Three ways to grow a business
April 5, 2004
With all of the latest and greatest concepts, seminars, webcasts, and “How-To” books vying for your attention, you would think that growing your business was as complicated as building the space shuttle.
The fact is, there are only three ways to expand your business …
1: Increase the number of customers You increase the number of customers you have by reaching new customers 1) with your existing offering or 2) developing a new offering.
Ideally you will leverage the offering you have to enter a new market or expand the reach in your existing market.
Three key questions to answer to increase the number of customers are: Who has a real need for the product/ service I’m selling? Does my product meet that need in a manner that either saves money or provides additional value? How much, if anything, are they spending to address that need today? How many of those potential customers are there? How do I reach them? Answering these questions meaningfully necessitates market research.
Recommended Stories For You
Market research is a prelude to selling.
It teaches you a great deal about what you will need to know to effectively reach these new customers such as what to say, how to say it and to whom.
For example, our company just completed a national market research study that provided our client with the issues and challenges facing its target market.
Using the research, which provided a keen understanding of the needs and wants of its customers, our client developed messaging and marketing materials that resonated not only with existing customers, but with new customers as well.
Response rate to their lead-generating events have doubled.
2 : Increase the frequency of purchase The quickest path to increasing the frequency of purchases is by making it as easy as possible for your existing customers to do business with you repeatedly.
Another way to look at this is providing additional customer value – and ultimately building customer loyalty.
If you make it easier for customers to buy from you, relative to your competition, then you will continue to win their business.
This, of course, assumes your products or services are comparable or superior to your competitors.
Outside of customer loyalty programs, here are a few areas to consider improving: Responsiveness to requests, calls, emails; accessibility to the customer’s primary contact; consistency in offering; follow-up and follow-through on meetings; and accurate and timely billing.While these may seem like common sense, consider how many vendors you no longer use because they were too difficult to do business with.
Don’t become one of them to your customers.
3: Increase the number of units sold By default you will increase the number of units sold when you increase the number of clients and frequency of purchase.
But you can also increase the number of units sold by understanding how to add value.
If you want to sell more products or bill more hours, providing a value-add benefit or solution will begin to strengthen your customer relationship.
If you are to consistently add value to the customer relationship, you need to fully understand how your customers interpret, define, and quantify the value they receive from your products and services.
Here is a consumer example: A restaurateur offered existing customers 20 percent off for parties of four during lunch and early dinner.
The idea was to add value to his existing clients by providing them with a benefit they could share.
Result: His lunch business went up by 88 percent in one month and by 53 percent over the campaign.
On the frequency side, he experienced 71 percent retention of his customers when he dropped the campaign after three months.
Finally, don’t forget, to see real results, you must start with what you already know about your customers.
It is the market research, customer knowledge you already have, that is literally a hidden goldmine of profit that can grow your business and increase your company’s top line.
It is this customerfocused information that will provide the foundation for generating more sales, retaining and cross-selling customers, and acquiring new customer business.
Armed with customer-focused information, you will know which is the best way to grow your business.
Erica Olsen (Erica@m3planning.com) is a principal of M3 Planning, which helps companies build market-focused cultures through customer-driven strategic planning, empirical market research, and measurable marketing approaches.
Her company just launched MyStrategicPlan.com, an web-based strategic planning site for medium and small businesses.
She is also an instructor and a writer.