The expression “Leaving money on the table” is an idiom which means not getting as much money as you could. But what does that have to do with technology? Everything. If I told you that by spending $300/month, you would generate $100/month of extra income would you use it? Probably not. But what if I went on to add that you would get more repeat business and also attract new customers and in 14 months it could start making you an extra $1000/month. Well now you would probably be more interested because you would see how that technology has added value to your business. But the problem I see time and time again is that businesses do not want to invest in technology that could grow their business, because they see it as an expense and don’t see the money it could bring in. I’m going to dive into the money you’re leaving on the table and list a few ways to fix it.
The first mistake people make is looking at technology as an expense. I will be the first to admit that technology executed poorly will result in it being an expense. But leveraging technology to grow your business will make or save you money, which like the expression goes, “A penny saved is a penny earned.” So what are some ways that technology make you money:
- Improve Efficiency – This can mean a number of different things, but the most common is to simplify complicated processes to reduce the amount of training required and also increase accuracy to avoid making costly mistakes.
- Identify / Prevent Loss – Putting technology in place to monitor resources and transactions can better help you identify loss and help you make the necessary changes to fix it. Putting technology in place to prevent loss to either minimize downtime , decrease shrinkage, or any other loss your company could face.
- New Customers – The right technology to get new customers heavily depends on your market. Determine what value and information potential customers would be looking for and make sure you have it everywhere they’re looking. You will want to make sure that you are delivering a clear message to the right people.
- Repeat Customers – Using technology the correct way will help you increase the chances of getting customers to come back. This might be a loyalty system, notification system or something completely different. But the end goal is to bring people back that have already interacted with your company.
Depending on your approach, this can be difficult but to keep things simple I will use an example of a lawyer’s office. If you run a law firm and you are thinking about a new website, some of the things to consider is what could that website generate in extra income and is there money that could be saved.
So to measure money earned, you have to know what your typical profit is made off a new customer. So say that a new client on average will spend $100/month for your services. You find out that it will cost you $2000/year to build and maintain your website and about $1000/year for online advertising which brings your yearly cost to about $3000. After careful and conservative review you figure that the website should generate about 4 new customers (1 / week) and 1 from each month will return the next month. At those calculations you would make an extra $10,525. Subtract your costs for the website ($3000) and you would make a net profit of approximately $7,525.
So using all the same numbers from above, we will also add that each new customer takes about 30 minutes worth of time to get their account established and ready for billing. Now you normally have someone speak to the customer to gather this information. So to keep the math simple we will say with the wage and other expenses (power, internet, phone, etc) that it costs you approximately $25/hour for getting that information. Since it takes about 30 minutes per new customer it costs you $12.50/customer (not bad). However since you added a form on your website to collect this information, you won’t have to increase the workload of yourself or your employee, which will save you $50/month in cost. So now you are saving $600/year in added expenses.
There are a number of different ways that a great website can save you money, but to keep this article to the point I’m just going to use that.
So what’s being left on the table?
I know it’s a lot of math and I hope I didn’t make it confusing, but if you followed along, the money you would be making back in a $3000 investment would be a return of $8,125/year of money that would have been normally left on the table. Now this isn’t even accounting for the continued growth and other things you can implement to have technology add value.
Well the fix can mean hundreds of different things, because each business and industry is completely different. Your needs may not even match the same needs as your competitor. The best way is to hire a company like us that offers technology consulting. The process is very simple and straightforward. We ask you questions to determine what you currently use for technology, issues your business is facing and look at aligning the right technology to solve your problems. We do offer a complimentary consultation for all our new clients. You can call me directly at 641-210-9597 to schedule yours. I hope this article has helped you in some way and I look forward to helping you grow!