasant. Get over that. Yes, you do want to know if they’re not happy because if they don’t tell you, they will tell someone else. More importantly, customers buy other things, they move house and they refer friends and family to you.

It doesn’t take much effort to set up an email system and send something to your customers every six months. If you had done it five years ago, you would have a regular flow of leads generated from past work.

2. Increase the average order value.

The obvious way to increase the average order value is to increase prices but I know everyone is reluctant to do that post COVID. Assuming your prices are at the right level, how else can you increase average order value?

Sell them more. It is common in home improvements to be frightened of adding features in case it increases the price and alienates the customer. I completely understand that. Cost comparisons are rarely done fairly and customers sometimes don’t understand that your higher price represents better value than a lower competitor price. The way to avoid this is to upsell after the order is agreed. There is nothing underhand about this. You will be doing your customer a favour. They definitely do not like it when they show off their new product to a neighbour and the neighbour asks why they didn’t have something that they didn’t know about.

Sign the order, then when you send them the confirmation, also send them a list of options with a note of concern.

Dear Graham and Sue,

Thank you very much for your order. It’s been a pleasure working on this with you.

Before we go to production, I want to make sure that you are 100% happy. Please review the attached order along with the list of available extra-cost options to make sure I haven’t missed anything.

etc, etc.

You could also do this at the survey if there is one.

I’ve worked with companies who paid surveyors commission on upsells. They made a small fortune out of salespeople who sold on price and didn’t talk to customers about other features in case they priced themselves ut of a job.

Discount less. When you are negotiating, the customer is not necessarily looking for a price. They are looking for value, which doesn’t have to be monetary. Find alternative ways to give them extra value. Give them something free to the same value. That way, you only give them the cost of the item rather than the full amount of discount. Offer an additional service. If it is something that would benefit from a check-up in a year, offer that. If you sell conservatory roofs, you could offer a full clean. When I used to sell conservatory blinds, I offered a one year check to make sure wires hadn’t sagged. Nobody else did that and it kept us in touch with the customer, who often asked us to measure for blinds in another room.

3. Improve Your Conversion Rate.

Yes, it is obvious. Convert those quotes into sales more often. 70% of people who make enquiries are ready to buy from someone. As long as they are in the right place and your product is suitable, you have a chance to sell it. The sales function is the Centrifugal Force in your business. Everything stems from it. If it is out of whack, so is everything else. That function has to be protected. Your business needs to be organised so that you or your salespeople are able to perform that function well. You cannot rush customers because you are busy and want to get back to the office. You must give them full and undivided attention. You must know your product and be willing to treat them as if they are the most important thing in your universe for the time that you are with them. If sales skills are lacking, learn them.

An additional benefit.

Success breeds success. When you’re doing well, you carry yourself better and project different energy that customers pick up on. Selling is a great habit to get into. Increase your conversion rate and everything else will follow. Your average order value will increase because you will pick up better quality orders that may not have been available to you before. You will receive more enquiries because you will have more referrals. If you increase profit in all three areas at the rates, we have used, 1 more appointment per week, £300 additional average order value and 10% increase in conversion rate, that £172,800 will become £209,088 without spending any more money.