Synopsis
Your ability to make money from your sales is ultimately driven by how well you know what matters most to your target customers to trigger their decision to buy from you. The when, where, and why they decide to buy forms the foundation for your business profit model.
You will never earn the money you should until you know who is most likely to benefit from the products or services you offer: your customer. Your target customer reflects who you are building your company for, the very reason for its existence. Without your customers buying from you at a profit, you will never make money.
If you can’t articulate the decision criteria your customers go through in choosing to purchase from you and not your competitor, you don’t know your customer. The core of knowing your customer lies in knowing their purchasing decision criteria. Yes, knowing their demographics and what they look like matters. Yet, these don’t help you efficiently organize your resources to deliver the best products and services to your customers at a profit.
Any purchase made from any business comes down to an exchange of value that serves a need or satisfies a want. The purchase decision of a customer is a big deal. When they decide to buy from you, they agree to transfer their money to you in exchange for ownership of your product or to secure your service delivery. It is their purchase from you that represents cash inflow that you have the potential to earn a profit on, as shown below:
If potential customers decide to pass on buying from you, then there is no exchange of value. There is also no value exchange if you don’t earn a profit on their purchase.
The most considerable risk in business is grounded in the fact that every business sends money out, trying to get consumers to buy from them with no money coming back in unless they choose to buy. Couple that with profits only coming after the delivery of a customer’s purchase is completed at a cost less than what they pay you is the only way profits are earned.
Fail to generate sales because people decide not to buy from you, and you will go out of business. Failure to have cash inflows greater than cash outflows from sales made will also cause you to go out of business. The ultimate question comes down to what you can do better, smarter, or more to generate higher sales at above-average profits?
Your ability to make money is ultimately driven by knowing what matters to your target customers in their decision to buy from you. This is the foundation for your business profitability model.
Losses, not profits, mount when there is no exchange of value. If you are not clear on why people are buying from you, you are operating your business with blinders on, hoping you will generate enough sales to make a profit. Knowing who benefits most from what you do with clarity and precision is the best way to make more money.
Want help seeing what your customers value?
Click here if you want to talk with a certified BusinessCPR™ Business Scientist at no charge to identify where to start in confirming what your customers value. Within twenty-four hours of receipt of your sales by customer summary, you will receive back by email your free setup for how to confirm what your customers value in your business.
Would you like to know what your customers value?
Click the link below if you are struggling with knowing what the exchange of value you offer your customer is by talking with a certified BusinessCPR™ Business Scientist at no charge to identify where to start. Within twenty-four hours of receipt of your sales by customer summary, you will receive back by email your free setup for how to confirm what your customers value in your business.
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