Project Focus: ARM
Over the weekend, we’re going to do some math.
Step 1: Print out your client list. If you have a subscription-based service, look at your active clients. If you sell a service without a recurring monthly fee, pull up a list of your clients from the last 90 days.
Step 2: add up your revenue received from these clients over the last 90 days.
Step 3: Multiply that number by 1.05 (add 5% to your top-line revenue.) This is your new projected quarterly revenue.
Step 4: take out a highlighter or colored pen. Highlight the people who would quit your service if your rate went up 5%. These are the people you KNOW would never come back if the price changed.
Step 5: add up the total revenue from only the people you highlighted. What did those people pay you, collectively, over the last 90 days?
Step 6: Subtract the Step 5 number from the Step 3 number. If the total is still higher than the Step 2 number, you should raise your rates immediately.
You might lose a few people, but the difference is still greater – and new people will replace the lost members at a higher rate.
Tomorrow, I’ll share how to minimize losses…but Step 6 is the worst-case scenario. If that’s still better than your current scenario, it’s time to raise rates.
This project started on April 3, 2024. Start with that step.
What do ARM, LEG, EHR, ROI, HEAD and NOB mean? Click here
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