Let’s say that your business is a one-shot business. After you advertise to get leads, you convert them to a one-time sale. You do nothing else with them after they buy or even if they didn’t buy and that’s your business model. If you added one more dimension to it, you figured out how to do something else with them for other products and services that are complementary to the need they came to you initially to help them solve or fill. And for the people that do buy, you figure out how to sell them other people’s products or services afterward. You’ve just added two new dimensions, elements, or layers to your business model and that simple shift in thinking could double your profit. Figure out what the lifetime value of your buying relationship with your client is. Can you add one more back-end product, one more upsell, one more cross-sell, to increase your profit?
If you’ve got a product (or service) right now, and you’re selling it one time a year, and all of a sudden you figure out how to make it three, you’ve just increased your profit potential. If people regularly buy three times a year and you can figure a way to get them to buy five times, you’ve amazingly not only improved the profit per year but the value of that business if you want to sell it. The business model is something you analyze. Once you look at it and articulate it, then ask yourself how many different ways can I make it better on both the front end and the back end sides.
What can your new business model be expanded to look like?
1.) How can you make it safer on the acquisition side?
2.) How can you make it better on the residual income or institutionalizing the relationship that we have with the client side?
Each of these metrics can double your profit. When you’ve got those kinds of metrics available, you should master them and understand them completely. Examine, evaluate, and comparatively analyzing whether or not you’re even close to having the highest and best-performing approach in each of these high upside leverage driver categories. The business model you follow can make all the difference in your profitability, and there’s enormous leverage here because you can change one element and it could change everything.