Double Your Profits
In Six Months or Less
Bob Fifer
“We can’t afford it.” That felt like a punch in the stomach. It’s a sentence, when spoken by one’s CEO or manager, that everyone dreads. It happened 15 years ago, and I remember the experience like yesterday. I was new to management. I had constructed an impassioned argument on why we needed to hire a full-time Internet Marketing Manager. I explained that I wasn’t able to both sell and manage the contracts we closed, and that my time was already spread thin overseeing our new development projects. My CEO asked, “How much time is spent selling and managing the new marketing contracts, and how much time is spent with new development projects?” I took a guess. He asked how I landed on the numbers. Crickets. My guesses didn’t convenience him, and I was stuck with the overload.
Soon after that conversation, I redesigned how we managed projects, accounted for expenses, and justified team additions or subtractions, among other things. Since all those years ago, I have continually looked for ways to clarify expenses, improve operations, and increase profits.
In a Marketing Secrets podcast episode, Rusell Brunson had recommended the book, Double Your Profits: In Six Months or Less, by Bob Fifer. It’s written for anyone who’s looking to improve the management of their businesses. Brunson mentioned how the book was a quick read (it is) with easy to apply strategies (they are). Below are a few key takeaways.
- This book was not written for small businesses. Or solopreneurs. The principles are based upon Bob Fifer’s experience working with the Fortune 500s. That’s not to say you won’t find some gems to apply in your small business, but most aren’t applicable.
- Some of the strategies are myopic and self-serving. Granted, the book was published a couple decades ago. You, like me, may find a sweet spot tempering some of the heavy handed recommendations.
- Fifer provides simple instructions and examples to execute. There’s no guessing on how to implement: they truly are plug-and-play. If you can muster the courage, that is.
Page: 28
“We will outspend our competition for strategic costs, and spend this money in good times as well as bad.”
> A core principle is splitting your costs into two primary buckets: strategic and non-strategic. Those that generate or fulfil sales and those that don’t.
“2. We will ruthlessly cut non-strategic costs to the bone.”
> Many of Fifer’s recommendations are to cut non-strategic costs by whatever means necessary. More on that below.
Page: 41
Forcing yourself to separate out the differentiation the customer is willing to pay for from “it’s-nice-to-have-but-I-won’t-pay-for-it” is what is best for your customer, you, and your bottom line.
> Positioning strategies are popular enough. “It’s better to be different than better”. However, Fifer makes the point that while many marketers are dedicated to differentiating products and services, few are focused on reducing costs for those same differentiators.
Page: 42
Strategic time is defined as anything you do that produces profits. • Non-strategic time is defined as that which is busy and succumbs to the requirements of processes, but which does not contribute to profits.
> This is the overall theme of the book: Spend more time on strategic tasks and less on non-strategic.
Page: 49
Create and maintain a strong sense of urgency in your business, and it will pay you back a thousand times in the increased focus and productivity of everyone in the organization.
> I love this excerpt. As leaders, we all need to have a fire in our belly. That drive will permeate through departments, partners, and all the other people around you, radiating energy like the sun.
Page: 62
Instead, we set a budget based on our experience and judgment, and let the supervisors react. If we cut too low (in this case, we didn’t), we would have heard about it and ultimately would have added back to the budget.
> Rather than ask your reports where they can cut, execute a budget cut (e.g. 20-40%) and make them figure out where to reduce. Brutal, but effective.
Page: 82
Every price increase you accept for any item without a competitive bid is wasted money. (Try announcing to your suppliers that every price increase triggers an automatic, serious competitive bid. You will instantly start receiving only half as many price increases.) For every important or even semi-important item, do one of two things a minimum of once a year: either conduct a truly competitive, aggressive price bid, or, if that’s too much trouble, just tell your suppliers that you’re doing it. It works almost as well.
> Fifer provides several examples on how to squeeze lower prices from partners and vendors. Scare tactics may be effective, but they may also sour the relationship. I’d rather not have people spitting in my sandwich behind closed doors. I personally opt for less torque and more tact. Especially in the small town where I live. If you burn too many bridges, you’re left all alone.
Page: 123
Parkinson, who coined the phrase, “Work expands to fill the time available,” also came up with a second law: “Work expands to occupy all the people available.”
> One company I worked for had a couple designers dedicated to making simple logos for clients. Whenever they had double or triple the number of logos to create, they’d create them. In months when there were fewer, the logos would take longer, but weren’t any better than the months where there were more. We decided to eliminate one designer. Nothing changed. The logos were still getting done. Same quality. The designers would expand and contract time to match demand. Eventually, we eliminated the other designer and outsourced the logos. All said, we saved hundreds of thousands of dollars a year.
Page: 132
One of my first mentors told me, “If you don’t want to give someone a raise, give them a fancier title. It’s often at least as appreciated and a heck of a lot cheaper.”
> For many, titles are like a badge of honor. I never cared about titles. But I learned, over time, that many of my team did. In reviews, when we upgraded compensation, we’d typically upgraded their title too. I know some would go home and mention the raise to their wife, but they would also mention the increased responsibility of the title.
Page: 147
Part of the problem is a misplaced desire for precision. The vast majority of business decisions are made, as they should be, based on instinct, judgment, and rough numbers. It is a rare decision that requires the precise, detailed stacks and stacks of pages that the cost accountants produce.
> It’s rare you’ll ever get to know 100% of the situation through analysis. You have to be comfortable getting 90%, 80%, or 70% before pulling the trigger.
Page: 160
First of all, when I walk into a prospective client’s office, the first thing I do is look at the pictures in the room, usually of spouse and children, and ask the client about those people. There are usually clues in the picture — a school shirt, a tennis racket — that tell you the children’s interests and serve as a good starting point for a conversation. Since I became a father, I’ve become a much better salesman, because I better understand the joys and anxieties that many of my clients feel as parents and can form a better bond with them in that initial conversation when I walk into the room.
> I don’t care for personal discussion. I like to get right down to business. I learned over the years that my preference is in the minority. I adopted Fifer’s example above years ago, but stumble occasionally. A long-time client of ours mentioned his daughter’s upcoming play. I knew this client for years, and he’d mentioned his daughter’s name many times. I asked him how “Sam” did at her recital. His daughter’s name was Alexi. Whoops. Now I write down names and other details in my CRM.
Page: 160
Other things in the office are invitations to show your empathy with the client: a memento from a sporting event or team, a company award or group picture, an unusual piece of art.
> A couple years ago, we met with a client at their office. I remember being acutely aware of the angling pictures in the hallway, leading up to the conference room. Upon entering, I noticed a huge swordfish, like as wide as my arms could stretch. It was mounted on the front wall of the meeting room. I thought, this guy must be into fishing. When I brought it up, I was wrong. He wasn’t into fishing. It turns out he bought the decorations from the previous owner of the building. Oh well, it was worth a shot.
Page: 161
More substantively, beyond this initial conversation, always remember that you are selling to a person, not a company. Always get them to tell you the real reason they want to buy the product or service you are offering, not the rational, on-paper reason, which is rarely the real reason.
> Getting to that core reason is sometimes like peeling an onion. It may take asking questions in different ways, but once you know, it will be the North star of your sales journey with that prospect.
Page: 169
You must make it clear that you don’t need them. To say it another way, you sell by making yourself scarce.
> Easy to understand. Hard for me to implement. Some people make themselves scarce as a sales tactic. I hate that. It’s gimmicky. I respect the person who manages their time well and has availability more than someone who is booked out for weeks. Sure, some people are that busy, but most aren’t.
Page: 170
The point of the story is not to avoid weekend travel—that’s up to you. The point is that, once they know how good you are, showing them that you don’t really need them is a very powerful aphrodisiac. They think, “If he’s that independent, he must be really good. But I’ll be damned if I’m going to let him win. I’m going to win. I’m going to hire him, whether he likes it or not.”
> Again, scarcity is a powerful psychological tactic, but I like to give more credit to my prospects and clients. They’ll know you’re good without having to appear scarce.
Page: 171
Scarcity creates its own demand. Availability creates its own ambivalence (“Why is she so available? Doesn’t anyone else want to hire her? Am I a fool for doing so?”)
> Like much in this book, there’s a gray area. The example Fifer mentions is a story with a junior member of his team who’s schedule was wide open. Never say, “anytime works for me.” Provide specific days or times. Personally, I don’t like to say I’m too busy to appear “in demand.”
Page: 174
Show your fundamental competence. 2. Show that you empathize with the customer personally. 3. Stand in front of a truck for the customer. 4. Make yourself scarce. 5. Use guilt to transform your personal interest in him or her into his or her personal obligation to you.
> A brief summary of the chapter.
Page: 179
Sell the hole, not the drill. Anyone can make a drill. Only an enlightened, good salesperson can sell a hole well. Sell the hole, and you’ll have more customers, and higher prices.
> I’m not sure if Fifer popularized this analogy, but it’s pure gold.
Page: 185
One of the ways I ask and answer these questions is by reflecting on my purchases (or non-purchases) from various providers of products and services. Why did I choose that real estate agent or architect? Why did I reject that other one even though he was obviously more qualified on paper? What about that store display or TV ad caused me to make that impulse purchase? What was it in the way the sales clerk acted that caused me to walk out of that store empty-handed even though I walked in intending to buy something? Every time I ask and answer one of these questions, I learn something about how to sell that I then apply to my own business.
> I love this gem of wisdom. I often think back on some of the best sales people I’ve purchased from. They were upbeat, positive, eager and great listeners. They mastered the art of asking questions that made me feel like they cared. And they removed all obstacles in the sales process. I model their behaviours for my own sales process.
Page: 188
If you convey 100% confidence, your customer will be reasonably assured. If you display 99.9% confidence, he or she will be very, very worried. Like a shark smelling blood, the customer can detect the slightest doubt you are feeling and mentally will magnify it a hundred times. Your chance of making the sale just went way, way down.
> Another great analogy.
Page: 192
I have a written response or proposal out the same day or the next day by overnight express. I have been told scores of times, “I can’t believe how quickly you responded. That tells me something about the service I can expect from you down the road.”
> Love this strategy. It goes back to an earlier point about drive and urgency.
Page: 192
Whatever your selling process is like, it is crucial that you: • Respond very quickly; • Respond very professionally; • Make sure every communication that the customer receives during the selling process is of very high quality; • Communicate in a variety of ways your flexibility and your willingness to do whatever it takes to meet the customers’ needs.
> We should all already be doing this.
Page: 193
A customer who hasn’t hired you before has only one thing to base that judgement upon: what he or she sees of you in the sales process.
> Sadly, more often than not, the sales process is amazing and the service subpar. These organizations master how they sell, but fail miserably on delivery.
Page: 193
The sales process is your best chance to show the customer what you can do. Treat it that way.
> But make sure your delivery aligns with your sales process. And overdeliver what your promise. Always.
Page: 198
The psychological need to place ourselves in the orbit of attractive people is well known by the professionals. Attractiveness means charisma, manners, a likeable personality. It means a sense of humor and a well-proportioned interest in current and world events. It means being a good listener and someone easy to listen to. And, yes, it means dressing well and appropriately, keeping in shape, and being properly groomed.
> Neuroscience studies show that we’re more likely to buy from attractive people.
Page: 199
People who ask for more get more.
Page: 205
Here’s a simple procedure to apply which will identify considerable profit opportunity for you. List your largest twenty customers. (If you sell a mass-market consumer product, do this either for the twenty largest retailers or distributors you sell to or, if you wish to do it at the consumer level, the largest customer segments you sell to.) Now, for each customer ask yourself, “If I raised the price 2%, would I truly lose the customer?” If the answer is no, then try 5%, 8%, 12%, and 15%. If you answer the questions accurately and honestly, you will find that there are some customers that cannot take a price increase but others that can take 2, 5, 8, 12, or 15%. Unless you’re doing this already, this opportunity to increase price is waiting for you, because there is not a sales force in the world that, left to its own devices, will price maximize. They are too intent on booking the sale and may tell you, “What’s 2 or 5 or 8 percent, anyway? It’s trivial.” The answer is that, for a business with a margin of 10 or 15 or even 25%, price increases of that magnitude have a huge impact on profits.
> A smart process to execute annually. At my last company, we raised prices when sales dried up in an effort to keep the ship afloat twice in the 10+ years I worked there. We raised prices 20-50%, for some clients. Sometimes we’d lose a few clients, but we always made up for their losses with the increases from other clients who remained.
Page: 211
One approach is to state ranges and let the customer respond. “I’ve seen a project like this done for $50,000, $100,000, and $200,000, depending on level of detail. So as not to waste my time or yours, give me some sense of what level fits your budget.” Usually the response is in the following form: “We can spend a lot more than fifty, but not quite a hundred.” You’ve now gone a long way to knowing what the customer wants to pay: Maybe $80,000, maybe $95,000. You can refine this further by coming back with a narrower range (eighty to ninety-five), and letting them react, or by first selling an $80,000 product and then trying to get them to trade up by offering additional options totalling $15,000.
> A powerful strategy to repel tire kickers and those who can’t afford your services.
Page: 213
Never underestimate the power of a direct question. If you ask someone something directly and in a determined voice, the majority of people will feel compelled to answer and answer honestly.
> Again, circles back around to urgency and drive.
Page: 213
Silence can be an enormously powerful negotiating tool. Remember this negotiating rule: “Once the price is named, whoever speaks next loses the negotiation.” When you ask for a price, the customer may hem or haw or be uncertain. Just stay quiet. Avoid your temptation to help the customer out of an awkward situation. Don’t say a word. Your silence demonstrates your confidence and resolve. More important, silence is a void that has to be filled. If you stay quiet, the customer eventually—after ten or twenty or thirty seconds—will get around to naming a price.
> Of the hundreds of clients I have dealt with, only one made me uncomfortable during negotiations. He was a master of silence. I couldn’t take it. I’d provide the price, and he’d clam up. It seemed like minutes. I remember one time I actually asked if he was still there, and laughed, nervously when he said “Yes.” I’m not proud of this, but we used to raise the quote before negotiating with him because he’d always whittle us down.
Page: 218
One way I achieve this is by saying, “Based on everything we’ve discussed, I think the price should be between twenty and thirty thousand dollars. I’ll do it for twenty if you really want because I want your business, but if I were you, I’d pay thirty. The extra value will definitely be worth it.” There are several possible customer responses to this, but none of them is a simple no—you’ve kept yourself alive, and you’re getting the highest price you possibly can.
> I had to read this a few times. The context, I assume, is if they choose the lower price, they miss out on added value. E.g. reduced scope. Elegant.
Page: 224
Marketing dollars are strategic, and strategic costs are the long-term lifeblood of the business. Marketing expenditures must be maintained in good times and bad. Cut everywhere else, but never cut marketing dollars when times are bad.
> Being in marketing, I couldn’t agree more. In fact, we wrote an article on the subject.
Page: 225
Do the math for your business, and figure out how wide a shotgun pattern will pay for itself. My company sends ten thousand pieces of (marketing) mail a month, and 99.9% are thrown away. However, the 0.1% that produces new customers more than pays for the other 99.9%.
> Context is key here. When hunting duck, buckshot is essential. Doesn’t work so well when hunting deer.
Page: 226
Most, but certainly not all, businesses make this mistake. If you’ve got something worthwhile to sell, leverage it by looking to sell it to as many geographies, channels, and types of customers as profitably possible.
> Yes. Go everywhere your audience is. Repetition is required for memorization.
Page: 236
Instead, he said simply, “I’m stubborn.” “You’re what?” I asked. “I’m stubborn. I know what I want to achieve. I see a way to get there, and I believe in that way. And nothing or no one is going to stop me from getting there, no matter what they do or say.”
> There are varying degrees of stubbornness. I think the crux to Fifer’s idea is to be stubborn in your vision, but be open to learning.
Page: 236
The stubbornness and determination these two spoke of is characteristic of all the successful business-people I know. They don’t take no for an answer, but instead stick to it and wear their uncooperative adversaries down. They have a can-do attitude that says there’s a way around or over every barrier, no matter how daunting. They are so confident in their beliefs that they don’t even entertain the thought of letting someone else stop them from achieving their goals.
Page: 239
The person who lives and dies for work has trouble taking it as a game, because it’s his or her life. The balance and trading off that are required are then hard to come by. The player becomes too obvious, too one-dimensional, too crude. The sense of detachment that a more important life outside work gives you allows you the confidence, the calmness, the clarity of thought that makes you a truly winning player.
> Love the last sentence. Many sources of inspiration, and sometimes solutions, come to us outside of work.
Page: 239
may be the world’s greatest rationalization (and if so, more power to us!), but I’ve found that the greater priority you place on things in your life other than business, the more money you make. If you get paid by the hour, this isn’t true. If you get paid to be a profit-maximizing entrepreneur or manager, it is.
> This has been a difficult concept for me to adopt. My priorities in life are health, family, work. And sometimes work edges it way up before family. Rarely before health. It’s good advice, and I need to follow it more often.
Excerpted without permission. Buy from Amazon.