There are just four ways to grow your business.
It may sound a bit simplistic; however, there really are only four fundamental ways to successfully grow your business – in other words make it more valuable:
1. Increase the number of customers of the type you want to have
2. Increase the number of times customers come back
3. Increase the average value of each sale
4. Increase the effectiveness of each process in the business
It’s interesting to note the fact that all of the business development strategies you might implement will generally fall into one of these four categories. Any other strategy that does not belong in one of these four ways, for example, cutting costs, may help temporarily, but it won’t grow your business. Cutting costs won’t make your business more valuable unless you turn around and reinvest the money you save into one of the four ways.
The four ways work best when used together in an overall strategy. Think about the concept of synergy – the whole is greater than the sum of its parts. The mistake many companies make is to focus on just one of these four ways, and thus miss out on significant growth opportunities.
The Power of Synergy – Example
Assume you have a customer base of 1,000.
1. You are able to increase the number of new customers by 10%. This yields a customer base of 1,100
2. You are able to increase the number of times each customer purchases from you during their lifetime by another 10% (ex., from once to 1.1)
3. You manage to increase your Average Transaction Value (ATV) by 10%, taking it from $100 to $110
4. Improvements in your business processes have allowed the first three increases to occur
Assuming everything else is equal; does it make sense to assume that overall business would grow by 10%? In fact, something completely different happens – something that could be the difference between a profit and a loss, between a comfortable lifestyle for you and a wealthy one.
Doing the math illustrates that increasing all areas at the same time has a multiplier effect of not 10% but a staggering 33.3% (1,100 customers x 1.1 purchases x $110 ATV)! That’s an increase of $33,100 in income as a result of the synergy of all areas improving.
1) Increase the Number of Customers
People buy based on differences they perceive between one business/product and the next. Developing your businesses Unique Core Differentiators (UCD’s) will help potential customers understand the added value, expertise, quality, or service you offer. There are three kinds of UCD’s that can apply to any type of business:
1. Actual – something that is genuinely unique about the way you do business
2. Perceived – how customers think you are different than your competitors
3. Created – something you develop in order to be different (the way you serve people, the processes within the business, etc.)
What are some of the UCD’s you could be promoting right now? Do some research and find out what your competitors are saying is different about the way they do business, and differentiate yourself even further.
The phone is one of the most wasted resources in business today. While many business owners are looking for new ways to promote themselves to generate more interest, they may be neglecting a front line tool for increasing sales and profitability. Because of poor phone technique you may not be doing enough to leverage the leads you already have – why spend more money on generating more leads only to turn them off the first time they call you?
Consider implementing a phone performance and training system within your business to:
1. Alleviate phone anxiety for your Team
2. Ensure consistent phone manners and respect for callers
3. Improve conversion of inquiries to sales
How you handle people who call your business must be addressed if you truly want to grow your business and see results from your marketing investment.
The concept of selling doesn’t have to be intimidating, particularly if you think about it in terms of solving a problem or filling a need. You are doing your customers a disservice if you fail to do everything possible to explain how purchasing from you will benefit them. The bottom line is that people buy from a business they trust. Creating effective and consistent ways of selling within your business will help build that trust. You’ll increase sales and your customers will walk away fulfilled, having found the solution they were seeking.
Here are some strategies for creating a sales system within your business:
• Develop a sales technique and process (i.e. creating rapport, asking detailed questions, speak the prospect’s language, empathizing with their concerns, ASK for the business, etc.), and regular training of team members
• Creating sales tools such as educational documents for your customers and team
• Mapping out sales forecasts to determine your direction and a solid path to follow
• Tracking conversion rates – the relationship between the number of inquiries received and the number of actual sales
• Include cross-selling, up-selling, and bundling products or services together as part of your ongoing sales strategy
• Have a follow-up system in place as it often requires multiple contact s to garner interest form the prospect
Please see The 4 Ways to Grow Your Business – Part 2 of 2 to explore the remaining three ways to grow your business.
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