Increase Throughput -- Increase Sales

Continuing our cash velocity discussion started on March 16, 2007

Increase Sales

Increasing sales is a sure fire way to increase your throughput and is theoretically limitless. My first question is: Are you selling all that you can now? If you are a “make to stock” company, do you ever have the case where you don’t have the product your customer is looking for in stock? If so, you could benefit from DBR Scheduling and Demand Pull to ensure that you always have what your customers demand.

But, let’s say that you have already implemented DBR Scheduling and Demand Pull, and you currently can provide what they want on time. To increase sales you must learn and met your customer’s business NEEDS. New customers are earned over time by understanding the business needs that they have, then customizing your products, services, or policies to meet those needs. In TOC we call this creating a mafia offer. Market Segmentation will be a likely result of matching your offerings with your customers or potential customer’s perception of value. All that being said, sometimes business owners already know that they could earn more business from existing customers or know where that can find new customers. What stops them is cash. To grow sales takes cash and to grow sales a lot takes a lot of cash. So how do you increase your throughput without going into cash trouble?

... to be continued ...

Here's to maximizing YOUR profits!
"Dr Lisa" Lang
(c)Copyright 2007, Dr Lisa, Inc. All rights reserved.

Increasing Throughput -- Increase Selling Prices

Continuing our cash velocity discussion started on March 16, 2007

Increase Selling Prices

Changing the selling price for a product or group of products is difficult to cover in few words. Presumably you already have pricing policies and strategy that represent some equilibrium point in the market you serve and getting some minimum T/CU across your mix of products/services. If you understand the perceived value by your customers for the products/services you offer, then to increase prices you must stay within this perceived value or increase your customer’s perception of value. A mafia offer[1] is the Theory of Constraints (TOC) method to increase your customer’s perception of value even in industries considered to be commodities.

In addition, Market Segmentation should be considered. Identify segments of markets that have different values for the products and services you offer, then set selling prices for these markets that are consistent with their perception of value and your mafia offer. Segmentation should help you to match selling price with customer’s perception of value and allow you to maximize your selling price while ensuring that you’re meeting your customer's needs.

[1] We will discuss more about mafia offer in #1 below. Also, see http://www.mafiaoffers.com/ for more information on creating a mafia offer.

... to be continued ...

Here's to maximizing YOUR profits!
"Dr Lisa" Lang
(c)Copyright 2007, Dr Lisa, Inc. All rights reserved.