The Tribune

By D’Arcy Rahming

Jay Abrams is a world-famous marketing consultant that executives of Fortune 500 companies pay a lot to for advice. He works with major firms to tell them what their legion of MBAs probably have been telling them all along. But because they have paid him a lot it helps them to listen better. On the surface, his advice appears very simple, yet it is profound. He has a couple of messages that really resonate with me. One is that there are really only three ways for a company to increase revenues through selling.

The first is a price increase. A lot of people are very hesitant to do this, citing competition as a major barrier. My own thoughts on this will be expanded in further columns, but proof that price increases boost revenues is all around us. Why is it that people pay up to three times the price for a mixed drink at the Ocean Club compared to what they pay at a local bar? Or, if you think that is extreme, how can convenience stores charge so much more for a can of soda than a supermarket?

The second way is to increase the amount of customers. This is the area we like to spend the most time on. The need to get more customers is not something that is hard to convince businesses to do. Yet in a down economy or in increasingly competitive environment, it is often very challenging.

The third way to get more revenue is by increasing the amount of purchases by new customers and old customers. This is represented in the classic: “Do you want fries with that?” line used by most fast food companies. Add ons, new products, are all ways of driving costs. My best example is getting a new phone. After the phone you have to buy a case so that you do not drop the phone. And, of course, you need a clip to hang the phone on your belt. The phone company itself adds on a bunch of extra services.

And that’s it. If you increase each of these areas by 10 per cent, for every dollar you are currently earning you would be making 33 per cent more. So for this coming season, let’s all try to do that in our businesses. At least increase in two of these areas. But a warning. You have to keep your costs constant to realise these revenue gains as profit. I am a small businessman, so I constantly have to keep these things in mind. Drop me a line if you want to discuss these strategies further.

• NB: D’Arcy Rahming holds an MBA from the Kellogg School of Management at Northwestern University. A lecturer at the College of the Bahamas, Mr Rahming has clients in general insurance, retail, the health and medical fields, sports federations and financial services. He is also treasurer of the Bahamas Olympic Committee. To receive his marketing newsletter FREE go to http://darcyrahming.com