A Billionaire's Lesson

by Ryan McMullen

I’ve always been a big fan of the TV show ‘Shark Tank’ in which everyday small business owners pitch their idea to superstar entrepreneurs like Mark Cuban in hopes of partnering with them.  As I was watching, I kept seeing commercials for a show called ‘The Profit’, but never gave it a second thought because I didn’t like the religious pun (No, I’m not overly religious, but apparently overly quirky).

In any event, I was feeling a bit under the weather one evening, watching more TV than a human should be allowed to consume, and I decided to give it a shot.  The star, Marcus Lemonus, is a self-made billionaire who invests his money into failing businesses and turns them around.  

What I found most interesting was that the common thread throughout each episode was that in order to turn around most businesses, one of the most effective strategies was to add more revenue streams.  This is no earth-shattering business idea, but it got me thinking about the small business owners to whom I speak and how the successful ones are ALWAYS looking for additional ways to make money and maximize their customer value.  

We all know that we should be upselling and cross-selling, but how many actually do it?  From my experience, very few do it.  

Let me ask you a question: What is the one most valuable asset any company can have?  BUYERS!   

That’s it.  If you have buyers, you’re in business.  If you don’t have buyers, you’re out of business.  We spend a disproportionate amount of our time trying to attract new buyers and totally ignore the ones we already have.

Once you’ve got a buyer, the hard work is done.  They know you, like you and trust you, so why on earth are we not selling them more of our products and services.  Did you know a person is 21 times more likely to buy from a business whom they’ve already bought from versus somebody they don’t know?

This principal holds true for every business, but I find it especially fascinating for home improvement businesses.  You have a buyer who has trusted you enough to invite you into their home, their most intimate place on earth.  You’re in!  Look around, what else needs fixing in a home?  My cousin has one of the nicest houses I’ve ever stepped foot in and I could point out ten things that need to be fixed.

I did some work with a plumber years back and his company was awesome at upselling and cross-selling.  He would go out on a call for a leak in the basement and walk away having sold that job, a kitchen faucet and maintenance contract.  Not only that, but he had partnerships with every other kind of home improvement service out there to get referral fees and referrals for his business.  Do you think his company was doing well?  You bet it was.

So why don’t we all do it?  I could go into a whole argument about the typical entrepreneurial mind and how we quickly lose interest and only like the hunt and kill, but those are just excuses for failure.  Take the advice of a billionaire, work smarter, and ask yourself, “What else can I offer my paying customers?”  You’ll be glad you did.     

Ryan McMullen (ryan@stlouismarketinglab.com) is the owner of St. Louis Marketing Lab.