I am Yoshida, president of Yamada Shusei Ltd., a professional apparel clothing repair group in Nagaoka City, Niigata Prefecture.
What are some specific ways to increase profits without selling at a discount?
1) Pursue value-added products.
Products with high added value earn higher profits. There are many areas where added value can be found, including application development, function development, customer development, container development, design development, etc.
2) Attack niche markets.
A small market with high barriers to entry and few competitors is called a niche market. Niche markets have the advantage of being able to create a cycle of increased profits as the number of customers increases, since there is less risk of price erosion or market share shrinkage. Although it is essential to accumulate a high level of proprietary know-how to enter a niche market, if you can do so, it will be an optimal market for more stable profits.
3) Increase repeat customers.
It is a given that profits will increase as repeat customers increase, but there are two reasons why you should increase the number of repeat customers. One is that the cost of acquiring a repeat customer is a fraction of the cost of acquiring a new customer. The second is that repeat customers spend more than twice as much per purchase as new customers. In other words, repeat customers continue to make purchases for a small cost, and yet the amount of money spent per purchase is high. Strategies to increase repeat customers include offering discounts for bulk purchases and subscriptions.
4) Disseminate information.
There are many small businesses that, despite offering good products, fail to make a dent. In order for these small businesses to increase their profits, it is essential that they disseminate information thoroughly. This is because brand image, which determines customer creation (profit creation), is formed through information dissemination. Without actively communicating information that raises the added value of the products and services offered, such as the value of work, the value of products, etc., and not just a company or product overview, "good things" will not be communicated to third parties. Not many small and medium-sized companies focus on information strategy, but information has the effect of increasing corporate value and boosting profits.
I believe that all of these methods are practicable, but then what about me? I would like to make decisions for improvement while asking myself, "What will I do?”
