Did you know there are only three ways to grow a business?
Here they are:
- Increase the number of customers you have
- Increase the size of the average sale (so your customers buy larger)
- Increase the frequency of sales (so your customers buy more often)
You should be working on each point consistently and simultaneously, putting in place strategies that increase each area.
But you don’t need to have a blockbuster new promotion to grow your business. You can have a profound impact on your bottom line by slightly increasing each area…
The power of incremental growth
Let’s look at a simple example showing the impact incremental growth can have on a business.
Imagine your business operates with the following yearly numbers:
You serve 2,000 customers, who purchase from you on average 2 times per year, for an average sale amount of $200 each time. Your metrics look like this:
2,000 x 2 x $200 = $800,000
Now let’s say that through all your hard work, investigating and implementing new strategies, the best you were able to do was increase each of those areas by only 10%...
Your number of customers becomes: 2,000 x 1.1 = 2,200
Your purchase frequency becomes: 2 x 1.1 = 2.2
Your average purchase amount becomes: $200 x 1.1 = $220
… And the power that comes with incremental growth looks like this:
2,200 x 2.2 x $220 = $1,064,800!
From just a small incremental increase of only 10% in each area, you have…
Increased your bottom line by 33.1%!
So, starting today, start thinking about continuously growing in each of those areas. Because it is your job as a business owner or manager to spend time working on the business, not in it.
If you can make a habit of putting time away each week to work ON the business, the results will be dramatic.
Here’s another powerful concept of change you need to know about…
The concept is the…
Weekly 1% rule
If you can put one new strategy or tactic in place each week, that only creates an uplift of 1% (not 10%, 20% or 50%) in the area you’re working on, what will happen to your business?
Your uplift will be over 50% within a year!
Do this every year and your business growth will explode!
Each week you need to be working on the business, not in it.
Get your team together today for a brainstorming session to explore how you can:
- Get more customers in the door
- Increase the average sale size
- Increase the frequency of sales
Here's some idea starters for each area...
Get more customers in the door
- What do your competitors do to bring in new business?
- What advertising/marketing have you done in the past that worked? If you're not still doing it, why not?
- What demographic groups, clubs or associations do your customers belong to? How might you be able to reach them in a creative way?
- How many referral strategies do you have in place right now?
- Have you ever offered free trails, free samples or educational reports to bring in new leads?
- What kind of guarantees do you offer, how can you strengthen it?
- Are you able to purchase a list of viable prospects to contact?
- How many advertising mediums have you tested, and optimised?
- Have you tested using a sales force; sales people or telemarketing?
- Can you offer your services to the customers of a related (but not competitive) business?
Increase the average sale size
- Do you have any special incentives for multiple purchases?
- Do you regularly run sales incentives for buying in bulk?
- What products or services can you package together?
- Do you have standard up-selling processes in place?
- Have you considered raising your prices?
Increase the frequency of sales
- How often do you communicate to your customers?
- What follow up procedures have you tested and are working?
- Do you regularly solicit customers to come back?
- Can you offer repeat or subscription based services?
- What additional products or services could your customers also need?
- Do you frequently run promotions to only your customers (vs. prospects)?