by Jay Abraham
12 Ways Mid-Size Companies Are Doubling
Their Profits Without Additional Risk or Cost,
Even in Challenging Times Like These
“My friend, mentor and advisor Jay Abraham has generated
more than $21 billion in combined additional profits for thousands
of businesses worldwide in hundreds of different industries.
“Forbes says he’s ‘the real thing’ when it comes to turning ‘underperforming
companies into marketing and sales whizzes.’ And I couldn’t agree more.”
FUBU Investor on ABC Television Series Shark Tank
M
ay I help you take
“dead aim” at
maximizing your
profit-generating activities—
with the potential to double
and even possibly re-double
your profits?
Because it’s my contention
that the effectiveness of almost
everything you do to produce
sales and profits can be rapidly
multiplied—with no significant I’ve seen these methods
additional investment or risk on rejuvenate business and
your part.
Like many companies I’ve
worked with, it may be possible recessions, and right up to
for you to achieve transformative what’s going on today.
results by embracing the cutting-
edge science of “profit system
optimization”—generating the
highest current (and future)
revenue and profit from the
human, financial, and other
resources at your disposal.
And some of these resources powerful.
may be ones you never
considered leveraging.
The Only 3 Ways to
Grow a Business
Most companies try to grow
by adding more customers.
But that’s just one of the three
ways to grow a business, which
are:
1) Increase the number
of customers
2) Increase average amount
of sale
3) Increase purchase
frequency
And in many ways, adding
customers is the hardest of the
three.
Instead if you increase all three comes from outside one’s own
by just 10%, it adds up to 33.3%
more revenue (and a lot more
profits).
The “extra” 3.3% comes
from the exponential power of
compounding: the 10% more
customers who are buying
10% more 10% more often.
(Just like compound interest
increases money growth because
it pays interest on the interest it
generates.)
But here’s where it gets
truly eye-opening…
Over time, if you double
each one (number of customers,
average sale and frequency)
that exponential compounding
yields an astonishing 700%
gain—increasing revenues
8 times over.
Along with a massive profit
increase.
— Daymond John, Founder and CEO,
Why “Best practices”
drain profits
What follows is based
on my work in more than
1,000 industries around the
world—including all types of
manufacturers, retailers, and
service businesses, from
high-tech to no tech, from
local to global.
For the past four decades,
unleash their full sales and
profit potential—during booms,
In fact, with all the changes
and disruption happening
right now, I believe there
has never been a time when
these techniques have been
more needed, and their
transformational potential more
But first, you should know
that these methods are all the
product of patient, methodical
examination, exploration, and
exploitation of nearly 100
performance dynamics and
upside leverage “impact” points
which few CEOs utilize.
There’s no magic about it. It’s
science, not art—merely simple
optionality, variability, fulcrums
and levers creatively applied,
derived from a vast range of
different industries.
This is why, to me, the concept
of “best practices” is flawed: it
so often limits innovation and
optimization to what is already
being done within an industry.
But real explosive, exponential
growth almost ALWAYS
industry—where few ever look.
Why there is little or no
extra investment or risk
Few people truly understand
the enormous power of variability.
Even though it affects everything
they do every minute of their
lives.
Doing something one way
produces X result. Doing it
another way produces Y result. In
business, that “Y” result can yield
multiple times more profit—often
at little or no additional cost.
For example, say something
one way to prospective buyers—
in person, on the phone or
online—and it converts a certain
number
of buyers.
Simply changing what you
say and how you say it
can increase that number
significantly—often by multiples.
I’ve seen how starting a
conversion process differently
was able to quintuple sales closes.
And I’ve seen changing variables
increase the average unit sale,
leading to a huge increase in
profits.
I’ve seen different proof
elements, comparisons or
guarantees each multiply sales
another 25% to 150%.
And I assure you there are
literally hundreds of such leverage
points in your advertising,
marketing, and sales processes—
and even in your distribution and
management processes.
By the way, one way to add
profits to your bottom line and
save money is to stop paying for
leads and advertising—and start
paying only for results.
Before you say “that would
never work in my business,”
consider that I’ve tested and
applied this concept countless
times, and turned literally
thousands of skeptical CEOs into
believers on this.
(Yes, I put my money where
my mouth is: my fees are based
on a percentage of profit increases.
I believe that speaks volumes
about my confidence in these
ideas and strategies.)
My magnificent
obsession
I have been obsessed with the
power of maximizing resources
since I was first introduced to the
power of variability years ago,
when I consulted for the Deming
organization.
W. Edwards Deming is the
father of process improvement
methodology and an evangelist
for the power of optimization to
transform companies.
I then worked with the nation’s
largest multivariable testing firm,
where I was privy to half a billion
dollars’ worth of advertising and
sales testing.
They tested what was said,
how it was said, and when it was
said. They tested right down to
variations in retail merchandising,
shelving, and aisle placement.
Once, for a large furniture
store, we tested 33 ways of
greeting someone at the front
door—and found a change that
tripled sales.
Replacing a headline in an ad
for a brokerage house in The Wall
Street Journal quintupled their
business. Reducing the number
of choices for a baking product
doubled sales.
I also saw how a simple
addition to a product’s
usage directions quadrupled
consumption (while actually
improving the product’s
performance).
What I learned
in court
I worked with the nation’s
leading strategic litigation
consulting firm, where hundreds
of millions in potential damage
awards was often at stake.
They employed 150 PhD
sociologists and psychologists to
test the effects of variations in jury
selection, cultural and political
attitudes, venue, descriptions of
pain and suffering, and even in
types of visual aids.
I learned what it really means
to “make a case airtight” and
translate that to a persuasion
strategy.
I collaborated with the
world’s leading authority on
Six Sigma, and discovered the
enormous savings available
simply by uncovering flaws and
inefficiencies in design, processes,
procedures and systems.
If there are hidden profit
opportunities waiting to be
unlocked in a business, chances
are I’ve already found the key
from my work in the thousands
of companies and hundreds of
different industries.
The difference can
be profound
Today my passion is
finding ways to exploit the
profound and exponential
difference between doing things
one way and another.
The process usually starts
with relentlessly searching out
the most impactful points of
superior differentiation between a
company’s products and those of
their competitors’—a critical step
too many companies overlook or
do in a superficial way.
Together, we then find
solutions, opportunities
and alternatives that create
impenetrable “moat positions”
that ward off the competition.
For many companies, a key
leverage point is the power of risk
reduction.
There is tremendous power
in making it orders of magnitude
easier for prospects to say “YES”
rather than “no” by lowering how
much risk prospects perceive
they are taking.
That’s how Domino’s
rocketed to the top of the pizza
business (“delivered in 30
minutes or it’s free”) and FedEx
revolutionized package delivery
(the implied guarantee of “when
it absolutely, positively has to be
there overnight”).
I’ve personally seen strategic
use of risk reversal as much as
quadruple conversion and closing
rates.
But harnessing and directing
such power is impossible without
ongoing and systematic testing
of alternative approaches,
possibilities, enhancements, and
suppositions.
This is how a company
can gain a preemptive (and
preeminent) advantage utilizing
psychological, comparative,
contrasting, and correlating
mechanisms that few marketers
or sales managers know exist—
and fewer utilize.
How a penny can
instantly increase
profits 20%
When it comes to lead
generating and conversion, it’s
often the most counter¬intuitive
change that produces the greatest
increases in ROI.
For example, I’ve seen $19
outperform $15 by 300%... $69
outperform $39 by double.
But I’ve also seen the
opposite. Another client tested
$4,995 versus $5,000 and saw a
125% increase. For another, $69
outpulled $89 five times over.
Another reason why testing is
a must.
One thing I love about pricing
is the power of a small increase.
For example, take a $100
million company that makes 5%
on that gross revenue.
If they raise their price by
1%, that yields an extra million
in profit—an instant 20% profit
increase.
The ROI of “big ideas”
There is a phenomenal power
in putting sales and marketing
muscle behind truly big, yet
disarmingly simple, ideas.
One of my most profitable
big ideas was for a pain-relief
gel you may have heard of called
IcyHot.
When they were first starting
out, they came to me for advice.
I studied their numbers
carefully and advised something
I recommend to many companies
I work with:
Stop thinking of advertising
as an expense, and think of it
instead as an investment.
I proposed they stop trying to
save money on advertising and
instead helped them strategically
arrange their marketing so they
could spend more money on
advertising.
What an amazing competitive
advantage that turned out to be.
By focusing on optimizing
repurchases and ultimate
customer value, they were able
to send ROI soaring by almost
20,000%, and add 500,000 new
customers and a zero to their
valuation.
Their competition didn’t
know what hit them.
Why it can be so easy
to increase sales
and profits
I love getting a client more
customers.
But I really love selling more
product or service to current
customers—because that is such
a quick and easy profit win.
And I’m not just talking about
PROFITS
selling more existing products
to them or even adding new
products.
I show companies how to
generate profits in many different
ways, including affiliate deals,
joint ventures, endorsed mailings,
and monetizing their customer
and prospect databases in
innovative and lucrative ways.
Shocking as it may sound,
I’ve shown some companies how
to work with their competitors to
sell their products or services (or
vice versa), and even to exchange
unconverted leads.
Because nothing should be
a “one-shot,” I help companies
constantly increase customer
lifetime value from as many
leverage points as possible.
Still, additional sales is only
one of more than 30 distinct
profit performance enhancements
possible within almost any
company—each with the
potential to produce jaw-dropping
bottom-line increases.
And none require significant
investment or risk.
While no company can apply
all of them, any one of them
has the potential to produce
significant increases in sales
and profits.
The amazing power
of a “Power Pivot”
Power pivoting can transform
a company.
And in a rapidly evolving
competitive environment such as
we see today, a company’s very
survival may depend on pivots
that enable them to do much
more with limited resources.
Yet so many companies are
unknowingly stuck in habitual
ways of doing things, looking at
things, getting and converting
customers, and making money.
I urge you to spend a little
time just thinking about how you
might be able to optimize and
maximize sales and profits by
thinking differently about how
you can shift directions with one
or more of the nine different
types of pivots:
1. Strategy pivot
2. Business model pivot
3. Marketing approach pivot
(especially “divide and con- distribution channels, and new
quer through segmentation”)
4. Capital pivot (financial and
human)
5. Leveraging relationships and power partnerships alone,
pivot
6. Distribution channels pivot
7. Product pivot
8. Revenue model pivot
9. Ideology pivot (changing key influencers, organizations,
your thinking may be the most platforms and media outlets.
powerful pivot of all)
The pivot doesn’t need to
be huge or all-encompassing to
dramatic affect your profits.
Often all it takes is a slight shift
from what you’ve habitually
been doing.
The Power Pivot
Difference
Exponential
Growth
Linear
Growth
A small pivot can make a BIG
difference.
Are you
“successfully stuck”?
Many CEOs are so busy
trying to increase top line
revenue that they overlook the
quick and easy ways to directly
influence bottom line profits.
And so they settle for
incremental performance
improvements—happy if a
number is just a bit higher this
year than last year.
“Inch by inch it’s a cinch”
seems to be their motto. Inch
by inch sounds more like a
crawl to me.
Four decades working
with every type of company
imaginable has convinced me
that so much more is possible—
often from the same resources,
time and effort companies are
already expending.
Now my fervent hope for
you is that you’ll no longer be
satisfied with incremental profit
growth, and use some of these
Power Pivot techniques to go
beyond the small tweaks and
tiny profit increases so many
companies settle for these days.
In short, I want you to
achieve the exponential profit
expansion your company may
well be capable of.
Where are the hidden profits
in your business?
For many companies, the
quickest way to unearth hidden
profits is to simply maximize the
utility of existing resources (for
example, isolating, modeling
and replicating company-wide
the most effective strategies,
tactics, systems and practices
of your best-performing
salespeople, distributors,
franchisees, teams, and so on).
For other companies, the
hidden profits are found in
identifying and capitalizing
on new opportunities, new
sales and income sources.
For example, to structure
strategic alliances, joint ventures
I have developed 43 strategies
that enable companies to utilize
the access, credibility and trust
of other companies, competitors,
“You are surrounded by
simple, obvious solutions
that can dramatically
increase your income,
power, influence and
success. The problem is,
you just don’t see them.”
Time after time this produces
significant streams of newfound
and highly sustainable revenue—
the only cost often being a small
percentage of the results these
collaborations deliver.
Should we talk?
Maybe. Maybe not...
These days, I spend a lot of
my time speaking, thinking and
writing.
But every year I work
directly with a few carefully
selected clients looking to do
those small pivots that can have
a transformative effect on their
businesses and their profits.
Some come with problems
that need solving. Others with
opportunities to be seized upon.
And, of course, many come
with both.
They are companies with
sales of between $15 million and
$250 million.
Such companies are big
enough to fully benefit from these
optimization techniques, yet
small enough to still be nimble in
implementation.
Of course, as you might
imagine, they are also companies
that are open to new ideas and
new ways of thinking.
(Fortunately, if it’s
conventional wisdom you’re
after, there’s plenty of it out there
for the taking.)
But if you are willing to be
open-minded in exchange for far
bigger rewards then we should
probably have a conversation.
Of course, I can’t guarantee
we’ll be a good fit together. But
if you qualify, I look forward to
at least exploring how I might be
able to help your business reach
its true potential.