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Technology can be a profit center for you

Written by: Larry Mandelberg

Article Overview: For too many years technology has been used to solve problems that don't exist. Finally there are ways to turn an IT department from a cost center into a profit center. Technology can work for you and your business and can create hundreds of thousands, if not millions of additional dollars in revenue with little or no additional cost. This article provides some concrete B2B and B2C examples and one case study.

Technology can be a profit center for you

Our world is filled with technology. From TiVo to talking cars we are more connected technologically now than we ever have been. Working barefoot on the beach is no longer just an ad on television. With all the power and flexibility we have at our fingertips, why do so many businesses see technology as a cost center instead of a profit center?

Technology is not a silver bullet or a magic pill that transforms the world into a simple, easy place to have fun and make money. Technology is nothing more than metal, plastic, wires and electricity. Technology requires participation.

Without human creativity, technology gives us nothing but expense. In return for that participation technology greatly rewards those who take the time to learn it, understand it, and apply it.

You're already invested. Now it's time to put that investment to work.

Reflect and Review



Take a few hours to sit down and think about each of the different components of your organization and ask yourself the following questions.

• What information are we gathering in our information systems?

• When do we interact with our customers and vendors?

• Where are we doing double work?

• How can we use that information to improve our business?

Several years ago I was working with a client that ran a modeling and talent agency association. Their primary source of revenue came from semi-annual conventions, competition focused, attended by association members, their modeling and talent recruits, and industry agents.

There were numerous competitions for every age group, and each competition had a registration fee. The grand prize was an award for model and talent of the year in each age and gender category. To be eligible, contestants were required to compete in a certain suite of competitions.

The client had been very successful in recruiting modeling and talent agencies and had captured the lion's share of the market. It looked as if they had no room for growth, so they began looking at ways to penetrate other markets.

After answering the questions above and looking at the data being collected, we realized many of the contestants didn't know when they were one or two competitions short of being eligible for model or talent of the year in their particular category.

At registration, the contestants were required to review their competitions and sign off on the accuracy of their information. We suggested adding a list of competitions each individual needed to be eligible for model or talent of the year just below a note that said 'If you add these competitions, you will be eligible for model/talent of the year.'

The client said yes and when people saw that they could be eligible by adding one or two more competitions, most added them on the spot. This process required no additional labor, logic or programming because the relevant data was already in the system - all it took was a simple change one report. That simple change added tens of thousands of dollars straight to the bottom line, increased enthusiasm and improved morale.

Uncovering the Hidden Gold



What opportunities do you have to create that kind of impact for your business with existing data and technology? A few ideas you can use to increase sales and improve customer relations for business to business organizations:

• What products and services are your customers not buying because they don't know or understand how they can benefit from them? Are you getting the most out of your invoice messaging options?

• Review customer buying habits for trends. Are certain products becoming less popular because of better alternatives or because your competition is offering better pricing? Bundle less popular items with popular ones and create discounted packages.

• Set up your own rewards program for loyal customers. Provide points for high margin product/service purchases, loyalty, and automatic ordering.

• Create your own proprietary gift catalogue for redemption. (avoid discounts and cash incentives)

And for retail businesses:

• Track your marketing efforts and verify they are working.

• Create a community through a customer rewards program. Inexpensive technology allows you automatically schedule specials and incentives that don't add labor overhead.

• Give away a $5 gift card to every 20th customer.

• Use your website to attract clients and prospects by offering incentives for ideas on how to make the shopping experience better.

The next time you purchase something, look for signs the business appreciates you. Document your findings and look at the data you're already capturing for your business. Think of it as inexpensive market research.

Don't get sucked into fancy, complicated or expensive schemes. If you take just a few hours to focus and use your best thinking, you too will find an infinite pool of inexpensive ideas that turn your technology from a cost center to a profit center.

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Article Tags: Cost, profit, Technology



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