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If you're running a business, chances are you're looking at ways to grow and scale. But that's always hard unless you can be sure you have steady money coming in. You need consistency.
If you're running a business, chances are you're looking at ways to grow and scale. But that's always hard unless you can be sure you have steady money coming in. You need consistency. You need money you can count on that allows you to take risks in your business and move forward. So here are a few ideas to help you create income predictability in your product-based business.
And if you'd like to find out more about taking risks in your business, check out the video: Helping you step into risk and make business decisions by using the concept of "Yin-Yang".
In business, you get back what you put in. When dealing with your customers, talking about your business, and creating products for your brand, you need to be consistent. Because consistency gives people reassurance. And in the long term, this builds brand value – it's important your customers trust you to deliver on your promise to them. They will buy your product on the basis they know they're getting what you say it is. So remember to always be consistent in your business and to focus on building brand value.
Ideally, you want to be selling products that people need to repeat purchase. A classic example is food - once it's eaten it's gone, and your customers have to buy it again. On the other end of the spectrum, you have products like washing machines, for example. Once a customer has bought one, they probably don't need to buy another one for a number of years, which means your touchpoints with your customers are few and far between. And if that's you, there are strategies you can use to work around that (more in a minute).
But whatever you sell, think about the need for repeat purchases. If you sell something that your customers have a need for again and again, looking after your customers is paramount. Because the happier they are with you, your brand, and your product, the more likely they are to come back to you and buy again.
This is something that's vastly under-explored in many businesses but is worth looking into as a way to generate income predictability in your product-based business. Tenders are bids that the government, councils or district authorities, hospitals, etc. will put out to businesses for specific work. You can sign up to websites and get notified about tenders in your industry and niche and then apply.
Sure, applying for tenders requires a fair amount of work, which is why the process can seem intimidating. You don't have to apply for multimillion-pound projects, but what would winning a tender for £15-20k a year for a number of years do to your business? It could give you the guaranteed income you need to employ more people and deliver better service, so it's definitely something worth considering.
A lot of businesses won't approach retail chains or businesses because profits in selling directly to consumers are higher. But selling through trade (or through channel, as it's known in marketing) is a lot easier than selling to consumers. If you're selling your product to a supermarket chain, for example, they're doing all the hard work of getting the money out of the customer. When you sell 1,000 units of your product in one go, you might make less profit. But you'll also build a relationship with that channel market, and over time your sales become more predictable.
When you think about it, having a contractual relationship with other retailers and dealing with a few hundred contracts is a lot easier than selling thousands of units to individual consumers. Plus, because you're selling to a business, the sale is more straightforward. They're potentially already educated about your product. So selling through channel is a brilliant way to make solid money and generate income predictability in your product-based business.
Similar to selling to trade is selling to a marketplace, like Etsy, Amazon, or Not On The High Street. Or even to a physical market if that's applicable to your business. The benefit of this is that the marketplace does a lot of the work to promote your product. You're not on your own anymore – shouting about your product from the rooftop of your office or your house.
Plus, marketplaces like Amazon have a huge amount of customers showing up and ready to buy products every day. This gives you plenty of room to sell your product. And you also get insight and data that you can then use to improve your sales and your margins.
Going back to the washing machine example from earlier, a customer might only need to buy a washing machine (your core product) every few years. But that doesn't mean they can't come back to you to buy additional products or services that go with your main product, like accessories or parts, for example. So think about products you can sell alongside your main one that are more consumable and that people need more often. So if you sell PCs or laptops, you could also sell mice, monitors, security software, USB ports, etc. You get the idea, right?
The next layer is what I call building consumables. So if you sell inkjet printers, for example, you'll probably have better margins and profits by also selling branded replacement cartridges. These 'consumables' give your customers ongoing engagement with you as a brand and drive sales and profits that help you generate the income predictability in your product-based business that you're after.
Subscriptions have become more popular over the last few years. Think about food and recipes, and the idea here is that your customers commit to monthly spending. When putting together your subscriptions, bundle them well. Make them exciting and interesting - they need to be a no-brainer for the customer. So how can you turn your products into regular subscriptions?
Just like you can 'productise' your services, you can create services to sell alongside your products if you run a product-based business. Think about add-on services that are easy to deliver and don't impact your core production. So if you sell cars, you can add servicing and annual MOT as additional services. This helps you build a relationship with your customers (brand value, remember?) and increase the touchpoints you have with them. It also helps you create some sort of need for repeat activity and purchase, which can enormously help the levels of income predictability in your product-based business.
Make sure your customers know that you are constantly improving your products for them. This helps you strengthen your brand value, build trust, and make your customers feel like you're looking out for them. Make your product the best it can be - it's an important step in encouraging people to psychologically buy into your brand.
User journeys are often referred to as funnels, but I prefer talking in terms of user experience. Think about your touchpoints again - what type of communication do you send out to your customers that triggers the customer journey back into your business? Do you send useful and educational information about your product?
Physical businesses might send letters, discounts, or cards through the post. In digital marketing, you can use email autoresponders. The purpose is to engage with the customer and make them feel welcome and valued. You send out communication and information that is designed to bring your customers back into your business. It's absolutely crucial that you understand how people are engaging with your business. Because once you have that understanding, you should get to a point where investing more money into a specific step of the user journey will help you increase your sales and profits.
The key to having customer journeys is that you can (and should) measure them. Because what gets measured gets understood. Sadly, this is where a lot of micro-businesses fall down – they don't have the capabilities, the software, the experience, the knowledge to measure and track.
So my advice is to set yourself some KPIs (Key Performance Indicators) and start tracking them. You could look at how many customers bought a certain product over a specific period of time, for example. What triggers them to buy? What emails were sent? Break down what's going on in your funnels and measure everything.
A CRM (Customer Relationship Management) tool allows you to keep an eye on your customers, your products, and your sales in a better and more granular way. You can keep track of your conversations with your customers and create what's called tag taxonomy. This allows you to profile your customers, their engagement and activities with you, and track their buying behaviours. Your CRM becomes the central resource of knowledge, information, and data and can give you better visibility into your business. This is called account-based marketing and is a great way to generate consistency and predictability.
If you run a service-based business, check out this video about creating income predictability in your service-based business. And for more tips and inspiration, subscribe to my channel.