June 6, 2024 • 29 mins
Welcome to the Profit Cash Growth Podcast, your go-to resource for six and seven-figure business owners looking to grow financially successful businesses. This week, we dive into some intriguing facts: Did you know James Dyson owns more UK land than the King? Discover how this fascinating tidbit ties into the latest rich list and what it means for business strategy.
Join host Claire Hancott, a finance director, chartered accountant, and entrepreneur, and her co-host Simon as they explore actionable guidance and frameworks designed to help you increase your profits, improve cash flow, and grow your business. From early renewal discounts to bundling value-add services, learn innovative ways to make your customers more sticky with these high retention strategies and without using honey or glue!
Also, don't miss this week's Profit Cash Growth Extra, where Simon shares his experience with Udemy, a self-learning platform offering a plethora of courses to enhance your business skills. Tune in for insightful discussions, practical tips, and much more!
VALUABLE RESOURCES
ABOUT THE HOST:
Claire Hancott through Profit Cash Growth helps 6 & 7 figure business owners to increase their profit, improve their cashflow and grow their business using their numbers.
As a finance director & chartered management accountant, Claire has nearly 20 years’ experience in finance and running businesses of her own. This gives her a unique insight into the information and support business owners need to grow a financially successful business.
Claire passionately believes that every business should be run by the numbers because the numbers in your business are telling you a story about what is and isn’t working and where your opportunities lie. Claire’s mission is to provide insightful management accounts, reports and advice to business owners and support them to make smarter decisions.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
This week, did you know James Dyson owns more of UK land than the King?
And we ask how you can make your customers more sticky without the use of honey or glue.
Welcome to the Profit Cash Growth Podcast. This is the podcast for six and seven
figure business owners who are looking to grow a financially successful business.
My co-host Claire Hancock is a finance director, chartered accountant and entrepreneur.
(00:22):
And every week I'll be exploring guidance and frameworks designed to help you
increase your profits, improve your cash flow and grow your business.
Right, Claire, now you've had a good sneeze. How are you? Sorry about that.
We're just about to record and Claire's like, I'm going to sneeze.
Hopefully Simon would have edited that out though. And therefore this conversation
and this bit of shit chat is completely pointless.
(00:44):
Yeah, we didn't launch the podcast with a great big sneeze, but there we go.
What have you been up to this week? I have been eagerly anticipating the start of the Euros.
True. When will this go out? It will be one week and one day till kickoff in Munich begins.
So yeah I'm very excited about that I love it love
a good football tournament you don't really love a good football tournament do
(01:05):
you I like the Euros and the World Cup because it's just it's always in summer and everyone
just it's the drink and the sun and everything it's great love all that I love
the atmosphere around it and everything I'm not a big football fan but I do
like to when it's England I do like it it's great yeah I think definitely though
I have got the sports bug in this relationship as we said the other day I am
either playing sports watching sports or recovering not at the moment.
(01:27):
Because I've got a I'm outgyming you at the moment, that is for sure.
Why is that, Claire? I've got a potentially fractured ankle after a little netball injury.
So, yeah, I'm feeling a bit sorry for myself, hobbling around with an incredibly
bruised and swollen ankle right now.
Well, your friend's given you a free HelloFresh box with limited amounts of
protein to help build that bone and muscle back up anyway, hasn't it?
(01:47):
Yeah, unfortunately. Because it's vegan and vegetarian. Vegan and vegetarian,
but we can add some protein into that to aid my recovery. I love the way that
you've taken the vegan and vegetarian HelloFresh box and every recipe you look
at, you're like, Like, yeah, we'll just add a load of meat to that.
Yes, we'll just add a load of meat and cheese to that. Yeah,
we'll just add a load of meat and cheese to that.
So the answer to making everything in your view better is just fill it with
meat. Meat it up, yeah. No, I'm recovering.
(02:08):
I've got to fix my injury and I've got to go back into the gym.
You are, in fairness. It's been quicker. It's three or four days and you are
moving in the right direction. Exactly.
Your foot's now only half the size of it was four days ago. Yeah.
Anyway, let's move on to this week's news story of the week.
Bye.
So, Claire, this week, did you know that James Dyson, this ties into the rich
(02:32):
list that just came out recently anyway, which James Dyson is also always in the top five, isn't he?
He's slipping a little bit, I must say. But did you know he owns more UK land than the Queen?
Well, I said the Queen. It's not the Queen anymore. It'd be the King,
wouldn't it? Why was the headline the Queen? This must have been an old article.
Yeah, 33,000 acres of farmland.
In fact, it's quite ironic that you made that little slip there and referred
(02:55):
to it as the Queen because when I was watching the FA Cup final,
the poor woman that was singing the national anthem also said, God save the Queen.
So it's obviously not something for everybody yet that we now have a king and
not a queen. I call this a new story. It's more of an old story.
This isn't a new thing. I just didn't know this.
I heard somebody else talking about it and I was just like, this is really interesting.
(03:18):
Let's unpack this and see what this is all about.
It is really interesting because I think most people's initial reaction when they read this,
they'll just assume that James Dyson comes from a family of
landowners and he did come from a not amazing
wealth but you know he was brought up in a nice country
house in Norfolk and he does come from a bit of money
because him and many of the generations before him all went to private school
(03:40):
so I think we're not claiming that it's a rags to riches story nonetheless the
reason that he owns so much land is because Because Dyson is not actually just
a vacuum cleaning company anymore, is it?
In fact, Dyson Farming is the largest farming business in the UK.
And I just thought that was staggering.
Absolutely staggering. It's wild. He's got houses all over the place.
(04:02):
Doddington Park, house in Chelsea, house in Norfolk.
And these all have land around them and various other things.
So, yeah, I mean, obviously, let's not beat around the bush.
This is vastly to do with inheritance tax, isn't it? No.
You don't think? No, it's because he's the largest farming business in the UK.
But do you not think he's become the largest farmer because it's the best form
of passing on wealth you can possibly do? Farmland's inheritance tax-free. No.
(04:26):
It's what very wealthy people do. They buy up agricultural land and for years
and years and years they pass it on because it's inheritance tax-free.
That's the big, I think that's the big reason. And they're not going to say
that in the article specifically, but it's going to be a massive part of it.
Well, Mr. Cynical Simon.
It's not cynical. If you go to any wealth planner, they will,
if you're wealthy enough, the most advanced sort of tax avoidance strategies are farmland.
(04:51):
Look, I would say that... I know this because I'm planning for myself.
I may be vastly misjudging James Dyson, but he is such a philanthropist.
I do not get the impression that he is buying so much of the UK purely for tax
reasons. You know, we look at how he reacted in COVID when he deployed so many
of his businesses resource at a cost to him to work on building.
(05:13):
Breathing equipment yeah yeah ventilators ventilators and
things like that in the covid crisis he gives literally millions
and millions of pounds every year to charity and he is
very very well known for um a lot of
the work that he does so i'm not knocking it but i don't believe that the
reason he's buying land is for tax reasons not primarily
a good business person always has two angles to
(05:34):
what they're doing don't they they go yeah that's great i want to do that but also obviously
this fits really nicely because it's inheritance tax free when
i pass it on to my family but he is building a huge farming
business he's talked quite a lot about the instability and
the food security crisis that the uk could potentially face because we
import so much of our food nobody wants to if you're a good business person
your priority is to build to build a farming business because farming is not
(05:58):
particularly lucrative it's terribly difficult to make a profit and it's steeped
in regular it's a horrible industry to go in so hence i double back to my My
primary may be inheritance tax and owning land.
I mean, wealthy people own land because land goes up in value and,
you know, land can be rentable and can generate an income.
It's just the thing that very wealthy people do.
(06:20):
And I think, yeah, you can look at it whichever way you like.
But primarily, I think that's the benefit of why he's doing it.
But I'm pleased that he's, you know, he's doing good things with the land that
he does own. He's not just sitting on it. He's actually farming it, yeah?
Yeah. Yeah, I mean, the biggest farming business in the UK, I don't even think
we can begin to comprehend how much food most of us must eat on a daily basis
(06:44):
that comes from James Dyson's farm.
So yeah, I think it is a business, it is humongous, and it's going to be needed more and more.
So it's a growing market. So actually, from a business perspective,
I think it is probably a really great industry to be in.
Historically, UK, if you look at our food prices around the world,
they've been rock bottom compared to other countries. And therefore,
we are going to start paying more for our food, but it will be better quality
(07:07):
and we will start growing more in the UK and relying less on imports.
And so, therefore, I just think this is going to be an industry that actually
really tough at the moment, but long term, I think it's going to be very lucrative.
Yeah. And I think he'll be fine as long as we keep buying his new £600 electric
mop that he's just launched. What do you reckon about that? Yeah, that is true.
It's wild, yeah. The prices of the Dyson products are barmy. A mop?
(07:30):
I mean, do we need an electric mop? I don't know. No, but we didn't need a £600
vacuum cleaner either and the £400 hairdryer. No, but they were better.
They are loads better than what's come before.
You know, that hairdryer, I mean, God, I sound like a hairdryer connoisseur,
but I do use your hairdryer. It is good, isn't it?
It's way better than a hair dryer I would say but it still functionally does well
(07:52):
it does I never take that hair dryer with me anywhere I bought that
hair dryer feels like it's going to last forever though like forever I
agree it seems very good quality so to buy a
50 quid one and swap it every 5 years that
feels like it's going to last your lifetime I reckon you'll still be drying your hair
with that when you're 90 yeah but I the hair dryer before
that I probably had for 15 years as well and it probably cost me about
£10 from Argos so from that perspective you're not arguing why you
(08:14):
bought that no well I bought it because I get very static
hair and it claimed to stop the staticness so
i spent 400 pound on this bloody hair dryer and i've
still got static hair and good marketing yeah every
time i go away for you know stay in a hotel stay
at a friend's house i would never ever dream of taking my hair dryer with me
i just use whatever hair dryer is available and i can't notice any difference
(08:35):
whatsoever so it's the same reason people buy teslas isn't it the whole dyson
thing like it is you know i guess like the mentality of it it's just like it
seems we don't need it somehow they're a very luxury good quality product up
and they make some really good marketing claims.
I'm not saying their marketing claims are wrong, but can it cure my wildly static hair? No, it can't.
(08:56):
Well, let's move on to this week's deep dive, which is how to make your customers more sticky.
So, you don't mean physically sticky, no.
Ah, what a shame. You do like bees. We talked about World Bee Day the other week.
Yes, I really wanted us to go on a bee day. No, don't go down there.
(09:18):
Move on, move on, move on, move on, move on.
We're not talking about that. So, how do you make your customers more sticky?
What you mean is, how do you increase retention of your customers?
That's what you're talking about, isn't it? And this is because you've just
done a big, smart move with one of your clients, and then we're going to expand
on other things that can be done as well, isn't it? Yeah, absolutely.
So I have been working with a client for a number of years now and they are
(09:39):
looking, exiting their business because they're nearing retirement age.
So whether that's exiting the business with a management team in place and they
retain ownership or whether they sell the business.
But one of the key things that we needed to do was achieve certainty.
And when I say certainty, I mean certainty of like a minimum amount of sales every month.
Because this business is it basically does logistics
(10:02):
of cars so they don't have any contracts
at the moment and the reason is because they are they
specialize mostly in like event work and film work and things like that so they're
this type of business that starts from zero every month they've got customers
that are repeat spending with them but every job is quoted as an individual
job and there's never a guarantee of what work and so we saw this as a significant
(10:23):
risk not only for the business at the moment,
but also looking from like a buyer's perspective of a buyer coming into the
business, they would look at this and say, well,
what if we don't get sales next month? Who is the person responsible for getting those sales?
And what if something happens to them? So we were looking at this from a risk perspective.
And the obvious thing was to say, okay, well, we need to get some contracts,
(10:44):
but it was impossible to get contracts because without knowing the details of
the job, we couldn't quote. So we couldn't put any price in the contract.
And the customers didn't know how many jobs they were going to be able to give us.
So they couldn't guarantee any quantities or anything like that.
So it was kind of business.
And I'm sure lots of small businesses are like this where a contract just doesn't
work. You can't sign your customers into anything.
(11:06):
They often work purely on gentleman's agreements and various other things.
I know this client doesn't have any contracts, or didn't until this point,
and this is what this process is all about.
The challenges with that is it makes the business wholly unsaleable.
Not wholly, but it's a bigger risk factor.
The contract and the fact that the owner is integral, is key man driven with the owner.
(11:29):
Those two things make your business unsaleable. You have to deal with both of them.
They're the two key things. Because, you know, the person needs to buy a business
knowing that all the customers can walk out tomorrow because you just wouldn't do that. That's major.
And the same when the business owner walks out, that it keeps running.
So you've got a management team that works without you in it.
And, you know, they're kind of the big ones, isn't it? Yeah.
(11:49):
So we dealt with that by having conversations.
We've actually secured three customers now that are worth like multi six figure
contracts a year. So this is the size that we're talking about.
But what we did is we started by approaching one of the biggest customers.
And we said, look, we know that you're working with us predominantly.
They gave probably about 50 to 60 percent of their contracts to this particular business.
(12:11):
And we said, look, we know we get most of your work, but we know that you're
using our competitors, too.
And what we want to do is improve our service and our relationship so that the
only company that you use is us. And that was the conversation that we had.
And we ended up coming to an agreement where we said, you know,
could we put pricing into a contract or something like that?
(12:34):
And we had all these barriers, the reasons why we couldn't put pricing into the contract.
And we ended up coming to what I would say was a little bit like a gentleman's
agreement, where we agreed that the intention of customer A was to give all
the business to the supplier.
And the intention of the supplier was to be able to deliver on 100% of their needs.
(12:55):
We used to call this in the corporate world when
you couldn't do an exclusivity agreement you call it a preferred supplier agreement
yeah exactly a preferred supplier agreement or an intention first right
first refusal that type of that type of contractual agreement that you would
go to them first give them the opportunity to quote or various things doesn't
mean that they'll give them the business because if the price isn't right various
other things but first first right refusal type of thing yeah interesting and
(13:19):
what's that done for the business oh it's been incredible so So overnight,
they have got all of the work that was going to the competitor.
So they've gone, I think this customer in particular was worth currently about 100k to them.
And now they've done about 150k already just for this one customer.
And that's just one customer.
And we're now rolling out the same sort of structure.
(13:40):
So it's having that conversation with the customer initially about the service
that you can offer and what their needs are.
That's really important that we start it that way. then having a conversation about
you know preferred supply or an intention contract whatever it
is that you want to call it and then get that contract signed and
it's also one of the benefits of
this is it's given the business a structure to how they manage their
(14:01):
sales team so from my perspective I came at this from a
risk and a finance perspective I said this is a financial instability to
your business because you don't have any guaranteed sales
or guaranteed customers that you know
will will not go elsewhere yeah but the benefits of
this is that it's helped them with their sales process as well because they
didn't they didn't really have any way of regularly meeting with their customers
(14:23):
and reviewing service and talking about opportunities and you know being that
first foot in the door when there's new projects and things like that and so
now every quarter they have a catch-up with this customer and they talk about
how the contract is working for both of them,
what the pricing's like for both of them and also that's an opportunity to talk
about any potential work that's coming up to make sure that not only are they
(14:45):
prepared and they can deliver on the work but also that you know they get that
first foot in the door and if there's something they can do to help the customer
get it over the line then they can do all of that so it's had a.
Much greater benefit over and above just secure giving them a little bit more financial security,
amazing amazing yeah good one preferred supply agreements
really really like it that got us thinking didn't it about what else businesses
(15:07):
can and should be doing to make their customers more sticky i'm just going to
whiz through a few here i won't go into too much detail on this one because
you can actually whiz back and find an entire podcast about business rebates
or contractual rebates but just give us a complete outline quick outline on
what a rebate agreement would be and how that could make a customer more sticky?
Yeah, so a rebate would be that you would say to a customer,
if you spend £100,000 with me in 12 months, I'll give you 1% back at the end of that 12 months.
(15:32):
So it's that type of agreement where it's over a period of time and they get
a kickback at the end of it if they hit certain targets.
And that can be quite powerful if your customer is trying to push you on pricing.
You don't want to, if a customer say to you, oh, I'm going to do loads of business
with you if you give me a cheaper price, you're like, well, well,
I can't give you a cheaper price now, but if you do hit those targets,
you'll get the kickback at the end.
(15:53):
Yeah, so it could be a really great tool for managing those pricing conversations.
I've been in loads of businesses that have used rebates and in a big way,
talking to British Airways in the last podcast, you know, we had a big rebate
agreement with British Airways.
So really good way of getting people to actually ratchet up and spend more and
increase their average customer spend.
And also just a really quick tip, use this with your suppliers too.
(16:13):
Ask your suppliers for rebates because most suppliers will
give it to you and it just gives you that little bit extra extra money
back every year yeah it's a little bit similar to what
kind of the retailers do like tesco where they pay for payment
well i was thinking more promotional payment so it's like if you want to list
your product with this before you even put one product on the shelf pay us 20
grand it's like i don't know how a listing agreement so used to do this in newspapers
(16:36):
and magazines so if you wanted to have your magazine stocked in wsmith because
they've only got so much shelf space so minimum spend kind of well they just
say it costs 10 grand so you know do that so so
we've also got auto renewal clauses so i
mean these have become ten a penny now haven't they i mean most things are
on auto renewal and things like that and the aim is to
run in some ways to trick people trick busy people into just going oh i can't
(16:59):
i've got time to deal with that so they become very sticky i like this this
is a very sticky clause isn't it and i think this also links to when you think
about your payment processes if you are a business that does have monthly subscriptions
then getting onto direct debit or using something like GoCardless or something like that,
you don't want your customer to be thinking about having to pay you every month.
It just needs to be automatic.
If they have to think about paying you, not only do they forget to pay you and
(17:22):
you then got chased, etc., etc., but there's the risk that it's mindful to them
every month that they just might not pay you and they might cancel instead,
whereas you want it to be a to-do job.
If they think, oh, I'm not quite getting value out of this, it's a to-do job
for them to go and cancel the subscription and therefore they're far less likely to do it.
Yeah, I agree with that. And then we've got early renewal discounts.
(17:42):
What do you mean by this, Simon? Early renewal discounts is sort of getting
hold of a customer contract and rather than wait till that big event date when
the contract ends is actually to approach them early and actually offer them
an incentive to renew the contract or start the contract or sign up to the contract
before they hit that event date.
So almost not giving them time to strategize and think about their plan ahead.
(18:04):
Yeah, and that's a really key thing to get in a customer.
If you've got a 12-month contract, start having that conversation with the customer.
Even as early as six months with them because if it's going to take
you a few months to get that contract in place and what that does prevent them
doing is it's not they're probably that early
on unlikely to be approaching your competitors and saying
can we have a competitive quote yeah and avoid tender so we used
(18:26):
to use this a lot it's a great it used to work really well
it was like you know we're going to do x y and z if you agree to you
know to agree to it now early we used to
always go in early with our contracts it really really works and
it also just the competitors just hated it because it just kept them out for
another four years like the tender's gone now yeah i mean in small
businesses you're unlikely to have these really long tenders but even
(18:46):
if you're just looking at you know if you're a support business
you know like my business for example supporting customers for you know
six or twelve months at a time that if at that four
month stage if i started having a conversation saying do you want to just let's
let's get a new 12 month contract on the table now it just gives me financial
stability for the next 12 months which is really crucial as a business yeah
and then i've got next up is loyalty based pricing So this is really just about
(19:08):
linking price into how long someone's been with you as a customer.
Again, just keeping, you know, ratcheting.
It's a bit like no claims bonuses and all these kind of things that get there
and just making people feel like, you know, if they disappear,
they're going to be spending more.
Well, this is a really interesting one, actually, because when I worked as a
finance director, I was responsible for the pricing team.
And this is something that we debated time upon time that we,
(19:32):
this whole conversation started, this podcast was about making customers more
sticky because the longer a customer has been with you, the more likely they are to stay with you.
So there's a strong argument to say that you shouldn't be discounting your most
loyal customers because they're not with you because of price. Right.
Yes, there are some times where it's good to give rewards, you know,
(19:54):
don't just give a discount to a long customer for the sake of it.
You want to use that opportunity. So if you're going to, for example,
I don't know, send a customer a voucher and say, have £200 off,
it needs to be off something that you're trying to promote.
So a brand new product, a brand new service, an addition that you're trying
to get them to buy from you. It shouldn't just be, thank you for buying from us, have £200 off.
(20:15):
It should be because you're trying to upsell something. So you need to use that very carefully.
And very cleverly yeah i mean big companies use this a lot when you know they
kind of show the bill and then they show you a loyalty discount that's there
for how long you've been sky and people like that you know the big companies
like that do that a lot i think it's a difficult
tightrope to walk because you're absolutely right the the more loyal the customer
is the the stick the stick of the on the less they care about price and all
(20:37):
the rest of it but equally.
And we know a lot of big businesses don't do this because they they rake in
their new customers at much better prices but actually that can really wind
up the law once and then you lose them anyway Anyway, so yeah,
interesting one, but actually difficult to navigate loyalty-based pricing.
The next one I've got is around performance guarantees. So this is more for
service-led businesses.
And this is where you can offer financially linked SLA targets in contracts
(21:00):
and various other things.
So, you know, if you don't meet certain things that the customer gets X off
or, you know, there's various links there, that gives them, you know,
a level of confidence and stickiness around the fact that they know they're
going to get the customer service required.
Otherwise, they get a financial benefit in return. And again,
I've used these in the past and they work well.
Yeah, this is a really, like sort of unpacking this and explaining how small
(21:21):
businesses can use this.
So if the scenario that we talked about with the customer that I worked with,
where we said the intention is that they can guarantee 100% of the logistics moves of the customer.
And it was a big concern of them. They rightly said, you know,
if we stop using all of our other suppliers and then you let us down,
then, you know, we could be up shit creek without a paddle, if you like.
(21:42):
Like, so it was a big thing for them in that scenario.
And that could have been, we didn't need to, but we had in the back of our minds
that we were prepared to say, look, if we let you down, if this happens,
we will financially compensate you or we will compensate you in some way, whatever that is.
And that's how you could really use that to maybe just get that customer over
(22:03):
the line if they're concerned about only having one source of supply moving forward.
And then the final one I've got here is about value-add services.
This is more about bundling, offering additional benefits within it.
I guess a really good example of this is I've just been going through a process
of looking at our health insurance between different categories.
And one of them that do this very well is Vitality, who, I mean,
(22:25):
their bundling's just got ridiculous.
Actually, you know, their price point was the highest of them all.
But what you got was crazy. I mean, we looked at everything from,
you know, free gym membership to 20% of your entire waitrose shopping every
week. for the key bits in terms of milk. But we looked at it and it really does kick back.
So actually, you've got to kind of do a calculation to work out whether that
(22:47):
is actually better for you or not.
But it does make people very sticky because otherwise they lose their benefits.
Banks do this very well with current accounts and benefits and things like that.
I think with the bundling, it makes it very difficult for your customer to go
and get a comparative quote.
And that's what you want to do is you need to create a bundle that's so unique that
it's difficult for them if they wanted to move
(23:07):
away from you they would have to move to multiple suppliers and
therefore it just seems like a bit of a hassle so that
that that's where that bundling can be really critical because you're just actually
you're making their life easy because they've got one source of supply for multiple
different things yeah so i think bundling offering additional services can be
a really interesting way of kind of getting your customers to stick yeah so
(23:29):
i i've actually used this in my business and i find this really really useful.
So, you know, as everybody knows, I offer monthly management accounts and you
get a board meeting with me and things like that to talk through your numbers
and drive your business forward.
But I noticed that a lot of my customers were saying to me that they find dealing
with their bookkeeper a headache because their bookkeeper is always chasing
them and asking them questions and things like that. So I was like,
(23:50):
well, look, I'll deal with that for you. I'll be the one point of supply.
Funnel everything through me. I'll essentially act as your finance director
in every way. I won't just do your management accounts. I'll be your finance director.
And so they can bolt on what I call like a bookkeeping assurance.
So not only will I be that point of contact for the bookkeeper,
but I'll also check what the bookkeeper's doing and make sure,
you know, because I'm more qualified than a bookkeeper, I'll make sure that
(24:12):
what they're doing is correct.
So yeah, it's a really good value add service because the business owner doesn't
even know, So, you know, it's that unless they go through the qualification
and become a bookkeeper, it's hard to manage the bookkeeper.
Whereas giving it to someone who's, you know, SEMA qualified,
ACA qualified, you know, you can really, really just hone down and,
you know, keep an eye on that bookkeeper.
(24:33):
That's a great way that I can make my customers more sticky because they could
easily go and get management accounts somewhere else.
There are lots of people out there that do what I do. I'm not,
well, not lots of people, but there are people out there.
But could they get that bookkeeper assurance as well? And that knowledge that
I build up by doing that makes it much more difficult for them to move that service elsewhere.
So that's a way that I made my customers more sticky by doing that bundling. Awesome.
(24:55):
So I hope you found that useful. How to make your customers more sticky without the use of honey.
Let's move on to this week's Profit Cash Growth Extra.
Oh, Simon, I am surprised it has taken so long for this to make Profit Cash
Growth Extra, to be fair.
Yeah, I really like this. For me, this one is Udemy. And Udemy is a self-learning,
(25:20):
self-studying platform with lots of step-by-step video tutorials.
Now, I used this when we were on holiday the other week for the second time
and completely learned how to do Google PPC from these guys who put together a fantastic course.
The course costs like 50 quid. And I really enjoyed the fact that,
it tracks exactly where you are because you can come and go into
(25:42):
it i actually really like the fact that i
said this to you didn't i that i actually like the fact that it wouldn't allow me
to increase the speed of the video yeah you
can on youtube and things like that above the normal speed so it kind of forces
you to really take it in yeah yeah so udemy is like youtube isn't it just in
a much more structured way so people that provide training they create video
(26:03):
courses and upload them onto udemy and you can buy some there's actually some
free stuff on udemy and And, you know,
most of the courses range from about £10 to £50, actually.
So it's quite reasonable in price, right up to literally you get,
you know, courses at £1,000 on there.
But you have done several courses on Udemy. It's not the first time you've used
it, is it? But you've used it recently for pay-per-click.
You've just also topped up your skills in Facebook ads as well.
(26:26):
There's all sorts on there. You can learn finance.
You can learn health and safety.
There is so much that you can learn on there.
It's just everything. everything and they do do the keep keep your eye out because they
do these big kind of discount massive discount off days where for
like five days they're like oh every course is 11 pound
and it's like you know it's down from 50 quid to 11 pound so the facebook ads
one should have been 50 quid i paid 50 quid for the google one and it was down
(26:49):
at 11 quid and it's just like a bargain i mean it's just great if you're into
self-learning it's a different way of learning to you know a book i like reading
as well and actually as you saw with the google public i i got a really good
book and I got the Udemy as well.
I actually did both and both added different levels of value at different tiers
but it's different types of learning.
A book can't really give you that step by step so you can sit with your screen
(27:09):
on one and the screen on the other whereas it can give you more insightful information I think.
Yeah I also think that a key part of retaining employees in today's world is
about learning and development as well.
Not only retaining them but also it keeps them more engaged,
teaches them new skills and things like that.
So I've worked in businesses where employees have got a learning budget and
this is you know a bite-sized courses that you know like a 10 or a time or 50
(27:33):
quid a time it might be that you could even use this and maybe give your employees
a budget to spend on related topics too it's a really good idea and did you know.
50% of people that listen to this podcast don't actually subscribe to it.
Oh, that is absolutely staggering.
It's unbelievable, isn't it? I don't know how they can deal with it not dropping
into their feed every week.
(27:54):
Thank you to those 50% that do and to those 50% that don't. Please hit that
subscribe button and you'll get notified every Thursday at 7am when we release the new podcast.
And 95% of people have not yet left a review, which I'm amazed at.
I mean, if we could just ask one favour, if you do enjoy this podcast,
just hit the five stars hit the like leave us a review whatever
(28:15):
it is depending on the platform that you use what that does
is that just really helps us boost this podcast to other small business
owners and really help everybody increase their
profits their cash flow grow their business and boost their
business skills yeah and head over to the youtube channel profit cash growth
head over to the website profitcashgrowth.com if you want to have a look at
all of the various services that Claire offers to help you grow your business
(28:39):
and if there's any topics that you are interested in and you would like us to
cover either on the YouTube channel or on the podcast,
do drop us an email at marketing at profitcashgrowth.com and we will do our
very best to cover the topic for you. Great. And we'll see you again next week.
Music.
This week, did you know James Dyson owns more of UK land than the King?
And we ask how you can make your customers more sticky without the use of honey or glue.
Welcome to the Profit Cash Growth Podcast. This is the podcast for six and seven
figure business owners who are looking to grow a financially successful business.
My co-host Claire Hancock is a finance director, chartered accountant and entrepreneur.
(00:22):
And every week I'll be exploring guidance and frameworks designed to help you
increase your profits, improve your cash flow and grow your business.
Right, Claire, now you've had a good sneeze. How are you? Sorry about that.
We're just about to record and Claire's like, I'm going to sneeze.
Hopefully Simon would have edited that out though. And therefore this conversation
and this bit of shit chat is completely pointless.
(00:44):
Yeah, we didn't launch the podcast with a great big sneeze, but there we go.
What have you been up to this week? I have been eagerly anticipating the start of the Euros.
True. When will this go out? It will be one week and one day till kickoff in Munich begins.
So yeah I'm very excited about that I love it love
a good football tournament you don't really love a good football tournament do
(01:05):
you I like the Euros and the World Cup because it's just it's always in summer and everyone
just it's the drink and the sun and everything it's great love all that I love
the atmosphere around it and everything I'm not a big football fan but I do
like to when it's England I do like it it's great yeah I think definitely though
I have got the sports bug in this relationship as we said the other day I am
either playing sports watching sports or recovering not at the moment.
(01:27):
Because I've got a I'm outgyming you at the moment, that is for sure.
Why is that, Claire? I've got a potentially fractured ankle after a little netball injury.
So, yeah, I'm feeling a bit sorry for myself, hobbling around with an incredibly
bruised and swollen ankle right now.
Well, your friend's given you a free HelloFresh box with limited amounts of
protein to help build that bone and muscle back up anyway, hasn't it?
(01:47):
Yeah, unfortunately. Because it's vegan and vegetarian. Vegan and vegetarian,
but we can add some protein into that to aid my recovery. I love the way that
you've taken the vegan and vegetarian HelloFresh box and every recipe you look
at, you're like, Like, yeah, we'll just add a load of meat to that.
Yes, we'll just add a load of meat and cheese to that. Yeah,
we'll just add a load of meat and cheese to that.
So the answer to making everything in your view better is just fill it with
meat. Meat it up, yeah. No, I'm recovering.
(02:08):
I've got to fix my injury and I've got to go back into the gym.
You are, in fairness. It's been quicker. It's three or four days and you are
moving in the right direction. Exactly.
Your foot's now only half the size of it was four days ago. Yeah.
Anyway, let's move on to this week's news story of the week.
Bye.
So, Claire, this week, did you know that James Dyson, this ties into the rich
(02:32):
list that just came out recently anyway, which James Dyson is also always in the top five, isn't he?
He's slipping a little bit, I must say. But did you know he owns more UK land than the Queen?
Well, I said the Queen. It's not the Queen anymore. It'd be the King,
wouldn't it? Why was the headline the Queen? This must have been an old article.
Yeah, 33,000 acres of farmland.
In fact, it's quite ironic that you made that little slip there and referred
(02:55):
to it as the Queen because when I was watching the FA Cup final,
the poor woman that was singing the national anthem also said, God save the Queen.
So it's obviously not something for everybody yet that we now have a king and
not a queen. I call this a new story. It's more of an old story.
This isn't a new thing. I just didn't know this.
I heard somebody else talking about it and I was just like, this is really interesting.
(03:18):
Let's unpack this and see what this is all about.
It is really interesting because I think most people's initial reaction when they read this,
they'll just assume that James Dyson comes from a family of
landowners and he did come from a not amazing
wealth but you know he was brought up in a nice country
house in Norfolk and he does come from a bit of money
because him and many of the generations before him all went to private school
(03:40):
so I think we're not claiming that it's a rags to riches story nonetheless the
reason that he owns so much land is because Because Dyson is not actually just
a vacuum cleaning company anymore, is it?
In fact, Dyson Farming is the largest farming business in the UK.
And I just thought that was staggering.
Absolutely staggering. It's wild. He's got houses all over the place.
(04:02):
Doddington Park, house in Chelsea, house in Norfolk.
And these all have land around them and various other things.
So, yeah, I mean, obviously, let's not beat around the bush.
This is vastly to do with inheritance tax, isn't it? No.
You don't think? No, it's because he's the largest farming business in the UK.
But do you not think he's become the largest farmer because it's the best form
of passing on wealth you can possibly do? Farmland's inheritance tax-free. No.
(04:26):
It's what very wealthy people do. They buy up agricultural land and for years
and years and years they pass it on because it's inheritance tax-free.
That's the big, I think that's the big reason. And they're not going to say
that in the article specifically, but it's going to be a massive part of it.
Well, Mr. Cynical Simon.
It's not cynical. If you go to any wealth planner, they will,
if you're wealthy enough, the most advanced sort of tax avoidance strategies are farmland.
(04:51):
Look, I would say that... I know this because I'm planning for myself.
I may be vastly misjudging James Dyson, but he is such a philanthropist.
I do not get the impression that he is buying so much of the UK purely for tax
reasons. You know, we look at how he reacted in COVID when he deployed so many
of his businesses resource at a cost to him to work on building.
(05:13):
Breathing equipment yeah yeah ventilators ventilators and
things like that in the covid crisis he gives literally millions
and millions of pounds every year to charity and he is
very very well known for um a lot of
the work that he does so i'm not knocking it but i don't believe that the
reason he's buying land is for tax reasons not primarily
a good business person always has two angles to
(05:34):
what they're doing don't they they go yeah that's great i want to do that but also obviously
this fits really nicely because it's inheritance tax free when
i pass it on to my family but he is building a huge farming
business he's talked quite a lot about the instability and
the food security crisis that the uk could potentially face because we
import so much of our food nobody wants to if you're a good business person
your priority is to build to build a farming business because farming is not
(05:58):
particularly lucrative it's terribly difficult to make a profit and it's steeped
in regular it's a horrible industry to go in so hence i double back to my My
primary may be inheritance tax and owning land.
I mean, wealthy people own land because land goes up in value and,
you know, land can be rentable and can generate an income.
It's just the thing that very wealthy people do.
(06:20):
And I think, yeah, you can look at it whichever way you like.
But primarily, I think that's the benefit of why he's doing it.
But I'm pleased that he's, you know, he's doing good things with the land that
he does own. He's not just sitting on it. He's actually farming it, yeah?
Yeah. Yeah, I mean, the biggest farming business in the UK, I don't even think
we can begin to comprehend how much food most of us must eat on a daily basis
(06:44):
that comes from James Dyson's farm.
So yeah, I think it is a business, it is humongous, and it's going to be needed more and more.
So it's a growing market. So actually, from a business perspective,
I think it is probably a really great industry to be in.
Historically, UK, if you look at our food prices around the world,
they've been rock bottom compared to other countries. And therefore,
we are going to start paying more for our food, but it will be better quality
(07:07):
and we will start growing more in the UK and relying less on imports.
And so, therefore, I just think this is going to be an industry that actually
really tough at the moment, but long term, I think it's going to be very lucrative.
Yeah. And I think he'll be fine as long as we keep buying his new £600 electric
mop that he's just launched. What do you reckon about that? Yeah, that is true.
It's wild, yeah. The prices of the Dyson products are barmy. A mop?
(07:30):
I mean, do we need an electric mop? I don't know. No, but we didn't need a £600
vacuum cleaner either and the £400 hairdryer. No, but they were better.
They are loads better than what's come before.
You know, that hairdryer, I mean, God, I sound like a hairdryer connoisseur,
but I do use your hairdryer. It is good, isn't it?
It's way better than a hair dryer I would say but it still functionally does well
(07:52):
it does I never take that hair dryer with me anywhere I bought that
hair dryer feels like it's going to last forever though like forever I
agree it seems very good quality so to buy a
50 quid one and swap it every 5 years that
feels like it's going to last your lifetime I reckon you'll still be drying your hair
with that when you're 90 yeah but I the hair dryer before
that I probably had for 15 years as well and it probably cost me about
£10 from Argos so from that perspective you're not arguing why you
(08:14):
bought that no well I bought it because I get very static
hair and it claimed to stop the staticness so
i spent 400 pound on this bloody hair dryer and i've
still got static hair and good marketing yeah every
time i go away for you know stay in a hotel stay
at a friend's house i would never ever dream of taking my hair dryer with me
i just use whatever hair dryer is available and i can't notice any difference
(08:35):
whatsoever so it's the same reason people buy teslas isn't it the whole dyson
thing like it is you know i guess like the mentality of it it's just like it
seems we don't need it somehow they're a very luxury good quality product up
and they make some really good marketing claims.
I'm not saying their marketing claims are wrong, but can it cure my wildly static hair? No, it can't.
(08:56):
Well, let's move on to this week's deep dive, which is how to make your customers more sticky.
So, you don't mean physically sticky, no.
Ah, what a shame. You do like bees. We talked about World Bee Day the other week.
Yes, I really wanted us to go on a bee day. No, don't go down there.
(09:18):
Move on, move on, move on, move on, move on.
We're not talking about that. So, how do you make your customers more sticky?
What you mean is, how do you increase retention of your customers?
That's what you're talking about, isn't it? And this is because you've just
done a big, smart move with one of your clients, and then we're going to expand
on other things that can be done as well, isn't it? Yeah, absolutely.
So I have been working with a client for a number of years now and they are
(09:39):
looking, exiting their business because they're nearing retirement age.
So whether that's exiting the business with a management team in place and they
retain ownership or whether they sell the business.
But one of the key things that we needed to do was achieve certainty.
And when I say certainty, I mean certainty of like a minimum amount of sales every month.
Because this business is it basically does logistics
(10:02):
of cars so they don't have any contracts
at the moment and the reason is because they are they
specialize mostly in like event work and film work and things like that so they're
this type of business that starts from zero every month they've got customers
that are repeat spending with them but every job is quoted as an individual
job and there's never a guarantee of what work and so we saw this as a significant
(10:23):
risk not only for the business at the moment,
but also looking from like a buyer's perspective of a buyer coming into the
business, they would look at this and say, well,
what if we don't get sales next month? Who is the person responsible for getting those sales?
And what if something happens to them? So we were looking at this from a risk perspective.
And the obvious thing was to say, okay, well, we need to get some contracts,
(10:44):
but it was impossible to get contracts because without knowing the details of
the job, we couldn't quote. So we couldn't put any price in the contract.
And the customers didn't know how many jobs they were going to be able to give us.
So they couldn't guarantee any quantities or anything like that.
So it was kind of business.
And I'm sure lots of small businesses are like this where a contract just doesn't
work. You can't sign your customers into anything.
(11:06):
They often work purely on gentleman's agreements and various other things.
I know this client doesn't have any contracts, or didn't until this point,
and this is what this process is all about.
The challenges with that is it makes the business wholly unsaleable.
Not wholly, but it's a bigger risk factor.
The contract and the fact that the owner is integral, is key man driven with the owner.
(11:29):
Those two things make your business unsaleable. You have to deal with both of them.
They're the two key things. Because, you know, the person needs to buy a business
knowing that all the customers can walk out tomorrow because you just wouldn't do that. That's major.
And the same when the business owner walks out, that it keeps running.
So you've got a management team that works without you in it.
And, you know, they're kind of the big ones, isn't it? Yeah.
(11:49):
So we dealt with that by having conversations.
We've actually secured three customers now that are worth like multi six figure
contracts a year. So this is the size that we're talking about.
But what we did is we started by approaching one of the biggest customers.
And we said, look, we know that you're working with us predominantly.
They gave probably about 50 to 60 percent of their contracts to this particular business.
(12:11):
And we said, look, we know we get most of your work, but we know that you're
using our competitors, too.
And what we want to do is improve our service and our relationship so that the
only company that you use is us. And that was the conversation that we had.
And we ended up coming to an agreement where we said, you know,
could we put pricing into a contract or something like that?
(12:34):
And we had all these barriers, the reasons why we couldn't put pricing into the contract.
And we ended up coming to what I would say was a little bit like a gentleman's
agreement, where we agreed that the intention of customer A was to give all
the business to the supplier.
And the intention of the supplier was to be able to deliver on 100% of their needs.
(12:55):
We used to call this in the corporate world when
you couldn't do an exclusivity agreement you call it a preferred supplier agreement
yeah exactly a preferred supplier agreement or an intention first right
first refusal that type of that type of contractual agreement that you would
go to them first give them the opportunity to quote or various things doesn't
mean that they'll give them the business because if the price isn't right various
other things but first first right refusal type of thing yeah interesting and
(13:19):
what's that done for the business oh it's been incredible so So overnight,
they have got all of the work that was going to the competitor.
So they've gone, I think this customer in particular was worth currently about 100k to them.
And now they've done about 150k already just for this one customer.
And that's just one customer.
And we're now rolling out the same sort of structure.
(13:40):
So it's having that conversation with the customer initially about the service
that you can offer and what their needs are.
That's really important that we start it that way. then having a conversation about
you know preferred supply or an intention contract whatever it
is that you want to call it and then get that contract signed and
it's also one of the benefits of
this is it's given the business a structure to how they manage their
(14:01):
sales team so from my perspective I came at this from a
risk and a finance perspective I said this is a financial instability to
your business because you don't have any guaranteed sales
or guaranteed customers that you know
will will not go elsewhere yeah but the benefits of
this is that it's helped them with their sales process as well because they
didn't they didn't really have any way of regularly meeting with their customers
(14:23):
and reviewing service and talking about opportunities and you know being that
first foot in the door when there's new projects and things like that and so
now every quarter they have a catch-up with this customer and they talk about
how the contract is working for both of them,
what the pricing's like for both of them and also that's an opportunity to talk
about any potential work that's coming up to make sure that not only are they
(14:45):
prepared and they can deliver on the work but also that you know they get that
first foot in the door and if there's something they can do to help the customer
get it over the line then they can do all of that so it's had a.
Much greater benefit over and above just secure giving them a little bit more financial security,
amazing amazing yeah good one preferred supply agreements
really really like it that got us thinking didn't it about what else businesses
(15:07):
can and should be doing to make their customers more sticky i'm just going to
whiz through a few here i won't go into too much detail on this one because
you can actually whiz back and find an entire podcast about business rebates
or contractual rebates but just give us a complete outline quick outline on
what a rebate agreement would be and how that could make a customer more sticky?
Yeah, so a rebate would be that you would say to a customer,
if you spend £100,000 with me in 12 months, I'll give you 1% back at the end of that 12 months.
(15:32):
So it's that type of agreement where it's over a period of time and they get
a kickback at the end of it if they hit certain targets.
And that can be quite powerful if your customer is trying to push you on pricing.
You don't want to, if a customer say to you, oh, I'm going to do loads of business
with you if you give me a cheaper price, you're like, well, well,
I can't give you a cheaper price now, but if you do hit those targets,
you'll get the kickback at the end.
(15:53):
Yeah, so it could be a really great tool for managing those pricing conversations.
I've been in loads of businesses that have used rebates and in a big way,
talking to British Airways in the last podcast, you know, we had a big rebate
agreement with British Airways.
So really good way of getting people to actually ratchet up and spend more and
increase their average customer spend.
And also just a really quick tip, use this with your suppliers too.
(16:13):
Ask your suppliers for rebates because most suppliers will
give it to you and it just gives you that little bit extra extra money
back every year yeah it's a little bit similar to what
kind of the retailers do like tesco where they pay for payment
well i was thinking more promotional payment so it's like if you want to list
your product with this before you even put one product on the shelf pay us 20
grand it's like i don't know how a listing agreement so used to do this in newspapers
(16:36):
and magazines so if you wanted to have your magazine stocked in wsmith because
they've only got so much shelf space so minimum spend kind of well they just
say it costs 10 grand so you know do that so so
we've also got auto renewal clauses so i
mean these have become ten a penny now haven't they i mean most things are
on auto renewal and things like that and the aim is to
run in some ways to trick people trick busy people into just going oh i can't
(16:59):
i've got time to deal with that so they become very sticky i like this this
is a very sticky clause isn't it and i think this also links to when you think
about your payment processes if you are a business that does have monthly subscriptions
then getting onto direct debit or using something like GoCardless or something like that,
you don't want your customer to be thinking about having to pay you every month.
It just needs to be automatic.
If they have to think about paying you, not only do they forget to pay you and
(17:22):
you then got chased, etc., etc., but there's the risk that it's mindful to them
every month that they just might not pay you and they might cancel instead,
whereas you want it to be a to-do job.
If they think, oh, I'm not quite getting value out of this, it's a to-do job
for them to go and cancel the subscription and therefore they're far less likely to do it.
Yeah, I agree with that. And then we've got early renewal discounts.
(17:42):
What do you mean by this, Simon? Early renewal discounts is sort of getting
hold of a customer contract and rather than wait till that big event date when
the contract ends is actually to approach them early and actually offer them
an incentive to renew the contract or start the contract or sign up to the contract
before they hit that event date.
So almost not giving them time to strategize and think about their plan ahead.
(18:04):
Yeah, and that's a really key thing to get in a customer.
If you've got a 12-month contract, start having that conversation with the customer.
Even as early as six months with them because if it's going to take
you a few months to get that contract in place and what that does prevent them
doing is it's not they're probably that early
on unlikely to be approaching your competitors and saying
can we have a competitive quote yeah and avoid tender so we used
(18:26):
to use this a lot it's a great it used to work really well
it was like you know we're going to do x y and z if you agree to you
know to agree to it now early we used to
always go in early with our contracts it really really works and
it also just the competitors just hated it because it just kept them out for
another four years like the tender's gone now yeah i mean in small
businesses you're unlikely to have these really long tenders but even
(18:46):
if you're just looking at you know if you're a support business
you know like my business for example supporting customers for you know
six or twelve months at a time that if at that four
month stage if i started having a conversation saying do you want to just let's
let's get a new 12 month contract on the table now it just gives me financial
stability for the next 12 months which is really crucial as a business yeah
and then i've got next up is loyalty based pricing So this is really just about
(19:08):
linking price into how long someone's been with you as a customer.
Again, just keeping, you know, ratcheting.
It's a bit like no claims bonuses and all these kind of things that get there
and just making people feel like, you know, if they disappear,
they're going to be spending more.
Well, this is a really interesting one, actually, because when I worked as a
finance director, I was responsible for the pricing team.
And this is something that we debated time upon time that we,
(19:32):
this whole conversation started, this podcast was about making customers more
sticky because the longer a customer has been with you, the more likely they are to stay with you.
So there's a strong argument to say that you shouldn't be discounting your most
loyal customers because they're not with you because of price. Right.
Yes, there are some times where it's good to give rewards, you know,
(19:54):
don't just give a discount to a long customer for the sake of it.
You want to use that opportunity. So if you're going to, for example,
I don't know, send a customer a voucher and say, have £200 off,
it needs to be off something that you're trying to promote.
So a brand new product, a brand new service, an addition that you're trying
to get them to buy from you. It shouldn't just be, thank you for buying from us, have £200 off.
(20:15):
It should be because you're trying to upsell something. So you need to use that very carefully.
And very cleverly yeah i mean big companies use this a lot when you know they
kind of show the bill and then they show you a loyalty discount that's there
for how long you've been sky and people like that you know the big companies
like that do that a lot i think it's a difficult
tightrope to walk because you're absolutely right the the more loyal the customer
is the the stick the stick of the on the less they care about price and all
(20:37):
the rest of it but equally.
And we know a lot of big businesses don't do this because they they rake in
their new customers at much better prices but actually that can really wind
up the law once and then you lose them anyway Anyway, so yeah,
interesting one, but actually difficult to navigate loyalty-based pricing.
The next one I've got is around performance guarantees. So this is more for
service-led businesses.
And this is where you can offer financially linked SLA targets in contracts
(21:00):
and various other things.
So, you know, if you don't meet certain things that the customer gets X off
or, you know, there's various links there, that gives them, you know,
a level of confidence and stickiness around the fact that they know they're
going to get the customer service required.
Otherwise, they get a financial benefit in return. And again,
I've used these in the past and they work well.
Yeah, this is a really, like sort of unpacking this and explaining how small
(21:21):
businesses can use this.
So if the scenario that we talked about with the customer that I worked with,
where we said the intention is that they can guarantee 100% of the logistics moves of the customer.
And it was a big concern of them. They rightly said, you know,
if we stop using all of our other suppliers and then you let us down,
then, you know, we could be up shit creek without a paddle, if you like.
(21:42):
Like, so it was a big thing for them in that scenario.
And that could have been, we didn't need to, but we had in the back of our minds
that we were prepared to say, look, if we let you down, if this happens,
we will financially compensate you or we will compensate you in some way, whatever that is.
And that's how you could really use that to maybe just get that customer over
(22:03):
the line if they're concerned about only having one source of supply moving forward.
And then the final one I've got here is about value-add services.
This is more about bundling, offering additional benefits within it.
I guess a really good example of this is I've just been going through a process
of looking at our health insurance between different categories.
And one of them that do this very well is Vitality, who, I mean,
(22:25):
their bundling's just got ridiculous.
Actually, you know, their price point was the highest of them all.
But what you got was crazy. I mean, we looked at everything from,
you know, free gym membership to 20% of your entire waitrose shopping every
week. for the key bits in terms of milk. But we looked at it and it really does kick back.
So actually, you've got to kind of do a calculation to work out whether that
(22:47):
is actually better for you or not.
But it does make people very sticky because otherwise they lose their benefits.
Banks do this very well with current accounts and benefits and things like that.
I think with the bundling, it makes it very difficult for your customer to go
and get a comparative quote.
And that's what you want to do is you need to create a bundle that's so unique that
it's difficult for them if they wanted to move
(23:07):
away from you they would have to move to multiple suppliers and
therefore it just seems like a bit of a hassle so that
that that's where that bundling can be really critical because you're just actually
you're making their life easy because they've got one source of supply for multiple
different things yeah so i think bundling offering additional services can be
a really interesting way of kind of getting your customers to stick yeah so
(23:29):
i i've actually used this in my business and i find this really really useful.
So, you know, as everybody knows, I offer monthly management accounts and you
get a board meeting with me and things like that to talk through your numbers
and drive your business forward.
But I noticed that a lot of my customers were saying to me that they find dealing
with their bookkeeper a headache because their bookkeeper is always chasing
them and asking them questions and things like that. So I was like,
(23:50):
well, look, I'll deal with that for you. I'll be the one point of supply.
Funnel everything through me. I'll essentially act as your finance director
in every way. I won't just do your management accounts. I'll be your finance director.
And so they can bolt on what I call like a bookkeeping assurance.
So not only will I be that point of contact for the bookkeeper,
but I'll also check what the bookkeeper's doing and make sure,
you know, because I'm more qualified than a bookkeeper, I'll make sure that
(24:12):
what they're doing is correct.
So yeah, it's a really good value add service because the business owner doesn't
even know, So, you know, it's that unless they go through the qualification
and become a bookkeeper, it's hard to manage the bookkeeper.
Whereas giving it to someone who's, you know, SEMA qualified,
ACA qualified, you know, you can really, really just hone down and,
you know, keep an eye on that bookkeeper.
(24:33):
That's a great way that I can make my customers more sticky because they could
easily go and get management accounts somewhere else.
There are lots of people out there that do what I do. I'm not,
well, not lots of people, but there are people out there.
But could they get that bookkeeper assurance as well? And that knowledge that
I build up by doing that makes it much more difficult for them to move that service elsewhere.
So that's a way that I made my customers more sticky by doing that bundling. Awesome.
(24:55):
So I hope you found that useful. How to make your customers more sticky without the use of honey.
Let's move on to this week's Profit Cash Growth Extra.
Oh, Simon, I am surprised it has taken so long for this to make Profit Cash
Growth Extra, to be fair.
Yeah, I really like this. For me, this one is Udemy. And Udemy is a self-learning,
(25:20):
self-studying platform with lots of step-by-step video tutorials.
Now, I used this when we were on holiday the other week for the second time
and completely learned how to do Google PPC from these guys who put together a fantastic course.
The course costs like 50 quid. And I really enjoyed the fact that,
it tracks exactly where you are because you can come and go into
(25:42):
it i actually really like the fact that i
said this to you didn't i that i actually like the fact that it wouldn't allow me
to increase the speed of the video yeah you
can on youtube and things like that above the normal speed so it kind of forces
you to really take it in yeah yeah so udemy is like youtube isn't it just in
a much more structured way so people that provide training they create video
(26:03):
courses and upload them onto udemy and you can buy some there's actually some
free stuff on udemy and And, you know,
most of the courses range from about £10 to £50, actually.
So it's quite reasonable in price, right up to literally you get,
you know, courses at £1,000 on there.
But you have done several courses on Udemy. It's not the first time you've used
it, is it? But you've used it recently for pay-per-click.
You've just also topped up your skills in Facebook ads as well.
(26:26):
There's all sorts on there. You can learn finance.
You can learn health and safety.
There is so much that you can learn on there.
It's just everything. everything and they do do the keep keep your eye out because they
do these big kind of discount massive discount off days where for
like five days they're like oh every course is 11 pound
and it's like you know it's down from 50 quid to 11 pound so the facebook ads
one should have been 50 quid i paid 50 quid for the google one and it was down
(26:49):
at 11 quid and it's just like a bargain i mean it's just great if you're into
self-learning it's a different way of learning to you know a book i like reading
as well and actually as you saw with the google public i i got a really good
book and I got the Udemy as well.
I actually did both and both added different levels of value at different tiers
but it's different types of learning.
A book can't really give you that step by step so you can sit with your screen
(27:09):
on one and the screen on the other whereas it can give you more insightful information I think.
Yeah I also think that a key part of retaining employees in today's world is
about learning and development as well.
Not only retaining them but also it keeps them more engaged,
teaches them new skills and things like that.
So I've worked in businesses where employees have got a learning budget and
this is you know a bite-sized courses that you know like a 10 or a time or 50
(27:33):
quid a time it might be that you could even use this and maybe give your employees
a budget to spend on related topics too it's a really good idea and did you know.
50% of people that listen to this podcast don't actually subscribe to it.
Oh, that is absolutely staggering.
It's unbelievable, isn't it? I don't know how they can deal with it not dropping
into their feed every week.
(27:54):
Thank you to those 50% that do and to those 50% that don't. Please hit that
subscribe button and you'll get notified every Thursday at 7am when we release the new podcast.
And 95% of people have not yet left a review, which I'm amazed at.
I mean, if we could just ask one favour, if you do enjoy this podcast,
just hit the five stars hit the like leave us a review whatever
(28:15):
it is depending on the platform that you use what that does
is that just really helps us boost this podcast to other small business
owners and really help everybody increase their
profits their cash flow grow their business and boost their
business skills yeah and head over to the youtube channel profit cash growth
head over to the website profitcashgrowth.com if you want to have a look at
all of the various services that Claire offers to help you grow your business
(28:39):
and if there's any topics that you are interested in and you would like us to
cover either on the YouTube channel or on the podcast,
do drop us an email at marketing at profitcashgrowth.com and we will do our
very best to cover the topic for you. Great. And we'll see you again next week.
Music.
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