Four ways to grow your business

We're still at a very high level here. Each of these four ways has quite a number of steps. We can't cover them in detail here, but future articles will look at some of the more common ones. Some will be more relevant to your business than others, but the basic issues are the same for everyone. Growth is about making your business more valuable - whatever that is to you.

Let's start with the four ways to grow your business. These four ways are:

Increase the number of customers of the type you want to have.
Increase the number of times customers come back to buy from you.
Increase the average value of each sale you make.
Increase the effectiveness of each process in your business.

Other strategies can help temporarily, but won't make your business more valuable.

Each of the four ways will help grow your business, and there is a compounding effect for the first three. If of the three each increased profit by say 10% each (and there's more than one component in each way so five changes giving 2% would be more than 10%), that's a 33.3% improvement overall.

Ideas make a difference only if and when implemented. Different people will have different issues leading to different solutions, but the framework applies to all businesses. If you want to discuss any of the issues mentioned here, email us - talking involves no cost.

More customers of the type you want

The first way - more customers of the type you want

This is the front end of marketing, where most business owners begin. The qualification "of the type you want" is often overlooked, but customers of the wrong type can actually be negative for your business. They may consume excessive amounts of time, or they may bad-mouth your business to others (and these days social media gives then a wide reach), or for a variety of reasons distract you from your vision.

There are five major strategies for getting more customers: unique core differentiators (UCDs), telephone, sales systems, market research and promotions plans.

A UCD is the reason customers buy from YOU. If you haven't worked out why they should buy from you, you will have a harder time convincing prospects.

The telephone is often how customers contact us, even in this electronic age, although the same principles can apply to other forms of contact. People may ring with queries or complaints. It doesn't matter the reason - if a call is handled badly, that will have a long-lasting effect on the prospect.

A sales system is crucial to ensure every customer gets the same top-quality effort every time.

Market research is essential to target the right people at the right time. You simply have to know your customers, and how your products relate to their needs.

Without a promotions plan, how can you reach the right people at the right time? No amount of research will help if you don't plan how best to use it.

Customers returning more often

The second way - return customers

It can cost up to six times as much to win a new customer as it does to have an existing customer purchase again - which explains why EVERY dealing with a customer is important. You should look at the lifetime value of customers.

Before you try to get customers to return, you should classify them into tiers. You really want the A's back, while the D's going elsewhere is actually the most productive result for your business. Not all customers are good for you or your business.

The first way to get customers to return is simply to invite them back. Follow-up thanks, special or custom offers and asking for input all build the relationship.

Another way is to offer service that goes above and beyond the norm. When customers are delighted, they're likely to be your best advocates.

If they are to feel valued and motivated to return, you must nurture the relationship - mailings, loyalty programmes, follow-up calls, etc. If you do this when you "have time" it will fade out. Systematise it.

Have a customer comment system - with sales, follow-up calls, satisfaction surveys, customer advisory boards, etc. Get feedback AND USE IT.

Increase the average sale value

The third way - increase the average sale value

Customers are looking for help and guidance. A sale is seldom a one-step process, but even when it is, you owe it to them to help them understand all the additional options. Your sales system should include cross-selling, up-selling, bundling and smart merchandising, as well as working your margins and prices.

Cross-selling (or suggestive selling) is well known to most through McDonalds' "Would you like fries with that?". Businesses like McDonalds (and others like supermarkets) have spent many years and dollars refining their sales systems - something they wouldn't do if they didn't pay off.

Up-selling is simply offering higher-priced options. Many products and services come in three price levels. The first is for price-conscious buyers, the second you want to sell and the third for those customers who are happy to spend more for what they perceive as value. Statistics show most people will select the second-tier item.

Bundling adds value to customers. It makes your goods or services more attractive, creating higher perceived value and increasing your average sales value.

Signage, ticketing, presentation and packaging, traffic flows and point-of-sale displays can all increase your average sale value. Educational information, sales testimonials and brochures and even your on-hold messages can all build confidence and increase the average sale value.

It's very important to have a firm understanding of your margins and how they affect your bottom line. Avoiding discounting and price wars is important to maintain and increase your average sales value.

Improve effectiveness

The fourth way - increase the effectiveness of processes within the business

This is the step that ties it all together. The first three will not produce long-term growth without processes operating efficiently. Some key processes include developing a mission and goals, understanding strengths, weaknesses, opportunities and threats (SWOT), working ON not IN, systemising processes and building a team.

We have previously covered developing a vision, but as we said then, a simple statement is just the start. It should lead to a business plan and goal setting, and be reviewed periodically.

SWOT analysis is an assessment of your current business environment. It doesn't remain static, so should be reviewed periodically.

When you're involved in every aspect of regular operations, bigger issues (such as those mentioned in this article) get ignored. It's imperative that you allow adequate time to work ON rather than IN your business.

Although it might seem time-consuming (and you never have enough time), working out the most effective way for every step of every task (from answering the phone to closing up at night) should be mapped and documented. This is even more useful when you have others on your team - but is best done right from the start.

If your business is going to grow, it will need more than just you. This is probably the biggest and most difficult step along the way. Books have been written about it, but the key aspect I want to mention here is TEAM. When you think of employees or contractors that should be the primary thought.