In the bid to grow and expand quickly, some businesses trade profitability for growth.
“Let us reduce our margins so we can get into MORE stores.”
“Let us reduce our price so we can get MORE customers.”
“It is better for 1,000 people to buy this product than just the 100 people currently buying.
More people = We are now a National brand.”
The above are some of the flawed statements
that we make daily and it is very heartbreaking.
Now, let’s do the maths from a profit standpoint.
Your 1,000 people are buying at N20 profit per
product, the 100 people are buying at N100 profit.
So you marketed hard, hustled to get 1,000 people, sold to
them, followed up, stretched your resources for that?.
Are you sure your more will come with reduced profit?
There is absolutely nothing wrong with running a Volume based
business if that is the original business model but turning a value business
into a volume business with the hopes of getting rewards in more customers is a
faulty business strategy that can spell doom for your business.