Elements to Increase Your Company Value: Strategically: Part II

This blog is a continuation of the series on How to increase your business value with strategic concepts.

• Strategic –Proactive vs. Reactive Customer Service

What is a reactive customer service program like? Typically it consists of a department that waits for a customer to call then the action is taken to solve an issue or problem.

How much does it cost to obtain a new customer? The most popular answer the author receives from CEOs across the country is “A-Lot”. Large sums of money are spent to secure new customers but if we just have a reactive customer service program then we lose the opportunity to grow the business significantly.

What is the Pareto Principle?

The 80/20 Rule. This rule was developed back in the 1880s by an Italian/French man and it applies today. What are some examples of the 80/20 principle?

· 80% of your revenue comes from 20% of your customers

· 80% of your revenue comes from 20% of your product line

· 80% of your output comes from 20% of your employees

· 80% of your problems come from 20% of your customers

· 80% of your employee problems come from 20% of the employees

How can you use the 80/20 principle to PROACTIVELY increase your revenue by 10% – 200%?

First, you must find out who the top 20% of the customers are. Take your customer sales data for the last two or three years and download this data to an Excel Spreadsheet. Once it is downloaded sort from highest revenue to lowest. (You should also look at the customer by a margin.) Add a column for cumulative percent on the side of the revenue sort. Sum each row until you reach 80% of the total revenue. Now you know the top customers.

If you complete this analysis over several years you can also discover top customer’s revenue and margin trends. It might be a surprise that some customers that were at the top a few ago may not even be on the list. This is an opportunity to visit them and discover why they left and invite them to return. There are a number of ways to invite these customers back to your business, these techniques are often referred to as customer acquisition as the business is acquiring new customers. This is normally done through personalized marketing, making sure it reaches the right people that would probably be interested in your business. That’s one way of bringing people to your business and increasing revenue.

Once the top 20% or 80/20 Customer “Gold Program”®  customers are determined then a methodical program can be designed to build relationships with key people within the organization. What people’s titles would you want to build a relationship with? Chief Executive Officers (CXOs), purchasing agent, accounts payable, project director, sales department, etc. Now strategically have a corresponding department person in your company build a relationship with them. How do you find out what these people like or enjoy? Meet or talk with them to get to know them better. This process will build a proactive vs. reactive customer relationship.

The benefits of this 80/20 Customer “Gold Program”® are significant:

A. Synergistic Buys: Most customers only purchase about 5%-20% of the products or SKUs a company produces. When you build proactive relationships, the customer can be introduced to other products that may benefit them but they currently do not purchase. Thus synergistic buys are possible to grow the business.

B. Hot Leads: Your top customers are aware of other companies that may need your products but they may have never been asked. As you meet with and grow personal relationships, they will be willing to provide people they know that may use your products. Thus another way to grow the business.

C. Increase the Pain of Change – Retention: With reactive customer service, a typical customer will tolerate about a 10% rise in prices or a drop in quality. But with a proactive relationship, this level of pain tolerance goes up to about 40%. Thus you could have a 30% higher price before they would seek another vendor.

A methodic strategic development of proactive customer service can yield large revenue growth from your existing customer base. The 80/20 Customer “Gold Program”®works. Dale has used it many times to increase revenue performance by 110% to 300%.

ABOUT DALE S. RICHARDS:

Dale S. Richards specializes in management, marketing, operation optimization & business valuation consulting and is a 30+ year turnaround expert. He has implemented success concepts into results in 150+ companies. Dale is a Certified Valuation Analyst (CVA) with NACVA, Eight-Year Vistage Chair & International Speaker.

RETURN TO BLOG HOME PAGE 

Methodical strategic development of proactive customer service can yield large revenue growth from your existing customer base. The 80/20 Customer “Gold Program”® works. I have used it many times to increase revenue performance by 110% to 300%.  

What is a reactive customer service program like? Typically it consists of a department that waits for a customer to call, then action is taken to solve an issue or problem.

How much does it cost to obtain a new customer? The most popular answer the author receives from CEOs across the country is “A Lot”. Large sums of money are spent to secure new customers but if we just have a reactive customer service program then we lose the opportunity to grow the business significantly.

What is the Pareto Principle?

The 80/20 Rule. This rule was developed back in the 1880s by an Italian/French man and it applies today. What are some examples of the 80/20 principle?

80% of your revenue comes from 20% of your customers

80% of your revenue comes from 20% of your product line

80% of your output comes from 20% of your employees

80% of your problems come from 20% of your customers

80% of your employee problems come from 20% of the employees

How can you use the 80/20 principle to PROACTIVELY increase your revenue by 10% – 200%?

First, you must find out who the top 20% of the customers are. Take your customer sales data for the last two or three years and download this data to a spreadsheet. Once it is downloaded sort from highest revenue to lowest. (You should also look at the customer by margin.) Add a column for cumulative percent on the side of the revenue sort. Sum each row until you reach 80% of the total revenue. Now you know the top customers.

If you complete this analysis over several years you can also discover top customers’ revenue and margin trends. It might be a surprise that some customers that were in the top a few ago may not even be on the list. This is an opportunity to visit them and discover why they left and invite them to return.

Once the top 20% or 80/20 Customer “Gold Program”® customers are determined then a methodical program can be designed to build relationships with key people within the organization. What company roles or positions would you want to build a relationship with? Chief Executive Officer (CEOs), executive officers, purchasing agent, accounts payable, project director, sales department, etc. Now strategically have a corresponding department person in your company build a relationship with them. How do you find out what these people like or enjoy? Meet or talk with them to get to know them better. This process will build a proactive vs. reactive customer relationship.

The benefits of this 80/20 Customer “Gold Program”® are significant:

Synergistic Buys: Most customers only purchase about 5%-20% of the products or SKUs a company produces. When you build proactive relationships, the customer can be introduced to other products that may benefit them but they currently do not purchase. Thus synergistic buys are possible to grow the business.

Hot Leads: Your top customers are aware of other companies that may need your products but they may have never been asked. As you meet with and grow the personal relationships, they will be willing to provide people they know that may use your products. Thus another way to grow the business.

Increase the Pain of Change – Retention: With reactive customer service, a typical customer will tolerate about a 10% rise in prices or a drop in quality. But with a proactive relationship, this level of pain tolerance goes up to about 40%. Thus you could have a 30% higher price before they would seek another vendor.

Larry Cossio, Owner Cossio Insurance, Greenville, So Carolina Praised Dale Richards Valuation & Optimization Presentation given to his Vistage Group September 2018. Larry liked the valuation principles explanation of how the calculations work, common errors and ways to improve. He also liked the Productivity Pyramid ®, and 80/20 Customer “Gold Program”®, along with the performance dashboard elements that help to make it easier to see what the performance metrics are in your company. Dale Richards’ presentation on Business Valuation Principles – How to Increase Your Business Value, Financially, Operational and Strategically has been given to CEO’s and Executives in 35 states and three countries.

ABOUT DALE S. RICHARDS:

Dale S. Richards specializes in management, marketing, operation optimization & business valuation consulting and is a 30+ year turnaround expert. He has implemented success concepts into results in 150+ companies. Dale is a Certified Valuation Analyst (CVA) with NACVA, Eight-Year Vistage Chair & International Speaker.

RETURN TO BLOG HOME PAGE 

Proactive Means of Growing your Business using the80/20 Customer “Gold Program”®​. How much does it cost to obtain a new customer? The most popular answer author, Dale Richards receives from CEOs across the country is “A Lot”. Large sums of money are spent to secure new customers but if we just have a reactive customer service program then we lose the opportunity to grow the business significantly.

What is the Pareto Principle? The 80/20 Rule.  This rule was developed back in the 1880s by an Italian/French man and it applies today. What are some examples of the 80/20 principle?

·       80% of your revenue comes from 20% of your customers

·       80% of your revenue comes from 20% of your product line

·       80% of your output comes from 20% of your employees

·       80% of your problems come from 20% of your customers

·       80% of your employee problems come from 20% of the employees

How can you use the 80/20 principle to PROACTIVELY increase your revenue by 10% – 200%?

First, you must find out who the top 20% of the customers are. Take your customer sales data for the last two or three years and download this data to a spreadsheet. Once it is downloaded sort from highest revenue to lowest. (You should also look at the customer by margin.) Add a column for cumulative percent on the side of the revenue sort. Sum each row until you reach 80% of the total revenue. Now you know the top customers.

80/20 Customer “Gold Program”® was Seth Dawson’s, Baton Rouge’s, favorite of Dale Richards Valuation Presentation where he learned key business concepts from Dale Richards’ presentation on Business Valuation Principles – How to Increase Your Business Value, Financially, Operational and Strategically.

ABOUT DALE S. RICHARDS:

Dale S. Richards specializes in management, marketing, operation optimization & business valuation consulting and is a 30+ year turnaround expert. He has implemented success concepts into results in 150+ companies. Dale is a Certified Valuation Analyst (CVA) with NACVA, Eight-Year Vistage Chair & International Speaker.

RETURN TO BLOG HOME PAGE 

80/20 Customer “Gold Program”®​ PROACTIVELY increase revenue 10%-200%

The Pareto Principle or the 80/20 rule was developed back in the 1880s by an Italian/French man and it applies today. Use the 80/20 principle PROACTIVELY increase your revenue by 10% – 200%

Examples of the 80/20 principle are:

• 80% of your revenue comes from 20% of your customers
• 80% of your revenue comes from 20% of your product line
• 80% of your output comes from 20% of your employees
• 80% of your problems come from 20% of your customers
• 80% of your employee problems come from 20% of the employees

Knowing that 80% of your revenue comes from 20% of your customers

Ask yourself a question. Who are the top 20% of your customers? It might be a surprise that some customers that were in the top a few ago may not even be on your current list. There is an open opportunity to visit them and discover why they left and invite them to return.

Once the top 20% or 80/20 Customer “Gold Program”®  customers are determined then a methodical program can be designed to build relationships with key people within the organization.

What company roles or positions would you want to build a relationship with? Chief Executive Officer (CEOs), executive officers, purchasing agent, accounts payable, project director, sales department, etc. Now strategically have a corresponding department person in your company build a relationship with them. How do you find out what these people like or enjoy? Meet or talk with them to get to know them better. This process will build a proactive vs. reactive customer relationship.

The benefits of this 80/20 Customer “Gold Program”®  are significant:

Synergistic Buys: Most customers only purchase about 5%-20% of the products or SKUs a company produces. When you build proactive relationships, the customer can be introduced to other products that may benefit them but they currently do not purchase. Thus synergistic buys are possible to grow the business.

Hot Leads: Your top customers are aware of other companies that may need your products but they may have never been asked. As you meet with and grow the personal relationships, they will be willing to provide people they know that may use your products. Thus another way to grow the business.

Increase the Pain of Change – Retention: With reactive customer service, a typical customer will tolerate about a 10% rise in prices or a drop in quality. But with a proactive relationship, this level of pain tolerance goes up to about 40%. Thus you could have a 30% higher price before they would seek another vendor.

Methodical strategic development of proactive customer service can yield large revenue growth from your existing customer base. The 80/20 Customer “Gold Program”® works. The author has used it many times to increase revenue performance by 110% to 300%.  

___

ABOUT DALE S. RICHARDS:

Dale S. Richards specializes in management, marketing, operation optimization & business valuation consulting and is a 30+ year turnaround expert. He has implemented success concepts into results in 150+ companies. Dale is a Certified Valuation Analyst (CVA) with NACVA, Eight-Year Vistage Chair & International Speaker.

RETURN TO BLOG HOME PAGE 

80/20 Customer “Gold Program”® – Business Optimization

The way to differentiate from your competitors is to quantify the top three answers they might provide you. For example, for on-time delivery, a quantification may be “we have a 99% on-time delivery while our competitor’s delivery time is only 90%.” Once the quantification is determined, then these reasons can be used to build your brand for essentially free.

Methodical strategic development of proactive customer service can yield large revenue growth from your existing customer base. The 80/20 Customer “Gold Program”® – Business Optimization works. I have used it many times to increase revenue performance by 110% to 300%.

What is a typical response to close a conversation with a customer? “Thanks for the order and have a good day.” How many conversations, emails, invoices, and contacts with customers do you have in a month as a whole company? Most companies have hundreds or thousands of touchpoints.

With the correct methodology, a company can build its brand significantly at a very low cost.

80/20 Customer “Gold Program”®, Business Optimization were topics Rhonda will implement from Dale Richards Business Optimization and Valuation Presentation. Rhonda is CEO of a telecommunications company in Houston, Texas. Dale was there one week after the hurricane flood but the group took a break and gained valuable business insights from Dale Richards’ presentation on Business Valuation Principles – How to Increase Your Business Value, Financially, Operational and Strategically.

ABOUT DALE S. RICHARDS:

Dale S. Richards specializes in management, marketing, operation optimization & business valuation consulting and is a 30+ year turnaround expert. He has implemented success concepts into results in 150+ companies. Dale is a Certified Valuation Analyst (CVA) with NACVA, Eight-Year Vistage Chair & International Speaker.

RETURN TO BLOG HOME PAGE 

A methodical strategic development of a proactive customer service can yield large revenue growth from your existing customer base. The 80/20 Customer “Gold Program”®​ works.  I have used it many times to increase revenue performance by 110% to 300%.

The way to differentiate from your competitors is to quantify the top three answers they might provide you. For example, for on-time delivery, a quantification maybe “we have a 99% on-time delivery while our competitor’s delivery time is only 90%.” Once the quantification is determined, then these reasons can be used to build your brand for essentially free.

What is a typical response to close a conversation with a customer? “Thanks for the order and have a good day.” How many conversations, email, invoices and contacts with customers do you have in a month as a whole company? Most companies have hundreds or thousands of touch points.

Learn more in my book about Business Valuation Principles. Understand the 80/20 Customer “Gold Program”®, and how it can help you increase your revenue performance. https://successbiznow.com/books/business-valuation-principles-by-dale-richards/

With the correct methodology, a company can build its brand significantly at a very low cost.

_______________________________

Dale Richards, Excel Management Systems, Inc. provides key steps to increase 2X-4X revenue, profits and value according to Dr. Jeff, Dallas, Texas. in Dale’s key Business Valuation Principles – How to Increase Your Business Value, Financially, Operational and Strategically. Listen and learn.

ABOUT DALE S. RICHARDS:

Dale S. Richards specializes in management, marketing, operation optimization & business valuation consulting and is a 30+ year turnaround expert. He has implemented success concepts into results in 150+ companies. Dale is a Certified Valuation Analyst (CVA) with NACVA, Eight-Year Vistage Chair & International Speaker.

RETURN TO BLOG HOME PAGE 

80/20 Customer “Gold Program”® – Strategic Proactive vs. Reactive Customer Service

What is a reactive customer service program like? Typically it consists of a department that waits for a customer to call, then action is taken to solve an issue or problem.

How much does it cost to obtain a new customer? The most popular answer the author receives from CEOs across the country is “A Lot”. Large sums of money are spent to secure new customers but if we just have a reactive customer service program then we lose the opportunity to grow the business significantly.

What is the Pareto Principle?

The 80/20 Rule. This rule was developed back in the 1880s by an Italian/French man and it applies today. What are some examples of the 80/20 principle?

80% of your revenue comes from 20% of your customers

80% of your revenue comes from 20% of your product line

80% of your output comes from 20% of your employees

80% of your problems come from 20% of your customers

80% of your employee problems come from 20% of the employees

How can you use the 80/20 principle to PROACTIVELY increase your revenue by 10% – 200%?

First, you must find out who the top 20% of the customers are. Take your customer sales data for the last two or three years and download this data to a spreadsheet. Once it is downloaded sort from highest revenue to lowest. (You should also look at customer by margin.) Add a column for cumulative percent on the side of the revenue sort. Sum each row until you reach 80% of the total revenue. Now you know the top customers.

If you complete this analysis over several years you can also discover top customers’ revenue and margin trends. It might be a surprise that some customers that were in the top a few ago may not even be on the list. This is an opportunity to visit them and discover why they left and invite them to return.

Once the top 20% or 80/20 Customer “Gold Program”® customers are determined then a methodical program can be designed to build relationships with key people within the organization. What company roles or positions would you want to build a relationship with? Chief Executive Officer (CEOs), executive officers, purchasing agent, accounts payable, project director, sales department, etc. Now strategically have a corresponding department person in your company build a relationship with them. How do you find out what these people like or enjoy? Meet or talk with them to get to know them better. This process will build a proactive vs. reactive customer relationship.

The benefits of this 80/20 Customer “Gold Program”®  are significant:

Synergistic Buys: Most customers only purchase about 5%-20% of the products or SKUs a company produces. When you build proactive relationships, the customer can be introduced to other products that may benefit them but they currently do not purchase. Thus synergistic buys are possible to grow the business.

Hot Leads: Your top customers are aware of other companies that may need your products but they may have never been asked. As you meet with and grow the personal relationships, they will be willing to provide people they know that may use your products. Thus another way to grow the business.

Increase the Pain of Change – Retention: With reactive customer service, a typical customer will tolerate about a 10% rise in prices or a drop in quality. But with a proactive relationship, this level of pain tolerance goes up to about 40%. Thus you could have a 30% higher price before they would seek another vendor.

Methodical strategic development of a proactive customer service can yield large revenue growth from your existing customer base. The 80/20 Customer “Gold Program”® works. The author has used it many times to increase revenue performance by 110% to 300%.  

_________________________________________________________

Rob, Chicago, needed now the valuation principles taught by Dale Richards Valuation Presentation

Rob, RIM Logistica, Chicago, needed now the valuation principles taught by Dale Richards Valuation Presentation. He learned key business concepts that he can use right now on a partner buy-out. Dale Richards’ presentation on Business Valuation Principles – How to Increase Your Business Value, Financially, Operational and Strategically.

ABOUT DALE S. RICHARDS:

Dale S. Richards specializes in management, marketing, operation optimization & business valuation consulting and is a 30+ year turnaround expert. He has implemented success concepts into results in 150+ companies. Dale is a Certified Valuation Analyst (CVA) with NACVA, Eight-Year Vistage Chair & International Speaker.

RETURN TO BLOG HOME PAGE 

   Dale’s Top 10 Courses

80/20 Customer “Gold Program”® – Performance Improvement. How do you expand revenue with existing customers? My customer 80/20 techniques help to raise revenue 2X-4X. How? By proactively finding out what customer’s needs are, instead of waiting for them to call

80/20 Customer “Gold Program”®

80/20: You have a customer base that is an absolute gold mine. If you wait for them to call in, you are losing probably double the revenue that you could have.

Competition Tracking- Proactive

Competitive Tracking: You can’t stay ahead of your competitors if you don’t know what you are doing.

Ways to Increase Value

 TOP SEVEN WAYS:

1. Goals – Coaching – Rewards
2. 80/20 Customer “Gold Program”®
3. A/R, A/P, Cash Flow, Contribution Margin (CM), Metrics
4. Value Proposition –Brand – 3 Reasons “Why do Customers Buy”
5. Systemize – Processes
6. Reoccurring Revenue
7. Competition Tracking – Proactive

https://successbiznow.com/

Revenue Improvement:

1. 80/20 Customer “Gold Program”®, Bill, Edmonton Canada, heard Dale Richards

Revenue Improvement:

1. 80/20 Customer “Gold Program”®, Bill, Edmonton Canada, heard Dale Richards and learned how to implement this program that can 2X to 4X revenue. This and other key business concepts from Dale Richards’ were given during his presentation on Business Valuation Principles – How to Increase Your Business Value, Financially, Operational and Strategically.

ABOUT DALE S. RICHARDS:

Dale S. Richards specializes in management, marketing, operation optimization & business valuation consulting and is a 30+ year turnaround expert. He has implemented success concepts into results in 150+ companies. Dale is a Certified Valuation Analyst (CVA) with NACVA, Eight-Year Vistage Chair & International Speaker.

RETURN TO BLOG HOME PAGE