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Module 1: Embed finance across the company5 Lessons
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Module 2: Identify profit and cash initiatives7 Lessons
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Module 3: Oversee and drive business change13 Lessons
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Module 4: Deliver data-driven strategic insights6 Lessons
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Module 5: Challenge your Board and influence strategy9 Lessons
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Module 6: Drive key decision-making11 Lessons
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Module 7: Represent your business externally6 Lessons
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Module 8: Become a critical and influential voice5 Lessons
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Module 9: Deliver the business plan7 Lessons
Profit improvement methodologies
Dan Wells October 11, 2023
optimize your profits, you need to be sure that you are generating maximum profits from each product, within impacting on your company’s overall performance or reputation.
During this lesson, we present a business framework that finance leaders can implement to help double your profits:
Research suggests that one of the best ways to quickly double your profits is to focus on incremental gains of around 10% each. Customers buy products and services that are generated from processes and activities which consume resources.
By breaking down these processes into individual components, you can scrutinize each component separately.
Here are the seven levers of business and some examples of how to generate a 10% incremental gain for each:
Suspects
This is anyone who visits your website or walks into your store. You can increase the number of suspects by improving your marketing and advertising efforts. You can also improve your customer service to encourage customers to buy more products from you.
Prospects
These are the people who take action beyond just looking. You can increase the number of prospects by improving your lead capture process. You can also improve your conversion rate by making it easier for customers to buy products from you.
Conversions
The percentage of people who buy something from your company. You can increase the number of conversions by improving your website design. You can also improve the buying experience for customers.
Average item price
The average price of any items you sell across a given period. You can increase the average item price by increasing the prices of your products or services. You can also offer premium versions of your products or services.
Average items per sale
The average number of items purchased in the transactions across a given period. You can increase the average items per sale by adding more products to your catalogue. You can also improve the cross-selling and up-selling process.
Transactions per customer
The number of times, on average, your customers make repeat purchases across a period. You can increase the number of transactions by improving your checkout process. You can also improve the post-purchase experience for customers.
Margins
Your overall profit margin of all sales as a percentage. You can increase margins by reducing costs. You can also improve the efficiency of your operations.
Summary
By focusing on incremental gains of around ten percent each, you can quickly double your profits. Start by analyzing the seven levers of business and look for ways to generate a ten percent gain in each area. By making small improvements in each area, finance leaders can dramatically boost your bottom-line results.
