TCFBO #015: The Income Matrix - Part Two

Read Time: 3 minutes

Last week we explained how to use the Income Matrix to identify how much revenue each of your products and services are generating and which customers spent the most with you.

(If you missed Part One, you can check it out here).

OK. So you’ve gathered all the information together.

It’s what you do with this data that will determine the impact it has on your bottom line.

So here are the next steps.

Step 7: Take the Income Matrix you’ve completed so far and highlight all the gaps like so…

We like to highlight them in gold because they represent your unmined seams of gold.

You see, every cell highlighted gold provides you with two opportunities.

An opportunity to tell, which can lead to an opportunity to sell.

Don’t make the mistake of assuming your customer knows your entire range of products or services you offer.

And don’t assume that they won’t be interested in a particular product or service just because you told them about it several months ago and they weren’t in the market to buy then.

Their situation may have changed.

They may need that product or service now.

But they may have forgotten you offer it.

If you don’t tell them, you run the risk that they will purchase a similar product or service elsewhere simply because they didn’t know you could meet their needs.

You’ve already done the hard work in winning a customer and gaining their trust.

They already know, like and trust you enough to part with their hard-earned money in exchange for something you offer.

So telling them about your other great products and services should be the easy part.

OK. Now you can see where there is potential gold to be mined.

But how much is each of these opportunities worth?

Well, the truth is that you won’t know for certain until you tell your customer and they either decline your offer or buy one or more items from you.

However, we can make an educated guess by looking at the average amount spent by each customer who bought a specific product or service.

Which leads us onto…

Step 8: Divide the total amount in each column by the total number of customers who bought that particular product or service.

In the example below, two customers (John and Mary) have previously bought Product A, and the total revenue generated by Product A is £54.

So we divide £54 by 2 to get an average revenue of £27 per paying customer for Product A.

Now, let’s get an idea of just how much potential revenue per product is currently untapped.

Step 9: Multiply the average spend for a specific product or service by the number of customers who haven’t bought it yet.

In the example below, there are three customers (Anne, Bob and Steve) who haven’t bought Product A.

So we multiply £27 (the average revenue) by 3 to get a total untapped revenue of £81 for Product A.

Now you have a good idea of how much potential revenue your business currently has just sitting there waiting to be mined.

The question now is, where are you going to focus your resources?

Which product or service do you want to focus on telling your customers about?

Maybe you want to focus on the one with the most untapped revenue.

Maybe you want to focus on the one that complements a bestselling product.

Maybe you want to focus on the one that is the first step in a sales funnel.

Or perhaps you’d prefer to decide which customer (or group of customers) you want to focus on?

Maybe you want to focus on the one who’s spent the most with you in the past.

Maybe you want to focus on the one who’s bought the least products from you so far.

Maybe you want to focus on the one you know refers the most people to you to make sure they’re up to speed with your current offers.

As you can see, there are a number of things to consider.

But whatever you decide, remember, you’ve already put the effort into bringing your existing products and services to market and winning your existing customers.

Now is the time to focus on mining those seams of gold and maximising the revenue they can offer.

Let us know how you get on and we’ll see you next week.

Paul & Philly

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