June 9, 2025 • 49 mins
In this eye-opening episode, Michael Barbarita and Chuki Obiyo reveal why most business owners are leaving substantial revenue on the table without realizing it. You'll discover the "Revenue Multiplication Formula" that identifies hidden revenue opportunities within your existing operations, customer base, and business model. Learn how to unlock revenue streams you already have but aren't maximizing, without spending additional money on marketing or customer acquisition.
Powerful Business Strategies is broadcast live Mondays at 12 Noon ET Music on W4CY Radio (www.w4cy.com) part of Talk 4 Radio (www.talk4radio.com) on the Talk 4 Media Network (www.talk4media.com). Powerful Business Strategies is viewed on Talk 4 TV (www.talk4tv.com).
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Powerful Business Strategies is broadcast live Mondays at 12 Noon ET Music on W4CY Radio (www.w4cy.com) part of Talk 4 Radio (www.talk4radio.com) on the Talk 4 Media Network (www.talk4media.com). Powerful Business Strategies is viewed on Talk 4 TV (www.talk4tv.com).
Powerful Business Strategies Podcast is also available on Talk 4 Media (www.talk4media.com), Talk 4 Podcasting (www.talk4podcasting.com), iHeartRadio, Amazon Music, Pandora, Spotify, Audible, and over 100 other podcast outlets.
Become a supporter of this podcast: https://www.spreaker.com/podcast/powerful-business-strategies--6198916/support.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The topics and opinions expressed in the following show are
solely those of the hosts and their guests and not
those of W FOURCY Radio. It's employees are affiliates. We
make no recommendations or endorsements for radio show programs, services,
or products mentioned on air or on our web. No
liability explicitor implies shall be extended to W FOURCY Radio
or it's employees are affiliates. Any questions or comments should
be directed to those show hosts. Thank you for choosing
(00:21):
W FOURCY Radio.
Speaker 2 (00:27):
Welcome to Powerful Business Strategies, where you will find out
that everything you have ever learned about growing your business
is wrong. Finally, a show where you'll learn the right
way to grow your business by learning business and financial
strategies that your competition isn't doing. And now here's your host.
(00:47):
President of NeXTSTEP CFO Michael Barbarita and joining Michael for
today's show as an executive moderator is chooky obia.
Speaker 3 (01:00):
Yes, this is schuekin. I believe that gratitude is undefeated
and growth is about the next step. It is an
honor for me to moderate today's discussion.
Speaker 4 (01:10):
With my good friend Michael.
Speaker 3 (01:11):
Michael, how are you.
Speaker 4 (01:13):
Fantastic cher k. Thank you well.
Speaker 5 (01:15):
My name is Michael Barberia, President of Next Step CFO,
and next Step CFO is a fractional CFO and strategic
implementation firm.
Speaker 4 (01:23):
Business owners hire us to double and.
Speaker 5 (01:25):
Triple their profit using business and financial strategies that their
competition isn't doing. Our vision is to ensure that overwhelmed
business owners achieve consistent profit that leads to time freedom
to build the legacy and the life they desire. Our
mission is dedicated to guidance small business owners to leveraging
their time, exploding their profits, and building a meaningful legacy.
(01:48):
And this show powerful business Strategies in our book of
the same name, is a step toward accomplishing that vision
and mission. So with that, I'd like to hand it
back to my co author and moderated for the show,
Chicky Obio.
Speaker 3 (02:00):
It's funny Michael and I were talking right before the
show started, and I'm really inspired by today's episode. It's
really about the abundance mindset, the revenue multiplication formula which
Michael's wisdom will get us into. So look, a really
quick disclaimer, Michael and I are both affiliated with a
number of different organizations. I currently serve as a managing
director of business Development for Veta Price, a global business
(02:22):
focused law firm. But in addition to that look, it's
truly an honor to collaborate with Michael to moderate business
roundtables coast to coast, even international, and then we document
these insights as part of our book, Powerful Business Strategies.
And please note that the views expressed on this show
are views based on very successful experiences from these roundtables
(02:45):
and beyond. And my mission is a fearless moderator, is
to ask the right questions to help you, the listener,
learn the best strategies that the competition isn't doing. With that,
back over to Michael.
Speaker 4 (02:57):
Thank you, Jocky.
Speaker 5 (02:58):
So, before we dive into today's topic, I want to
share something that could surprise you. Maybe not, but right now,
within your existing business, there's money waiting to be discovered,
not in some complex new venture or expensive expansion or
something complicated with big shifts, but in opportunities that you
(03:20):
walk past every single day. And most business owners spend
their time chasing new customers when gold mines actually exist.
Speaker 4 (03:28):
Within their current operations.
Speaker 5 (03:29):
And I've seen businesses increase revenue by forty fifty, even
eighty percent, simply by recognizing and capturing value they already
have and they already created but are not monetizing. And
so today isn't about working harder, spending more money on marketing,
but today is about opening your eyes to the revenue
(03:51):
opportunities that already surround you. Because when you learn to
see your business through a lens of hidden revenue potential,
I wonder why you ever missed these opportunities in the
first place. So we're exploring one of my favorite business topics,
by the way, finding hidden revenue within your existing operations.
Speaker 4 (04:11):
And I call this.
Speaker 6 (04:14):
One of your favorites, one of my favorites. Anything to
do with more money, it's one of my favorites. It's
based on a simple but powerful premise that most businesses
are sitting on substantial, untapped revenue opportunities that require little
to no investment to capture. And let me start by
(04:36):
sharing a story that I think illustrates this concept. A
commercial cleaning company was struggling to grow despite having an
excellent reputation and building loyal customers on the owner was
considering expensive considering expensive marketing campaigns and geographic expansion when
(04:57):
she discovered something interesting. So during her analysis, she found
that this company's technicians were regularly identifying maintenance issues in
their clients' facilities, whether it's things like burnt out like fixtures,
maybe warned carpeting, minor plumbing problems, even hvac inefficiencies.
Speaker 4 (05:21):
But here's the key.
Speaker 5 (05:22):
They were simply noting these issues in their reports without
doing anything about them, and she realized that this represented
a massive untapped revenue opportunity. The company already had trusted
relationships with these clients, their staff was on site regularly,
and they were naturally discovering genuine needs. All they needed
(05:43):
was a system to capitalize on this existing value, and
they created a program where they began offering coordinated solutions
for the issues they were already identifying, and they partnered
with qualified vendors outside for services outside their fertise and
handled which they marked up by the way, and build
(06:05):
others in house. And within eight months, this single initiative
increased their revenue by thirty four percent without acquiring a
single new customer. And this example demonstrates the core principle
of hidden revenue multiplication because the biggest opportunities are often
hiding in plain sight within your current operations.
Speaker 3 (06:28):
Michael, that's a fascinating example. But how common is it
for businesses to have these kinds of hidden revenue opportunities?
I mean, is this something that applies mainly to service
businesses or would you say it's across industries.
Speaker 5 (06:42):
Oh that's a great question. So well, in my experience,
you know, working with businesses across dozens of industries, I
estimate that at least half of the companies has significant
untapped revenue opportunities within their existing operation. And this isn't
limited to service businesses at all. I see it everywhere.
(07:03):
For example, I saw a manufacturing company was selling industrial equipment,
but was it offering installation training or any of the
ongoing maintenance services. And they were leaving essentially sixty percent
of the total customer value on the table because they
were thinking of themselves as manufacturers rather than a complete
(07:24):
solution provider.
Speaker 4 (07:27):
And similarly, a retail client, this go.
Speaker 5 (07:31):
That customers frequently outs their staff for advice about complementary
products they didn't carry. Instead of seeing this as an inconvenience,
he repositioned it as a revenue opportunity and created a
special order program with preferred vendor relationships, and this one
thing added eighteen percent that their annual revenue with minimal
(07:52):
minimal additional overhead. So the revenue multiplication formula applies universally
because it's based on free, fundamental truths about business, and
this is really important. First, every business creates value beyond
what they currently monetize. You solve problems, You provide insights,
(08:13):
make connections, and deliver outcomes that you might not be
charging for. Second, your existing customers trust you and would
often buy additional products or services from you if you
offer them. It's much easier to expand relationships with current
customers than to acquire new ones.
Speaker 4 (08:32):
We all know that your current operation.
Speaker 5 (08:37):
Generates data, relationships, and capabilities that can be leveraged for
additional revenue streams. You're already investing in these assets. The
question is whether you're maximizing their return. So the revenue
multiplication formula helps you systematically identify and capture these opportunities
through a structured approach with four key components. Number one
(08:59):
first opponent is value inventory, cataloging all the value that
you currently create, including value you're not charging for. Second
is customer expansion analysis. Identifying additional ways to serve your
existing customer base profitably. Third is asset leverage assessment, finding
(09:20):
ways to monetize your existing capabilities, relationships, and data. And
then fourth revenue stream integration. This is implementing new revenue
streams in ways that enhance rather than distract from your
current core business. So let's explore that first component called
(09:41):
value inventory, and this is the process of cataloging all
the value that you currently create, including value you're not
charging for. So most business owners, for example, significantly underestimate
the breadth of value that they provide to customers, and
this blind spot cost them substantial revenue. So here is
(10:04):
a systematic approach to conducting your value inventory. First, document
every customer touch point and interaction, so you map out
the complete customer journey from initial contact through the ongoing relationship.
At each touch point, you ask what value are we
(10:25):
providing here? And by the way, don't just consider the
obvious paid services. Look for advice. You'll look for advice, insights, connections,
problem solving, or convenience that you provide without explicit compensation.
For example, we give you an example. A business consultant
realized that during brief check in calls with clients, she
(10:48):
was routinely providing valuable strategic advice that other consultants were
charging one hundreds of dollars for. These calls were positioned
as customers service from her perspective, but they were actually
delivering substantial consulting value that could be monetized. Second, analyze
(11:09):
your team's expertise and knowledge. Your employees possess knowledge and
skills that extend beyond their immediate job functions. This expertise
often creates monetizable value that you're not capturing. An accounting forum,
for example, discovered that their staff regularly answered complex tax
(11:29):
questions during routine bookkeeping services, and these weren't simple clarifications.
They were actually providing tax advice that specialized tax consultants
charge premium rates for, and so by creating a structured
tax advisory service, they increase their average.
Speaker 4 (11:45):
Client value by twenty eight percent.
Speaker 5 (11:49):
Third, examining your businesses process and systems. Often, the systems
that you've developed to run your business officially could be
valuable to other businesses facing similar challenges the right and
by the way. This might include proprietary methodologies, software configurations.
(12:11):
Maybe it's a training program or some type of operational framework.
For instance, a restaurant chain had developed an exceptionally effective
staff training system to maintain consistency across locations. So what
did they do. They practiced this system as a consulting
service for other restaurants, and it created an entirely new
(12:33):
revenue stream that leveraged an asset that they or that
they already created. Fourth is identify connection and relationship opportunities.
Your business likely sits at the intersection of multiple industries, vendors,
and customer types, and these connections often represent untapped revenue
(12:54):
opportunities through referrals, partnerships, or facilitated introductions. So, for example,
a construction company realized that they were regularly connecting clients
with interior designers, landscapers, and also specialty contractors. Instead of
making these referrals informally, they became a trusted partner. They
(13:17):
created a trusted partner network where they actually received referral
fees while providing clients with pre vented service providers. And
this is that's part of the joint venture strategy that
we that we showed you in previous shows. Fifth, analyze
your data and insights. Your business generates data about market trends,
(13:42):
customer behavior, and industry patterns that actually could be valuable
to others. And this might include market research, benchmarking data,
or industry insights.
Speaker 4 (13:53):
You know.
Speaker 5 (13:54):
For example, a distribution company began selling Anama animized market
data to suppliers, providing insights about regional demand patterns and
customer preferences. And this new revenue stream require i mean
little additional effort since they were already collecting the data
(14:17):
for internal purposes.
Speaker 3 (14:19):
Well that's really insightful, Michael. But how I've got to
go deep on this? How do business owners determine which
of these hidden value opportunities are worth pursuing?
Speaker 4 (14:30):
Right?
Speaker 3 (14:30):
Because I imagine not all these opportunities are created equal.
Speaker 5 (14:33):
Oh you're right, for sure, not all hidden opportunities are
created equal. And the key is to evaluate potential opportunities
against specific criteria to prioritize those with the highest return
on investment. So here are three Yeah, here are three
criteria that I use to evaluate hidden revenue opportunities.
Speaker 4 (14:55):
First, market demand validation.
Speaker 5 (14:59):
Just because you can and provide something doesn't mean there's
a sufficient demand to make it profitable. So before investing
time in developing a new revenue stream, validate that customers
are willing to pay for it. You can do this
through simple surveys of existing customers, in formal conversations during
regular business interactions, or small scale testing.
Speaker 4 (15:21):
And here's an example.
Speaker 5 (15:22):
The County account The accounting firm that I mentioned earlier,
started by asking three existing clients if they'd be interested
in formal tax advisory services for developing the complete offering.
Speaker 4 (15:35):
Of course the answer is yes. Second, implementation complexity.
Speaker 5 (15:40):
Some opportunities require minimal additional resources to implement, while others
would require significant investment in new systems, training.
Speaker 4 (15:51):
Or personnel.
Speaker 5 (15:53):
So you prioritize opportunities that leverage your existing capabilities and infrastructure.
For example, if you are already having conversations with customers
about complementary services, formalizing that into a revenue stream is
much simple in the developing new technical capabilities and Third,
(16:15):
alignment with core business. So the best hidden revenue opportunities
enhance your core business rather than detract from it or
distract from it. Look for opportunities that deepen the customer relationship,
increase customer stickiness, leverage your existing reputation and expertise, and
(16:37):
create cross selling or up selling opportunities with current services,
and that systematic approach ensures that you focus on opportunities
that provide the greatest return with the least risk and
resource investment.
Speaker 4 (16:53):
That's a very.
Speaker 3 (16:54):
Practical framework for evaluation, Michael. And as you know from
some of our business roundtable conversations, I mean, disruption is
a big part of why business owners don't necessarily take
that first step. So, you know, let's business owners have
identified and prioritized these hidden value opportunities. I mean, what's
the best way to begin implementation.
Speaker 5 (17:15):
Well, the biggest mistake businesses make when pursuing these hidden
revenue opportunities is trying to do everything at once, not
to implement at all, just you know, fire all the guns,
and that could overwhelm their systems and distract from their
core business. The key is strate strategic, phased, phased implementation.
(17:38):
So here's an approach to implementation. First start with pilot
programs rather than full launches. This is where I go
back to that I've said so many times about testing.
Choose one priority opportunity implemented on a small scale with
a limited group of customers, and this allows you to
refine your approach, identify potential issues and validate the business
(18:00):
model before committing significant resources. For example, the business consultant
I mentioned earlier didn't immediately offer formal strategic advisory calls
to all clients. She started by offering this service to
three existing clients as a pilot program, and then refine
her approach based on their feedback, and then gradually expanded
(18:24):
to her full client base, so it's very gradual. Second,
verge leverage existing touch points rather than creating new ones.
So the most successful hidden revenue implementations build on existing
customer interactions rather than creating additional complexity. If you're already
(18:45):
talking to customers regularly, find ways to incorporate new offerings
into those conversations. Third, ensure adequate systems and processes are
in place before scaling them. Revenue opportunities often require slightly
different processes than your core business, so develop these clear proceeds,
(19:10):
pricing structures, and delivery methods during the pilot phase so
that you can scale smoothly and trust issues. Fourth, train
your team gradually. Your staff needs to understand these new
offerings and feel comfortable presenting them to customers, and start
with key team members.
Speaker 4 (19:26):
Validate the approach and then expand training to the broader team.
Speaker 5 (19:30):
And then fifth, measure results carefully before the beginning, right
from the beginning. Excuse me, so track not just revenue
from new offerings, but also their impact on customer satisfaction,
team productivity, and core business performance. And this data will
guide your scaling decisions. And so a manufacturing company implemented
(19:56):
this approach really, really, really well, and they identified that
customers frequently asked for installation and training services. So instead
of immediately creating a full service department, they selected five
existing customers for a pilot installation program.
Speaker 4 (20:13):
They partnered with.
Speaker 5 (20:15):
An established installation contractor for the first few projects. They
developed standardized processes and pricing based on pilot results, They
trained their sales team on the new offering, and they
gradually brought installation capabilities in house as demand grew.
Speaker 4 (20:34):
And this.
Speaker 5 (20:36):
Phased approach allowed them to actually validate the opportunity, refine
the execution, and scale profitability without disrupting their core manufacturing
operations because we know business owners hate that.
Speaker 3 (20:50):
Oh amen to that, right, Michael. Look, that's excellent advice
for implementation. Just to make this as practical as possible.
What a two key action items that you would recommend.
Speaker 4 (21:02):
Okay, well, as we wrap up this segment should be.
Speaker 5 (21:05):
The first action item is to spend one week documented
documenting every interaction your team has with customers, noting any
extra advice, extra insights, or additional value they provide beyond
your core service, and how team members keep simple locks
of questions that they answer, problems that they solve, or
(21:28):
connections they facilitate that aren't part of your standard offering,
and you'll be surprised how much valuable service you're providing
without compensation. The second action item is to survey five
of your best customers about additional services they would value
from you, and ask specific questions like what are the
(21:51):
challenges are you facing that we might be able to
help you with? And also ask them things like what
services do you currently purchase from other VENs? Is that
you wish we could provide and their responses will reveal
hidden revenue opportunities based on real market demand rather than assumptions.
And then our next segment, we're going to explore the
customer expansion analysis, how to systematically identify additional ways to
(22:17):
serve your existing customer base profitably and increase the lifetime
value of each relationship. So before I continue, we're going
to take a ninety second break. Hey, their business owners,
let me ask you something. Are you tied of blending
in with your competitors, frustrated with slow growth and slim margins.
Speaker 4 (22:38):
Well, I've got news for you.
Speaker 5 (22:41):
Everything you've ever learned about growing your business is wrong.
Speaker 4 (22:45):
But don't worry.
Speaker 5 (22:46):
I'm here to let you in on a secret weapon,
your position of market dominance. It's what sets you apart,
makes you irreplaceable, and has customers lining up at your door.
My name is Michael Barberrita from NeXTSTEP CFO. I know
what you're thinking. Sounds great, Michael, How do I find
my position of market dominance? Well, that's exactly why we've
(23:08):
created our game changing impleventation program called Next Step to
Market Dominance. In just ninety days, we'll guide you step
by step to a position of market dominance by uncovering
your unique strengths that competitors can't touch. By crafting a
message that resonates deeply with your ideal customer, by building
a strategy that turns you into the go to.
Speaker 4 (23:28):
Expert in your field. Now this is in theory.
Speaker 5 (23:31):
These are battle tested strategies that have helped businesses like
you as double, triple and quadruple their revenue. Don't let
another quarter go by struggling to standout. It's time to
dominate your market period. Go to NEXTSTEPCFO dot net forward
slash contact. Fill out the form and in the message
section put the word dominate or call us at seven
(23:55):
eighty one three two six three eight two two. That's
next step CFO dot net forward slash contact or call
us at seven eighty one three two six three eight
two two. Welcome back to Powerful Business Strategies and remember
you can catch all of our replays at Powerful Business
Strategies dot com. So the before the break, we discuss
(24:17):
value inventory, cataloging all the value that you currently create,
including value you're not charging for, especially value you're not
charging for. Now, let's explore that second component of our
revenue multiplication formula called customer expansion analysis, and this is
about systematically identifying additional ways to serve your existing customer
base profitably. The fundamental principle here is that it's much
(24:41):
easier and more profitable to expand relationships with current customers
than to acquire new ones. And here's why customer expansion
is so powerful. Existing customers already trust you, they understand
your value, and you've established buying patents. They have in
these custom have established buying patterns with your business. The
(25:04):
sale cycle is shorter, the conversion rates are higher, and
the lifetime value increases dramatically. And studies consistently show that
increasing customer retention rates by just five percent can increase
profits by as much as twenty to fifty percent. Now,
let me walk you through a systematic approach to customer expansion. First,
(25:31):
segment your customers by profitably by profitability and growth potential,
not how customers are equally valuable for expansion efforts, and
then create three segments high value customers who are profitable
and have significant expansion potential, medium value customers who have
(25:51):
become high value with the right expansion, and then low
value customers who may not justify significant expansion investments. Focused
most of your expansion efforts on the first two segments,
where your return on investment will be the highest. Second,
in aligns each customer's total market opportunity. This means understanding
(26:17):
the full scope of what each customer spends on products
or services related to your industry. Not just what they
spend with you, and this share of wallet analysis actually
reveals how much room exists for expansion. And let me
give you an example. So a marketing agency discovered that
their typical client spent one hundred and eighty thousand dollars
(26:38):
annually on various marketing services, but they were only capturing
forty five thousand dollars off that spend. This analysis revealed
an expansion opportunity within their existing customer base. Third map
customer pain points and unmet needs. Your existing customers face
challenges beyond what you currently all for them. Some of
(27:01):
these challenges might be addressable through expansions of your current
services or new offerings. So conduct structured interviews with key
customers focusing on their broader challenge goal broader challenges they've
brought their their goals and frustrations. Ask questions like what
other vendors do you work with in our industry? What
(27:22):
challenges do you face with that that vendor is not
solving well? And what would happen what would need to happen?
The better way for you to consolidate more services with
fewer vendors. By the way, customers love that. Customers love
consolidating services. There's fewer ship tos, there's fewer invoices to
(27:45):
deal with. It's just and there's you know, less phone
calls or emails to order product. Yes, poor identify natural
expansion pathways. Look for logical extensions of your current services
that offer additional value to customers and these These might
include complimentary services that enhance the core offering. They could
(28:07):
include higher level strategic services that build on your current work.
They can include related services that address customer adjacent customer needs.
And they can include maintenance or support or ongoing services
for core delivererals, deliverables. And a software development company identified
(28:29):
that clients needed ongoing technical support, staff, training on new systems,
and regular updates and enhancements, and by systematically offering these
services to existing clients, they increase their average customer value
from eighty five grand to one hundred and forty two
grand over two years. Fifth create expansion offers that feel
(28:53):
natural and valuable. The key to successful customer expansion is
positioning new offerings as logical extensions of your existing relationship
rather than aggressive up selling, and frame expansion opportunities around
customer outcomes and value rather than your need for additional revenue.
Speaker 3 (29:14):
You know that makes a lot of sense. Michael and
I do have a question here, and it's also some
feedback that we've gotten from listeners. How do companies identify
which customers are most likely to be receptive so expansion offers?
And I think we can imagine that there are some
customers that might resonate with this and some customers that
(29:35):
might not. So what's your perspective in that regard?
Speaker 4 (29:39):
So you're right, I mean customer.
Speaker 5 (29:43):
Reception of these concepts varies significantly, and targeting the wrong
customers with expansion offers, can.
Speaker 4 (29:51):
You know they can potentially damage relationships?
Speaker 5 (29:53):
So the key is, yeah, the keys developing a systematic
approach to identifying expansion ready customers. And here's the key
indicators I look for when assessing expansion readiness. First, relationship
depth and satisfaction. Customers who are most likely to expand
those who have been you for at least six months.
(30:15):
They've experienced your value. They consistently pay on time and
don't negotiate aggressively on pricing. They provide positive feedback and
express satisfaction with your current services. They refer other customers
to your business, and they include you in strategic conversations
beyond your immediate service area. Second, growth indicators within their business.
(30:43):
So expanding companies often need expanded services. So look for
customers who are increasing the scope or frequency of their
current services. Are hiring new staff or expanding operations, are
entering new markets or launching new products, or even expressing
frustration with multiple vendors and managing those multiple vendors and
(31:05):
then asking for advice beyond your current service scope is
another indicator that they're looking for expansion of your services.
Third vendor consolidation preferences. Some customers prefer working with multiple
specialized vendors, while others value the convenience and accountability of
those consolidated relationships.
Speaker 4 (31:27):
I find the latter to be more frequent.
Speaker 5 (31:29):
Identify consolidation oriented customers by listening to phrases like we'd
prefer to work with fewer vendors. It's challenging to coordinate
between different service providers. We wish we had one point
of contact for all of these things, and do you
know anyone who could help us with that related service
(31:51):
boy budget authority, and decision making power. So expansion opportunities
are most viable when you're working with customers who have
the authority and budget to make additional purchasing decisions, and
this might require understanding their decision making process and identifying
(32:14):
the right stakeholders for expansion conversations. And let me share
a specific example of how this sucsess works at practice. So,
a commercial insurance broker analyzed their customer base and identified
their most expansion ready customers.
Speaker 4 (32:30):
She had three characteristics.
Speaker 5 (32:32):
They had been clients for more than eighteen months, they
had grown their business by more than fifteen percent in
the past year, and they regularly asked the broker for
advice on risk management issues beyond insurance. And by focusing
exp expansion efforts exclusively on customers meeting this criteria, they
achieved a seventy three percent success rate on expansion offers,
(32:56):
compared to a twenty three percent success rate when they
approached becausestomers randomly. So the key insight here is that
customer expansion should be strategic and targeted rather than broadly applied.
And when you focus on the right customers at the
right time with the right offers, expansion becomes a natural
evolution of the relationship rather than aggressive an aggressive sales tactic.
Speaker 3 (33:24):
Yeah, Michael, we don't know anything about aggressive sales taxics
at all. Business owners have to look out. Those are
excellent strategies for making expansion financially viable.
Speaker 4 (33:35):
And Michael, that's.
Speaker 3 (33:36):
Credit to your strategic CFO mindset. So to wrap up
this segment, what are two key action items that you'd recommend.
Speaker 5 (33:43):
So the first one is to create a customer a
customer what I call a customer expansion scorecard for your
top twenty customers. Rate each customer on a scale of
one to five for relationship satisfaction, business growth, vendor consulate
preference and budget authority.
Speaker 4 (34:03):
Focus on your.
Speaker 5 (34:04):
Initial expansion efforts on scores customer scores that are fifteen
or higher out of twenty, and this target approach will
dramatically improve your success rate compare it to generic expansion attempts.
And the second action item is to conduct strategic need
assessments with high scoring customers in.
Speaker 4 (34:24):
The next month.
Speaker 5 (34:26):
Don't approach these as sales conversation, by the way, but
as strategic discussions about their challenges and goals. Ask about
their complete ecosystem of vendors, their upcoming initiatives, and their
pain points with current service providers. These conversations will reveal
specific expansion opportunities based on real customer needs rather than
(34:50):
assumptions about what they might want. And in our next segment,
we'll explore asset leverage, asset leverage assessment, and how to
monitor your existing capabilities, relationships, and data in ways that
create new revenute streams without significant additional adjustment. So before
I continue this discussion, we're going to take a ninety
(35:13):
second break. Hey there, business owners, let me ask you something.
Are you tied of blending in with your competitors? Frustrated
with slow growth and slim margins? Well, I've got news
for you. Everything you've ever learned about growing your business
is wrong.
Speaker 4 (35:30):
But don't worry.
Speaker 5 (35:31):
I'm here to let you in on a secret weapon,
your position of market dominance. It's what sets you apart,
makes you irreplaceable, and has customers lining up at your door.
My name is Michael Barbarrita from Next Step CFO. I
know what you're thinking. Sounds great, Michael, But how do
I find my position of market dominance? Well, that's exactly
(35:53):
why we've created our game changing implementation program called Next
Step to Market Dominance in just ninety Well, guys, you
step by step to a position of market dominance by
uncovering your unique strengths that competitors can't touch. By crafting
a message that resonates deeply with your ideal customer, by
building a strategy that turns you into the go to
(36:13):
expert in your field.
Speaker 4 (36:15):
Now this is in theory.
Speaker 5 (36:17):
These are battle tests and strategies that have help businesses
like yours double, triple, and quadruple their revenue. Don't let
another quarter go by struggling to standout. It's time to
dominate your market period. Go to NEXTSTEPCFO dot net forward
slash contact.
Speaker 4 (36:34):
Fill out the form and in.
Speaker 5 (36:36):
The message section put the word dominate or call us
at seven eight one three two six three A two two.
That's next STEPCFO dot net forward slash contact or call
us at seven eight one three two six three A
two two. Welcome back to Powerful Business Strategies and remember
you can catch any replay at Powerful Business Strategies dot com.
(37:00):
So far we've covered value, inventory and customer expansion analysis.
Let's explore the third component of our revenue multiplication formula,
asset leverage assessment. And this is about finding ways to
monetize your existing capabilities relationships, and data. You see, most
businesses have valuable assets that could generate additional revenue but
(37:24):
are currently under utilized or they're not monetized at all.
And the key is recognizing these assets and developing creative
ways to extract value from them.
Speaker 4 (37:35):
So let me walk you through the.
Speaker 5 (37:38):
Five major categories of leverage assets that exist in most businesses.
First is intellectual property and expertise. Your business has developed knowledge,
processes and methodologies that could be valuable to others. This
might include proprietary systems, training materials, best practices, or even
(38:00):
specialized knowledge that you take for granted but others would
pay for. So, for example, a specially a successful restaurant
developed an exceptional employee retention system to address the industry's
notorious turnover problems. So instead of keeping this system internal,
they packaged that it's a consulting service for other restaurants,
(38:22):
and this new revenue stream generated over one hundred and
eighty grand in its first year while requiring minimal additional resources. Second,
relationships and network access. Your business sits at the intersection
of various industries, customer types, and vendor relationships. These connections
(38:43):
represent monetizable assets through formal referral programs, partnership arrangements, or
facilitated introductions. And let me give you an example. Our
commercial real estate firm realized that they regularly connected clients
with contractors, architects, interior to designers, and financial service providers,
and instead of making these referrals informally, they created a
(39:06):
trusted partner network with structured referral agreements and this generated
additional ninety five thousand dollars in annually in referral fees
while providing added value to their clients.
Speaker 4 (39:23):
Third, data and market insights.
Speaker 5 (39:26):
Your business generates valuable data about market trends, customer behavior,
industry patterns, and operational benchmarks, and this information could be
valuable to vendors, industry associations, or other businesses facing similar challenges.
Another example, a distribution company began offering anonymous market intelligence
(39:51):
reports to their suppliers, providing insights about regional demand patterns,
seasonal trends, and customer preferences. And this data was a
byproduct of their normal operations, but packaging and professionally created
new revenue stream worth one hundred and twenty thousand dollars annually. Fourth,
(40:11):
Physical assets and infrastructure your equipment, facilities or technological infrastructure
might have capacity that could be monetized during off peak
times or for complementary purposes. For example, a manufacturing company
with specialized equipment realized that they used their machinery at
(40:32):
sixty percent capacity. They began offering contract manufacturing services to
smaller companies who couldn't justify purchasing their own equipment. This
asset leverage strategy increased their revenue by twenty eight percent
while spreading fixed costs across more production volume. Fifth, brand
(40:53):
and reputation assets. Your established reputation and market position could
be leveraged to support to support new revenue streams that
benefit you from that benefit from your credibility and customer trust.
Speaker 4 (41:09):
So here's another example of that. A well regarded accounting.
Speaker 5 (41:13):
Firm leverage their reputation to offer business valuation services for
merchants and acquisitions. And while this requires some additional training,
their established credibility made them immediately competitive in this higher
margin service area.
Speaker 3 (41:29):
These are fascinating examples, Michael, but how do you How
do you advise business owners to come up with a
systematic way to identify which of their assets have the
greatest potential for generating additional revenue. I mean, would this
require shift in mindset for what constitutes a business asset?
Speaker 4 (41:50):
No, you're right, You're right. Tricky.
Speaker 5 (41:52):
See, most business owners think of assets in traditional accounting
terms like equipment, inventory, maybe even real estate. But for
revenue multiplication purposes, we need to think much more broadly
about what constitutes a valuable asset. And here's a systematic
approach for identifying your leverageable assets. First, conducted asset audit
(42:15):
across five categories. For example, ask what do we have
that others might find valuable? And for intellectual assets, inventory
you possess inventory process methodologies, training materials, proprietary knowledge and
problem solving approaches, and ask what do we do differently
(42:39):
or better than typical companies in our industry. And for
relationship assets, map your network of customers, your network of vendors,
your network of partners, and industry connections, and ask who
do we know that can benefit from knowing each other?
In other words, what introductions or connections could we facilitate.
(43:04):
So for data assets, analyze what information you collect in
the normal course of business. So what you ask is
what patterns do we see that others in our industry
would find valuable and what benchmarking or market intelligence could
we provide. And for physical assets, examine your equipment, facilities
(43:29):
and infrastructure utilization and ask what capacity do we have
that's not fully utilized and what resources could serve additional purposes. And,
by the way, I've seen many times where small businesses
want to start out, they need to find a resource
to manufacture or build, and they use the graveyard shift.
(43:52):
I've seen that many times. It happens a lot in
the banking industry too. By the way, for brand assets,
evaluate your reputation, your expertise in market position. Ask what
credibility do we have that could support new offerings and
what trust have we built that could be extended to
related services. Second, apply the external value test to each
(44:17):
identified asset. Just because you have something doesn't mean it's
valuable to others. For each ask for each potential asset,
ask what others would pay for the access to this?
Does this solve a real problem for a specific market
and is this unique or difficult for others to replicate?
And can we deliver this consistently at a profitable price.
(44:39):
Point three, prioritize assets based on monetization complexity, So Some
assets can be monetized with minimal additional investment, while others
require significant development. So start with the assets that have
immediate market demand, low implementation complexity, high margin potential, and
(45:02):
strong alignment with your core business.
Speaker 3 (45:06):
Michael, these are excellent insights. Now to wrap up this segment,
what are two of the most important action items that
you would recommend?
Speaker 5 (45:14):
Well, the first action item is to conduct a comprehensive
audit asset audit using five categories that we discussed that
was intellectual property, relationships, data, physical assets, and brand assets.
And for each category, list everything that you have that
might be valuable to others and then apply the external
(45:35):
value test to identify the most promising opportunities and focus
on assets that actually solve problems for specific markets that
can be monetized with a relatively low complexity. And the
second action item is to identify three potential partnership opportunities
where you can monetize your assets without building new operational
(45:59):
infrastructure and look for established businesses that could benefit from
your intellectual intellectual property.
Speaker 2 (46:06):
You know.
Speaker 5 (46:06):
In our closing segment, I'll explore the revenue stream integration
and how to implement new revenue streams in ways that
enhance rather than distract from your core business, and will
summarize the complete revenue multiplication formula. So, as we wrap
up today's episode on finding hitting money hidden money in
(46:27):
your existing business, let's summarize the complete revenue multiplication formula
and how all four components work together to unlock revenue opportunities.
And we began with value inventory cataloging all the value
you currently create, including value you're not charging for, and
this involves documenting every customer touch point, analyzing your team's expertise,
(46:53):
examining your business process, identifying connection opportunities, and analyzing your
data and insights. Next, we explored customer expansion analysis, systematically
identifying additional ways to serve your existing customer based profitably.
We discussed segmenting customers by potential analyzing total market opportunity,
(47:18):
mapping unmet needs, identifying natural expansion pathways, and creating compelling
offers that feel like a natural relationship evolution. We then
covered asset leverage assessment that's finding ways to monetize your
existing capabilities, your existing relationships, and your existing data. And
(47:41):
this included intellectual property, relationship networks, data insights, physical assets,
and brand reputation.
Speaker 4 (47:50):
We provided a systematic.
Speaker 5 (47:51):
Approach for identifying and prioritizing these assets based on external
value and implementation complexity. And finally, we touched on revenue
stream integration. That's implementing new revenue streams in ways that
enhance enhances rather than distract from your core business through partnerships,
(48:13):
asset light models, workflow integrations, demand testing, and clear boundaries.
You know, the power of this framework comes from recognizing
that substantial revenue opportunities already exist within your business. You
just need to acquire. You don't need to acquire new
customers enter new markets to develop entirely new capabilities. You
(48:35):
need to see and capture the value you're already creating
but not monetizing. And remember, this revenue multiplication is about
working harder. It's about working smarter by recognizing and capturing
what's hiding in plain sight. When you include this systematically,
you'll often discover that the revenue increases come more easily
(49:01):
that traditional growth strategies because you're building on existing strengths
and relationships and chifkey.
Speaker 4 (49:07):
I know we have another question from the audience, but
we're not going to be able.
Speaker 5 (49:10):
To take it unfortunately, so to get a copy of
our book, Powerful Business Strategies, simply go to our website
www dot next STEPCFO. It is totally complementary and until
next Monday at noon Eastern time for Chifkey Obio. My
name is Michael bab Rita. And remember, don't keep doing
(49:30):
what your competition is doing.
Speaker 2 (49:34):
You have been listening to Powerful Business Strategies finding out
that everything you ever learned about growing your business is wrong.
Tune in next week and every week at noon Eastern
time on W four CY Radio with your host Michael
Barbarita of Next Step CFO and moderator Chugy Obio
The topics and opinions expressed in the following show are
solely those of the hosts and their guests and not
those of W FOURCY Radio. It's employees are affiliates. We
make no recommendations or endorsements for radio show programs, services,
or products mentioned on air or on our web. No
liability explicitor implies shall be extended to W FOURCY Radio
or it's employees are affiliates. Any questions or comments should
be directed to those show hosts. Thank you for choosing
(00:21):
W FOURCY Radio.
Speaker 2 (00:27):
Welcome to Powerful Business Strategies, where you will find out
that everything you have ever learned about growing your business
is wrong. Finally, a show where you'll learn the right
way to grow your business by learning business and financial
strategies that your competition isn't doing. And now here's your host.
(00:47):
President of NeXTSTEP CFO Michael Barbarita and joining Michael for
today's show as an executive moderator is chooky obia.
Speaker 3 (01:00):
Yes, this is schuekin. I believe that gratitude is undefeated
and growth is about the next step. It is an
honor for me to moderate today's discussion.
Speaker 4 (01:10):
With my good friend Michael.
Speaker 3 (01:11):
Michael, how are you.
Speaker 4 (01:13):
Fantastic cher k. Thank you well.
Speaker 5 (01:15):
My name is Michael Barberia, President of Next Step CFO,
and next Step CFO is a fractional CFO and strategic
implementation firm.
Speaker 4 (01:23):
Business owners hire us to double and.
Speaker 5 (01:25):
Triple their profit using business and financial strategies that their
competition isn't doing. Our vision is to ensure that overwhelmed
business owners achieve consistent profit that leads to time freedom
to build the legacy and the life they desire. Our
mission is dedicated to guidance small business owners to leveraging
their time, exploding their profits, and building a meaningful legacy.
(01:48):
And this show powerful business Strategies in our book of
the same name, is a step toward accomplishing that vision
and mission. So with that, I'd like to hand it
back to my co author and moderated for the show,
Chicky Obio.
Speaker 3 (02:00):
It's funny Michael and I were talking right before the
show started, and I'm really inspired by today's episode. It's
really about the abundance mindset, the revenue multiplication formula which
Michael's wisdom will get us into. So look, a really
quick disclaimer, Michael and I are both affiliated with a
number of different organizations. I currently serve as a managing
director of business Development for Veta Price, a global business
(02:22):
focused law firm. But in addition to that look, it's
truly an honor to collaborate with Michael to moderate business
roundtables coast to coast, even international, and then we document
these insights as part of our book, Powerful Business Strategies.
And please note that the views expressed on this show
are views based on very successful experiences from these roundtables
(02:45):
and beyond. And my mission is a fearless moderator, is
to ask the right questions to help you, the listener,
learn the best strategies that the competition isn't doing. With that,
back over to Michael.
Speaker 4 (02:57):
Thank you, Jocky.
Speaker 5 (02:58):
So, before we dive into today's topic, I want to
share something that could surprise you. Maybe not, but right now,
within your existing business, there's money waiting to be discovered,
not in some complex new venture or expensive expansion or
something complicated with big shifts, but in opportunities that you
(03:20):
walk past every single day. And most business owners spend
their time chasing new customers when gold mines actually exist.
Speaker 4 (03:28):
Within their current operations.
Speaker 5 (03:29):
And I've seen businesses increase revenue by forty fifty, even
eighty percent, simply by recognizing and capturing value they already
have and they already created but are not monetizing. And
so today isn't about working harder, spending more money on marketing,
but today is about opening your eyes to the revenue
(03:51):
opportunities that already surround you. Because when you learn to
see your business through a lens of hidden revenue potential,
I wonder why you ever missed these opportunities in the
first place. So we're exploring one of my favorite business topics,
by the way, finding hidden revenue within your existing operations.
Speaker 4 (04:11):
And I call this.
Speaker 6 (04:14):
One of your favorites, one of my favorites. Anything to
do with more money, it's one of my favorites. It's
based on a simple but powerful premise that most businesses
are sitting on substantial, untapped revenue opportunities that require little
to no investment to capture. And let me start by
(04:36):
sharing a story that I think illustrates this concept. A
commercial cleaning company was struggling to grow despite having an
excellent reputation and building loyal customers on the owner was
considering expensive considering expensive marketing campaigns and geographic expansion when
(04:57):
she discovered something interesting. So during her analysis, she found
that this company's technicians were regularly identifying maintenance issues in
their clients' facilities, whether it's things like burnt out like fixtures,
maybe warned carpeting, minor plumbing problems, even hvac inefficiencies.
Speaker 4 (05:21):
But here's the key.
Speaker 5 (05:22):
They were simply noting these issues in their reports without
doing anything about them, and she realized that this represented
a massive untapped revenue opportunity. The company already had trusted
relationships with these clients, their staff was on site regularly,
and they were naturally discovering genuine needs. All they needed
(05:43):
was a system to capitalize on this existing value, and
they created a program where they began offering coordinated solutions
for the issues they were already identifying, and they partnered
with qualified vendors outside for services outside their fertise and
handled which they marked up by the way, and build
(06:05):
others in house. And within eight months, this single initiative
increased their revenue by thirty four percent without acquiring a
single new customer. And this example demonstrates the core principle
of hidden revenue multiplication because the biggest opportunities are often
hiding in plain sight within your current operations.
Speaker 3 (06:28):
Michael, that's a fascinating example. But how common is it
for businesses to have these kinds of hidden revenue opportunities?
I mean, is this something that applies mainly to service
businesses or would you say it's across industries.
Speaker 5 (06:42):
Oh that's a great question. So well, in my experience,
you know, working with businesses across dozens of industries, I
estimate that at least half of the companies has significant
untapped revenue opportunities within their existing operation. And this isn't
limited to service businesses at all. I see it everywhere.
(07:03):
For example, I saw a manufacturing company was selling industrial equipment,
but was it offering installation training or any of the
ongoing maintenance services. And they were leaving essentially sixty percent
of the total customer value on the table because they
were thinking of themselves as manufacturers rather than a complete
(07:24):
solution provider.
Speaker 4 (07:27):
And similarly, a retail client, this go.
Speaker 5 (07:31):
That customers frequently outs their staff for advice about complementary
products they didn't carry. Instead of seeing this as an inconvenience,
he repositioned it as a revenue opportunity and created a
special order program with preferred vendor relationships, and this one
thing added eighteen percent that their annual revenue with minimal
(07:52):
minimal additional overhead. So the revenue multiplication formula applies universally
because it's based on free, fundamental truths about business, and
this is really important. First, every business creates value beyond
what they currently monetize. You solve problems, You provide insights,
(08:13):
make connections, and deliver outcomes that you might not be
charging for. Second, your existing customers trust you and would
often buy additional products or services from you if you
offer them. It's much easier to expand relationships with current
customers than to acquire new ones.
Speaker 4 (08:32):
We all know that your current operation.
Speaker 5 (08:37):
Generates data, relationships, and capabilities that can be leveraged for
additional revenue streams. You're already investing in these assets. The
question is whether you're maximizing their return. So the revenue
multiplication formula helps you systematically identify and capture these opportunities
through a structured approach with four key components. Number one
(08:59):
first opponent is value inventory, cataloging all the value that
you currently create, including value you're not charging for. Second
is customer expansion analysis. Identifying additional ways to serve your
existing customer base profitably. Third is asset leverage assessment, finding
(09:20):
ways to monetize your existing capabilities, relationships, and data. And
then fourth revenue stream integration. This is implementing new revenue
streams in ways that enhance rather than distract from your
current core business. So let's explore that first component called
(09:41):
value inventory, and this is the process of cataloging all
the value that you currently create, including value you're not
charging for. So most business owners, for example, significantly underestimate
the breadth of value that they provide to customers, and
this blind spot cost them substantial revenue. So here is
(10:04):
a systematic approach to conducting your value inventory. First, document
every customer touch point and interaction, so you map out
the complete customer journey from initial contact through the ongoing relationship.
At each touch point, you ask what value are we
(10:25):
providing here? And by the way, don't just consider the
obvious paid services. Look for advice. You'll look for advice, insights, connections,
problem solving, or convenience that you provide without explicit compensation.
For example, we give you an example. A business consultant
realized that during brief check in calls with clients, she
(10:48):
was routinely providing valuable strategic advice that other consultants were
charging one hundreds of dollars for. These calls were positioned
as customers service from her perspective, but they were actually
delivering substantial consulting value that could be monetized. Second, analyze
(11:09):
your team's expertise and knowledge. Your employees possess knowledge and
skills that extend beyond their immediate job functions. This expertise
often creates monetizable value that you're not capturing. An accounting forum,
for example, discovered that their staff regularly answered complex tax
(11:29):
questions during routine bookkeeping services, and these weren't simple clarifications.
They were actually providing tax advice that specialized tax consultants
charge premium rates for, and so by creating a structured
tax advisory service, they increase their average.
Speaker 4 (11:45):
Client value by twenty eight percent.
Speaker 5 (11:49):
Third, examining your businesses process and systems. Often, the systems
that you've developed to run your business officially could be
valuable to other businesses facing similar challenges the right and
by the way. This might include proprietary methodologies, software configurations.
(12:11):
Maybe it's a training program or some type of operational framework.
For instance, a restaurant chain had developed an exceptionally effective
staff training system to maintain consistency across locations. So what
did they do. They practiced this system as a consulting
service for other restaurants, and it created an entirely new
(12:33):
revenue stream that leveraged an asset that they or that
they already created. Fourth is identify connection and relationship opportunities.
Your business likely sits at the intersection of multiple industries, vendors,
and customer types, and these connections often represent untapped revenue
(12:54):
opportunities through referrals, partnerships, or facilitated introductions. So, for example,
a construction company realized that they were regularly connecting clients
with interior designers, landscapers, and also specialty contractors. Instead of
making these referrals informally, they became a trusted partner. They
(13:17):
created a trusted partner network where they actually received referral
fees while providing clients with pre vented service providers. And
this is that's part of the joint venture strategy that
we that we showed you in previous shows. Fifth, analyze
your data and insights. Your business generates data about market trends,
(13:42):
customer behavior, and industry patterns that actually could be valuable
to others. And this might include market research, benchmarking data,
or industry insights.
Speaker 4 (13:53):
You know.
Speaker 5 (13:54):
For example, a distribution company began selling Anama animized market
data to suppliers, providing insights about regional demand patterns and
customer preferences. And this new revenue stream require i mean
little additional effort since they were already collecting the data
(14:17):
for internal purposes.
Speaker 3 (14:19):
Well that's really insightful, Michael. But how I've got to
go deep on this? How do business owners determine which
of these hidden value opportunities are worth pursuing?
Speaker 4 (14:30):
Right?
Speaker 3 (14:30):
Because I imagine not all these opportunities are created equal.
Speaker 5 (14:33):
Oh you're right, for sure, not all hidden opportunities are
created equal. And the key is to evaluate potential opportunities
against specific criteria to prioritize those with the highest return
on investment. So here are three Yeah, here are three
criteria that I use to evaluate hidden revenue opportunities.
Speaker 4 (14:55):
First, market demand validation.
Speaker 5 (14:59):
Just because you can and provide something doesn't mean there's
a sufficient demand to make it profitable. So before investing
time in developing a new revenue stream, validate that customers
are willing to pay for it. You can do this
through simple surveys of existing customers, in formal conversations during
regular business interactions, or small scale testing.
Speaker 4 (15:21):
And here's an example.
Speaker 5 (15:22):
The County account The accounting firm that I mentioned earlier,
started by asking three existing clients if they'd be interested
in formal tax advisory services for developing the complete offering.
Speaker 4 (15:35):
Of course the answer is yes. Second, implementation complexity.
Speaker 5 (15:40):
Some opportunities require minimal additional resources to implement, while others
would require significant investment in new systems, training.
Speaker 4 (15:51):
Or personnel.
Speaker 5 (15:53):
So you prioritize opportunities that leverage your existing capabilities and infrastructure.
For example, if you are already having conversations with customers
about complementary services, formalizing that into a revenue stream is
much simple in the developing new technical capabilities and Third,
(16:15):
alignment with core business. So the best hidden revenue opportunities
enhance your core business rather than detract from it or
distract from it. Look for opportunities that deepen the customer relationship,
increase customer stickiness, leverage your existing reputation and expertise, and
(16:37):
create cross selling or up selling opportunities with current services,
and that systematic approach ensures that you focus on opportunities
that provide the greatest return with the least risk and
resource investment.
Speaker 4 (16:53):
That's a very.
Speaker 3 (16:54):
Practical framework for evaluation, Michael. And as you know from
some of our business roundtable conversations, I mean, disruption is
a big part of why business owners don't necessarily take
that first step. So, you know, let's business owners have
identified and prioritized these hidden value opportunities. I mean, what's
the best way to begin implementation.
Speaker 5 (17:15):
Well, the biggest mistake businesses make when pursuing these hidden
revenue opportunities is trying to do everything at once, not
to implement at all, just you know, fire all the guns,
and that could overwhelm their systems and distract from their
core business. The key is strate strategic, phased, phased implementation.
(17:38):
So here's an approach to implementation. First start with pilot
programs rather than full launches. This is where I go
back to that I've said so many times about testing.
Choose one priority opportunity implemented on a small scale with
a limited group of customers, and this allows you to
refine your approach, identify potential issues and validate the business
(18:00):
model before committing significant resources. For example, the business consultant
I mentioned earlier didn't immediately offer formal strategic advisory calls
to all clients. She started by offering this service to
three existing clients as a pilot program, and then refine
her approach based on their feedback, and then gradually expanded
(18:24):
to her full client base, so it's very gradual. Second,
verge leverage existing touch points rather than creating new ones.
So the most successful hidden revenue implementations build on existing
customer interactions rather than creating additional complexity. If you're already
(18:45):
talking to customers regularly, find ways to incorporate new offerings
into those conversations. Third, ensure adequate systems and processes are
in place before scaling them. Revenue opportunities often require slightly
different processes than your core business, so develop these clear proceeds,
(19:10):
pricing structures, and delivery methods during the pilot phase so
that you can scale smoothly and trust issues. Fourth, train
your team gradually. Your staff needs to understand these new
offerings and feel comfortable presenting them to customers, and start
with key team members.
Speaker 4 (19:26):
Validate the approach and then expand training to the broader team.
Speaker 5 (19:30):
And then fifth, measure results carefully before the beginning, right
from the beginning. Excuse me, so track not just revenue
from new offerings, but also their impact on customer satisfaction,
team productivity, and core business performance. And this data will
guide your scaling decisions. And so a manufacturing company implemented
(19:56):
this approach really, really, really well, and they identified that
customers frequently asked for installation and training services. So instead
of immediately creating a full service department, they selected five
existing customers for a pilot installation program.
Speaker 4 (20:13):
They partnered with.
Speaker 5 (20:15):
An established installation contractor for the first few projects. They
developed standardized processes and pricing based on pilot results, They
trained their sales team on the new offering, and they
gradually brought installation capabilities in house as demand grew.
Speaker 4 (20:34):
And this.
Speaker 5 (20:36):
Phased approach allowed them to actually validate the opportunity, refine
the execution, and scale profitability without disrupting their core manufacturing
operations because we know business owners hate that.
Speaker 3 (20:50):
Oh amen to that, right, Michael. Look, that's excellent advice
for implementation. Just to make this as practical as possible.
What a two key action items that you would recommend.
Speaker 4 (21:02):
Okay, well, as we wrap up this segment should be.
Speaker 5 (21:05):
The first action item is to spend one week documented
documenting every interaction your team has with customers, noting any
extra advice, extra insights, or additional value they provide beyond
your core service, and how team members keep simple locks
of questions that they answer, problems that they solve, or
(21:28):
connections they facilitate that aren't part of your standard offering,
and you'll be surprised how much valuable service you're providing
without compensation. The second action item is to survey five
of your best customers about additional services they would value
from you, and ask specific questions like what are the
(21:51):
challenges are you facing that we might be able to
help you with? And also ask them things like what
services do you currently purchase from other VENs? Is that
you wish we could provide and their responses will reveal
hidden revenue opportunities based on real market demand rather than assumptions.
And then our next segment, we're going to explore the
customer expansion analysis, how to systematically identify additional ways to
(22:17):
serve your existing customer base profitably and increase the lifetime
value of each relationship. So before I continue, we're going
to take a ninety second break. Hey, their business owners,
let me ask you something. Are you tied of blending
in with your competitors, frustrated with slow growth and slim margins.
Speaker 4 (22:38):
Well, I've got news for you.
Speaker 5 (22:41):
Everything you've ever learned about growing your business is wrong.
Speaker 4 (22:45):
But don't worry.
Speaker 5 (22:46):
I'm here to let you in on a secret weapon,
your position of market dominance. It's what sets you apart,
makes you irreplaceable, and has customers lining up at your door.
My name is Michael Barberrita from NeXTSTEP CFO. I know
what you're thinking. Sounds great, Michael, How do I find
my position of market dominance? Well, that's exactly why we've
(23:08):
created our game changing impleventation program called Next Step to
Market Dominance. In just ninety days, we'll guide you step
by step to a position of market dominance by uncovering
your unique strengths that competitors can't touch. By crafting a
message that resonates deeply with your ideal customer, by building
a strategy that turns you into the go to.
Speaker 4 (23:28):
Expert in your field. Now this is in theory.
Speaker 5 (23:31):
These are battle tested strategies that have helped businesses like
you as double, triple and quadruple their revenue. Don't let
another quarter go by struggling to standout. It's time to
dominate your market period. Go to NEXTSTEPCFO dot net forward
slash contact. Fill out the form and in the message
section put the word dominate or call us at seven
(23:55):
eighty one three two six three eight two two. That's
next step CFO dot net forward slash contact or call
us at seven eighty one three two six three eight
two two. Welcome back to Powerful Business Strategies and remember
you can catch all of our replays at Powerful Business
Strategies dot com. So the before the break, we discuss
(24:17):
value inventory, cataloging all the value that you currently create,
including value you're not charging for, especially value you're not
charging for. Now, let's explore that second component of our
revenue multiplication formula called customer expansion analysis, and this is
about systematically identifying additional ways to serve your existing customer
base profitably. The fundamental principle here is that it's much
(24:41):
easier and more profitable to expand relationships with current customers
than to acquire new ones. And here's why customer expansion
is so powerful. Existing customers already trust you, they understand
your value, and you've established buying patents. They have in
these custom have established buying patterns with your business. The
(25:04):
sale cycle is shorter, the conversion rates are higher, and
the lifetime value increases dramatically. And studies consistently show that
increasing customer retention rates by just five percent can increase
profits by as much as twenty to fifty percent. Now,
let me walk you through a systematic approach to customer expansion. First,
(25:31):
segment your customers by profitably by profitability and growth potential,
not how customers are equally valuable for expansion efforts, and
then create three segments high value customers who are profitable
and have significant expansion potential, medium value customers who have
(25:51):
become high value with the right expansion, and then low
value customers who may not justify significant expansion investments. Focused
most of your expansion efforts on the first two segments,
where your return on investment will be the highest. Second,
in aligns each customer's total market opportunity. This means understanding
(26:17):
the full scope of what each customer spends on products
or services related to your industry. Not just what they
spend with you, and this share of wallet analysis actually
reveals how much room exists for expansion. And let me
give you an example. So a marketing agency discovered that
their typical client spent one hundred and eighty thousand dollars
(26:38):
annually on various marketing services, but they were only capturing
forty five thousand dollars off that spend. This analysis revealed
an expansion opportunity within their existing customer base. Third map
customer pain points and unmet needs. Your existing customers face
challenges beyond what you currently all for them. Some of
(27:01):
these challenges might be addressable through expansions of your current
services or new offerings. So conduct structured interviews with key
customers focusing on their broader challenge goal broader challenges they've
brought their their goals and frustrations. Ask questions like what
other vendors do you work with in our industry? What
(27:22):
challenges do you face with that that vendor is not
solving well? And what would happen what would need to happen?
The better way for you to consolidate more services with
fewer vendors. By the way, customers love that. Customers love
consolidating services. There's fewer ship tos, there's fewer invoices to
(27:45):
deal with. It's just and there's you know, less phone
calls or emails to order product. Yes, poor identify natural
expansion pathways. Look for logical extensions of your current services
that offer additional value to customers and these These might
include complimentary services that enhance the core offering. They could
(28:07):
include higher level strategic services that build on your current work.
They can include related services that address customer adjacent customer needs.
And they can include maintenance or support or ongoing services
for core delivererals, deliverables. And a software development company identified
(28:29):
that clients needed ongoing technical support, staff, training on new systems,
and regular updates and enhancements, and by systematically offering these
services to existing clients, they increase their average customer value
from eighty five grand to one hundred and forty two
grand over two years. Fifth create expansion offers that feel
(28:53):
natural and valuable. The key to successful customer expansion is
positioning new offerings as logical extensions of your existing relationship
rather than aggressive up selling, and frame expansion opportunities around
customer outcomes and value rather than your need for additional revenue.
Speaker 3 (29:14):
You know that makes a lot of sense. Michael and
I do have a question here, and it's also some
feedback that we've gotten from listeners. How do companies identify
which customers are most likely to be receptive so expansion offers?
And I think we can imagine that there are some
customers that might resonate with this and some customers that
(29:35):
might not. So what's your perspective in that regard?
Speaker 4 (29:39):
So you're right, I mean customer.
Speaker 5 (29:43):
Reception of these concepts varies significantly, and targeting the wrong
customers with expansion offers, can.
Speaker 4 (29:51):
You know they can potentially damage relationships?
Speaker 5 (29:53):
So the key is, yeah, the keys developing a systematic
approach to identifying expansion ready customers. And here's the key
indicators I look for when assessing expansion readiness. First, relationship
depth and satisfaction. Customers who are most likely to expand
those who have been you for at least six months.
(30:15):
They've experienced your value. They consistently pay on time and
don't negotiate aggressively on pricing. They provide positive feedback and
express satisfaction with your current services. They refer other customers
to your business, and they include you in strategic conversations
beyond your immediate service area. Second, growth indicators within their business.
(30:43):
So expanding companies often need expanded services. So look for
customers who are increasing the scope or frequency of their
current services. Are hiring new staff or expanding operations, are
entering new markets or launching new products, or even expressing
frustration with multiple vendors and managing those multiple vendors and
(31:05):
then asking for advice beyond your current service scope is
another indicator that they're looking for expansion of your services.
Third vendor consolidation preferences. Some customers prefer working with multiple
specialized vendors, while others value the convenience and accountability of
those consolidated relationships.
Speaker 4 (31:27):
I find the latter to be more frequent.
Speaker 5 (31:29):
Identify consolidation oriented customers by listening to phrases like we'd
prefer to work with fewer vendors. It's challenging to coordinate
between different service providers. We wish we had one point
of contact for all of these things, and do you
know anyone who could help us with that related service
(31:51):
boy budget authority, and decision making power. So expansion opportunities
are most viable when you're working with customers who have
the authority and budget to make additional purchasing decisions, and
this might require understanding their decision making process and identifying
(32:14):
the right stakeholders for expansion conversations. And let me share
a specific example of how this sucsess works at practice. So,
a commercial insurance broker analyzed their customer base and identified
their most expansion ready customers.
Speaker 4 (32:30):
She had three characteristics.
Speaker 5 (32:32):
They had been clients for more than eighteen months, they
had grown their business by more than fifteen percent in
the past year, and they regularly asked the broker for
advice on risk management issues beyond insurance. And by focusing
exp expansion efforts exclusively on customers meeting this criteria, they
achieved a seventy three percent success rate on expansion offers,
(32:56):
compared to a twenty three percent success rate when they
approached becausestomers randomly. So the key insight here is that
customer expansion should be strategic and targeted rather than broadly applied.
And when you focus on the right customers at the
right time with the right offers, expansion becomes a natural
evolution of the relationship rather than aggressive an aggressive sales tactic.
Speaker 3 (33:24):
Yeah, Michael, we don't know anything about aggressive sales taxics
at all. Business owners have to look out. Those are
excellent strategies for making expansion financially viable.
Speaker 4 (33:35):
And Michael, that's.
Speaker 3 (33:36):
Credit to your strategic CFO mindset. So to wrap up
this segment, what are two key action items that you'd recommend.
Speaker 5 (33:43):
So the first one is to create a customer a
customer what I call a customer expansion scorecard for your
top twenty customers. Rate each customer on a scale of
one to five for relationship satisfaction, business growth, vendor consulate
preference and budget authority.
Speaker 4 (34:03):
Focus on your.
Speaker 5 (34:04):
Initial expansion efforts on scores customer scores that are fifteen
or higher out of twenty, and this target approach will
dramatically improve your success rate compare it to generic expansion attempts.
And the second action item is to conduct strategic need
assessments with high scoring customers in.
Speaker 4 (34:24):
The next month.
Speaker 5 (34:26):
Don't approach these as sales conversation, by the way, but
as strategic discussions about their challenges and goals. Ask about
their complete ecosystem of vendors, their upcoming initiatives, and their
pain points with current service providers. These conversations will reveal
specific expansion opportunities based on real customer needs rather than
(34:50):
assumptions about what they might want. And in our next segment,
we'll explore asset leverage, asset leverage assessment, and how to
monitor your existing capabilities, relationships, and data in ways that
create new revenute streams without significant additional adjustment. So before
I continue this discussion, we're going to take a ninety
(35:13):
second break. Hey there, business owners, let me ask you something.
Are you tied of blending in with your competitors? Frustrated
with slow growth and slim margins? Well, I've got news
for you. Everything you've ever learned about growing your business
is wrong.
Speaker 4 (35:30):
But don't worry.
Speaker 5 (35:31):
I'm here to let you in on a secret weapon,
your position of market dominance. It's what sets you apart,
makes you irreplaceable, and has customers lining up at your door.
My name is Michael Barbarrita from Next Step CFO. I
know what you're thinking. Sounds great, Michael, But how do
I find my position of market dominance? Well, that's exactly
(35:53):
why we've created our game changing implementation program called Next
Step to Market Dominance in just ninety Well, guys, you
step by step to a position of market dominance by
uncovering your unique strengths that competitors can't touch. By crafting
a message that resonates deeply with your ideal customer, by
building a strategy that turns you into the go to
(36:13):
expert in your field.
Speaker 4 (36:15):
Now this is in theory.
Speaker 5 (36:17):
These are battle tests and strategies that have help businesses
like yours double, triple, and quadruple their revenue. Don't let
another quarter go by struggling to standout. It's time to
dominate your market period. Go to NEXTSTEPCFO dot net forward
slash contact.
Speaker 4 (36:34):
Fill out the form and in.
Speaker 5 (36:36):
The message section put the word dominate or call us
at seven eight one three two six three A two two.
That's next STEPCFO dot net forward slash contact or call
us at seven eight one three two six three A
two two. Welcome back to Powerful Business Strategies and remember
you can catch any replay at Powerful Business Strategies dot com.
(37:00):
So far we've covered value, inventory and customer expansion analysis.
Let's explore the third component of our revenue multiplication formula,
asset leverage assessment. And this is about finding ways to
monetize your existing capabilities relationships, and data. You see, most
businesses have valuable assets that could generate additional revenue but
(37:24):
are currently under utilized or they're not monetized at all.
And the key is recognizing these assets and developing creative
ways to extract value from them.
Speaker 4 (37:35):
So let me walk you through the.
Speaker 5 (37:38):
Five major categories of leverage assets that exist in most businesses.
First is intellectual property and expertise. Your business has developed knowledge,
processes and methodologies that could be valuable to others. This
might include proprietary systems, training materials, best practices, or even
(38:00):
specialized knowledge that you take for granted but others would
pay for. So, for example, a specially a successful restaurant
developed an exceptional employee retention system to address the industry's
notorious turnover problems. So instead of keeping this system internal,
they packaged that it's a consulting service for other restaurants,
(38:22):
and this new revenue stream generated over one hundred and
eighty grand in its first year while requiring minimal additional resources. Second,
relationships and network access. Your business sits at the intersection
of various industries, customer types, and vendor relationships. These connections
(38:43):
represent monetizable assets through formal referral programs, partnership arrangements, or
facilitated introductions. And let me give you an example. Our
commercial real estate firm realized that they regularly connected clients
with contractors, architects, interior to designers, and financial service providers,
and instead of making these referrals informally, they created a
(39:06):
trusted partner network with structured referral agreements and this generated
additional ninety five thousand dollars in annually in referral fees
while providing added value to their clients.
Speaker 4 (39:23):
Third, data and market insights.
Speaker 5 (39:26):
Your business generates valuable data about market trends, customer behavior,
industry patterns, and operational benchmarks, and this information could be
valuable to vendors, industry associations, or other businesses facing similar challenges.
Another example, a distribution company began offering anonymous market intelligence
(39:51):
reports to their suppliers, providing insights about regional demand patterns,
seasonal trends, and customer preferences. And this data was a
byproduct of their normal operations, but packaging and professionally created
new revenue stream worth one hundred and twenty thousand dollars annually. Fourth,
(40:11):
Physical assets and infrastructure your equipment, facilities or technological infrastructure
might have capacity that could be monetized during off peak
times or for complementary purposes. For example, a manufacturing company
with specialized equipment realized that they used their machinery at
(40:32):
sixty percent capacity. They began offering contract manufacturing services to
smaller companies who couldn't justify purchasing their own equipment. This
asset leverage strategy increased their revenue by twenty eight percent
while spreading fixed costs across more production volume. Fifth, brand
(40:53):
and reputation assets. Your established reputation and market position could
be leveraged to support to support new revenue streams that
benefit you from that benefit from your credibility and customer trust.
Speaker 4 (41:09):
So here's another example of that. A well regarded accounting.
Speaker 5 (41:13):
Firm leverage their reputation to offer business valuation services for
merchants and acquisitions. And while this requires some additional training,
their established credibility made them immediately competitive in this higher
margin service area.
Speaker 3 (41:29):
These are fascinating examples, Michael, but how do you How
do you advise business owners to come up with a
systematic way to identify which of their assets have the
greatest potential for generating additional revenue. I mean, would this
require shift in mindset for what constitutes a business asset?
Speaker 4 (41:50):
No, you're right, You're right. Tricky.
Speaker 5 (41:52):
See, most business owners think of assets in traditional accounting
terms like equipment, inventory, maybe even real estate. But for
revenue multiplication purposes, we need to think much more broadly
about what constitutes a valuable asset. And here's a systematic
approach for identifying your leverageable assets. First, conducted asset audit
(42:15):
across five categories. For example, ask what do we have
that others might find valuable? And for intellectual assets, inventory
you possess inventory process methodologies, training materials, proprietary knowledge and
problem solving approaches, and ask what do we do differently
(42:39):
or better than typical companies in our industry. And for
relationship assets, map your network of customers, your network of vendors,
your network of partners, and industry connections, and ask who
do we know that can benefit from knowing each other?
In other words, what introductions or connections could we facilitate.
(43:04):
So for data assets, analyze what information you collect in
the normal course of business. So what you ask is
what patterns do we see that others in our industry
would find valuable and what benchmarking or market intelligence could
we provide. And for physical assets, examine your equipment, facilities
(43:29):
and infrastructure utilization and ask what capacity do we have
that's not fully utilized and what resources could serve additional purposes. And,
by the way, I've seen many times where small businesses
want to start out, they need to find a resource
to manufacture or build, and they use the graveyard shift.
(43:52):
I've seen that many times. It happens a lot in
the banking industry too. By the way, for brand assets,
evaluate your reputation, your expertise in market position. Ask what
credibility do we have that could support new offerings and
what trust have we built that could be extended to
related services. Second, apply the external value test to each
(44:17):
identified asset. Just because you have something doesn't mean it's
valuable to others. For each ask for each potential asset,
ask what others would pay for the access to this?
Does this solve a real problem for a specific market
and is this unique or difficult for others to replicate?
And can we deliver this consistently at a profitable price.
(44:39):
Point three, prioritize assets based on monetization complexity, So Some
assets can be monetized with minimal additional investment, while others
require significant development. So start with the assets that have
immediate market demand, low implementation complexity, high margin potential, and
(45:02):
strong alignment with your core business.
Speaker 3 (45:06):
Michael, these are excellent insights. Now to wrap up this segment,
what are two of the most important action items that
you would recommend?
Speaker 5 (45:14):
Well, the first action item is to conduct a comprehensive
audit asset audit using five categories that we discussed that
was intellectual property, relationships, data, physical assets, and brand assets.
And for each category, list everything that you have that
might be valuable to others and then apply the external
(45:35):
value test to identify the most promising opportunities and focus
on assets that actually solve problems for specific markets that
can be monetized with a relatively low complexity. And the
second action item is to identify three potential partnership opportunities
where you can monetize your assets without building new operational
(45:59):
infrastructure and look for established businesses that could benefit from
your intellectual intellectual property.
Speaker 2 (46:06):
You know.
Speaker 5 (46:06):
In our closing segment, I'll explore the revenue stream integration
and how to implement new revenue streams in ways that
enhance rather than distract from your core business, and will
summarize the complete revenue multiplication formula. So, as we wrap
up today's episode on finding hitting money hidden money in
(46:27):
your existing business, let's summarize the complete revenue multiplication formula
and how all four components work together to unlock revenue opportunities.
And we began with value inventory cataloging all the value
you currently create, including value you're not charging for, and
this involves documenting every customer touch point, analyzing your team's expertise,
(46:53):
examining your business process, identifying connection opportunities, and analyzing your
data and insights. Next, we explored customer expansion analysis, systematically
identifying additional ways to serve your existing customer based profitably.
We discussed segmenting customers by potential analyzing total market opportunity,
(47:18):
mapping unmet needs, identifying natural expansion pathways, and creating compelling
offers that feel like a natural relationship evolution. We then
covered asset leverage assessment that's finding ways to monetize your
existing capabilities, your existing relationships, and your existing data. And
(47:41):
this included intellectual property, relationship networks, data insights, physical assets,
and brand reputation.
Speaker 4 (47:50):
We provided a systematic.
Speaker 5 (47:51):
Approach for identifying and prioritizing these assets based on external
value and implementation complexity. And finally, we touched on revenue
stream integration. That's implementing new revenue streams in ways that
enhance enhances rather than distract from your core business through partnerships,
(48:13):
asset light models, workflow integrations, demand testing, and clear boundaries.
You know, the power of this framework comes from recognizing
that substantial revenue opportunities already exist within your business. You
just need to acquire. You don't need to acquire new
customers enter new markets to develop entirely new capabilities. You
(48:35):
need to see and capture the value you're already creating
but not monetizing. And remember, this revenue multiplication is about
working harder. It's about working smarter by recognizing and capturing
what's hiding in plain sight. When you include this systematically,
you'll often discover that the revenue increases come more easily
(49:01):
that traditional growth strategies because you're building on existing strengths
and relationships and chifkey.
Speaker 4 (49:07):
I know we have another question from the audience, but
we're not going to be able.
Speaker 5 (49:10):
To take it unfortunately, so to get a copy of
our book, Powerful Business Strategies, simply go to our website
www dot next STEPCFO. It is totally complementary and until
next Monday at noon Eastern time for Chifkey Obio. My
name is Michael bab Rita. And remember, don't keep doing
(49:30):
what your competition is doing.
Speaker 2 (49:34):
You have been listening to Powerful Business Strategies finding out
that everything you ever learned about growing your business is wrong.
Tune in next week and every week at noon Eastern
time on W four CY Radio with your host Michael
Barbarita of Next Step CFO and moderator Chugy Obio
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