Most business owners focus on just one way to grow their businesses – winning more customers or clients. You’ve heard it and probably thought it yourself – “quick, business is slow we’ve got to get more leads,” “if I could just win 10 new customers we’d have it covered!”, or “I have to do more advertising.” But that is only part of the picture.
To leverage your investment in marketing, generate the best results, and ensure the profitability and longevity of your business you must consider the “4 ways to grow your business” thoroughly. Doing anything less means you’re missing out on invaluable opportunities to grow your business.
The 4 ways to grow your business are:
- Win more customers (of the type you want)
- Get your customers coming back again
- Get them to spend more each time they do
- Improve the processes within your business
1. Win More Customers (Of the Type You Want)
Most people focus just on advertising to get new customers. However advertising can be so much more expensive, based on the results it typically generates, than other forms of marketing. Worse yet, advertising is often so general – it goes out to the masses rather than a target market – that the people who respond are not your ideal “type” of customers.
How to attract the right type of customers.
Winning customers is important, but what you want to attract more of, is people like the customers you like rather than ones that make life that little bit more difficult!
To make your advertising and other strategies really perform, it is important to be clear on who you want to attract. Write a list of all the characteristics of your ideal customers starting with their demographics. For individuals those are things like approximate age, sex, income levels, dependants and so on. For businesses, consider approximate revenues, number of locations, industry type, number of team members and more. Then consider how often they buy, how much they spend, what they’re like to deal with and so on. Be sure to ask your team’s opinions too. From there, think about what appeals to that ideal group. Then make sure your advertising and other marketing strategies are designed to appeal to people like them.
Other strategies you need to be considering are strategies like actively seeking referrals from your happy customers or from other noncompeting businesses that deal with your ideal type of customer. Or offering a truly competitive and meaningful guarantee. Or creating offers people can’t refuse. Or adding more value than your competitors. Or using direct mail and the 6 essential ingredients that make it work – a compelling headline, offer, call to action, guarantee, text that explains “what’s in it for me?” for the reader and excellent graphic design and layout. All of these can be much more successful in generating leads and you could benefit.
2. Get Your Customers Coming Back Again
Focusing on winning new customers, it’s often easy to neglect the huge asset you already have – your existing customers. Once someone has purchased from you they are far more likely to do that again. This really is a key leverage point for your business, especially when you consider that on average it costs 6 times more to win a new customer than it does to sell to an existing one. Think about that for a minute – 6 times more! What else could you be doing with that money? For one thing you could be going back to your customers more often and encourage them to do business with you again and again.
What could you be doing to entice your customers back into your business? There are hundreds of ways to do that – things like “thank you” letters to nurture your relationship with them, invitations to special events like “closed door sales” or “product launches,” simply asking them to come back, offering follow up appointments for instance, and special offers to entice them to do so will all help.
3. Get Them to Spend More Each Time They Do
Every time you get a customer or client into your business you’ve probably spent thousands of dollars to get them there (by the time you add up all the costs of marketing, advertising and so on). So why not leverage that investment and increase the value of their average transaction with you? They are going to spend something, why not add value and have them spend more than they originally intended? That increases your return on investment and usually gives them better service.
Often people will come to your business with a need of some sort, thinking a certain product or service will solve that need. Many times though you will have an add-on product or service that could bring them even better results when combined with the original. Given that and given the value it adds to them and the impact it can have on the growth of your business you must be considering strategies to increase your average sale. Track what it is now. Take your total sales and divide that by the number of transactions or invoices for example, and that figure represents your average sale.
From there, look at how you could make “cross-selling” systems and packaging work. Cross selling, where customers are offered an additional product or service that complements their initial choice can be very effective. In fact, customers are often receptive.
Probably the most famous example of cross selling comes from McDonald’s. Every time you’ve heard the term “would you like fries or a drink with that?” you’re seeing cross selling in action and it nets McDonald’s millions – so much so their performance standards ensure it is asked each and every time. Now before you think “I couldn’t do that with my customers, they’re sophisticated buyers,” think again. Isn’t it true that people enjoy their burgers more with fries? The same could be true for your business.
Packaging is another strategy that works well. Depending on the nature of your business, packaging different products and services, products and products, or services and services together and offering that “package” at a better price can increase your average spend. Use the list you’d create while thinking about cross selling to discover what would match well as part of a package also.
Increase your price?
Of course the other option available to you to increase the average value of a sale is to increase your prices! Interestingly, more sellers have problems with the price than buyers. Often people only ask “how much is it?” because they don’t know what else to ask and because we promote a product or service with a price.
4. Improve the Processes within Your Business
These days the way we do business can be just as important as what we do. As customers become better educated and more discerning, they often expect more in terms of customer service – the way they are treated and how the product or service delivers. Given that, it’s important to review the processes – those actions that make up your business – and implement strategies and systems to improve them.
This could range from picking up the phone no later than the second ring (which shows you’re attentive to their needs), using “awesome service” to show customers how special they are to you, improving the sales process, better educating your team members on the products and services you offer and more importantly the benefits to the customer of each, going the extra mile when it comes to serving them, improving speed of delivery and more.
When you start to look at your business as a series of processes, this method of examining your business can produce dramatically positive results.
The Power of Synergy
Dr. Stephen R. Covey, in his book “The 7 Habits of Highly Effective People,“ (Simon & Schuster Fireside, 1989) defines Habit 6 as: Creating Synergy – several parts working together to produce results greater than their own independent efforts; where the whole is greater than the sum of its parts. The challenge is to apply the principles of synergy, or creative cooperation, to your approach to growing your business.
Most business owners focus on just one way to grow their businesses – winning more customers. However, to leverage your investment in marketing, generate the best results, and ensure the profitability and longevity of your business, you must integrate all four – creating synergy. Doing anything less means you’re missing out on invaluable opportunities to grow your business.
Review which of the 4 ways to grow your business you’re focused on right now. Is it just one, two, three, or is it all four? Are you using the power of synergy to achieve maximum results for your business?
Joe Truscott has been advising his clients for over 30 years in various ways of increasing their sales and growing their business. If you have any questions, please call me at 905-528-0234 or email Joe at [email protected].