How many ways are there to grow a business? If you said more than four please keep reading. I want to make it simpler for you. There are only four ways to grow a business. Just four. Not dozens, not hundreds, but less than a handful.
The “only” 4 ways to grow:
- Increase the number of new prospects.
- Increase sales conversion.
- Increase the average transaction.
- Increase the purchase frequency.
Now, inside each of these 4 ways you’ll find dozens or hundreds of “tactics” to achieve the desired outcome. This is perhaps where your answer earlier fits, but now you can place the tactic with the appropriate strategy. Let’s share some examples.
1. Increase the number of new prospects
This is fairly straightforward. Get more customers and you’ll grow. Question is how do you get new customers? Well, 92.5% of businesses in Louisville, KY believe the only way is to do it with advertising. That couldn’t be further from the truth. Trying to attract strangers to do business with your company is proving tiring & more expensive. There are other tactics you can deploy that are less costly & more guaranteed. One way is to generate more referrals. Thousands of case studies prove referrals are more likely to spend more, complain less, & remain more loyal. Do you have a formal referral strategy?
Strategic alliances are a foreign concept to most businesses because they never thought about creating relationships with non-competitive businesses who have spent hundreds of thousands or millions of dollars trying to attract the exact same customer profile they want to. Partnering with non-competitive businesses who have the exact same target customer you have is one of the most overlooked opportunities to getting new prospects. In these instances, you negotiate an arrangement with a non-competitive business to send their customers to you. Provided, your product or service makes sense for this arrangement.
Joint ventures are powerful ways to increase new prospects. Think about what you see when you walk into a major grocery store. There’s more than just groceries in there now. There’s banks, coffee shops, florists, eye-doctors, etc. These companies have made an agreement to operate in joint conjunction with one another. The ancillary businesses get to take advantage of the grocery store traffic that was already coming in. Who’s already getting the traffic you want and can you offer your services along with it? Adobe does it with Mcafee. ADT does it with cable services. iPod does it with Nike. There’s hundreds of businesses that have cracked the shell to this lucrative customer generation tactic.
2. Increase sales conversion
This one takes a little training & determination. Imagine if you increased your sales conversions 10% across the board. One way is to train your salespeople to sell better. Most companies won’t or don’t spend enough time yielding the most results from the sales opportunities they have. If you sell 1 out of 5 and can take it to 2 out of 5 across the board then you will see exponential growth without spending more money on advertising. Plus, you’ll increase new prospects. It’s the gift that keeps on giving.
3. Increase the average transaction
Do you know what the average transaction is at your company? Take all your sales & divide it by the individual number of sales you’ve achieved. That number is your average transaction. Now, look at that number again & imagine if you could increase it by 10%-100%. Voila, bigger profits. How can you grow your average transactions? One way is to increase pricing. Another is to add up-sell offers that customers can take advantage of resulting in more money spent at time of transaction.
4. Increase the frequency
The number of times someone buys from you within a given week, month, year, or multi-years is an important number to know. Imagine if you got someone to buy from you just one more time than they currently do in the timespan they often do. If you can achieve this across just 10-30% of your customer base You will experience dramatic growth. One way to increase frequency is to give your customer reasons to buy outside their normal buying cycle. You can achieve this by offering special deals to them more times during the year over & above your current specials. You can invite them to trial test-new services or products and then offer special pricing if they like it. You can create subscription or membership offers, loyalty programs, and “dollar spent” promotions that are geared to keep track of what a customer has spent & then offers something of value if they come back in & reach a certain dollar threshold by a certain time.
In summary, there only 4 ways to grow a business but many tactics to achieve inside each one. Think beyond advertising & concentrate on increasing all 4 ways & when they’re all working in tandem you’ll experience exponential growth. Remember, don’t pay for advertising or marketing; pay for results.