How to grow your business part 1

 


There are three basic levers that you can manipulate to grow your business:
 
  1. You can get new customers.
  2. You can get customers to buy more (increased average order value).
  3. You can get customers to buy more often (increased order frequency).

    Combine these three levers and the effect really is very impressive!

    One – get more customers
    Get more customers always seems like the obvious way to grow the business but it is also a very expensive way to do so. Research suggests that it is between seven and twenty times more expensive to sell to a new customer than it is to sell to an existing customer.

    Acquiring new customers can be a very costly affair and you need to know how much it costs you to acquire a new customer so that you can start to work out how much you would need to spend to acquire ten new customers, etc., etc.

    Two – get more sales per customer

·         If you can, sell more to existing customers. Salesmen call this the ‘upsell’. Is there any way that you can get people to buy additional items when they are purchasing from you?
·         If they are buying a cake can you get them to buy a coffee as well? If they are buying a seat on a training programme, could you get them to buy a DVD as well?
·         If they are buying a kitchen knife, could you get them to buy a knife sharpener as well?
  • If they are buying roebuck shoes, could you get them to buy special roebuck shoe cleaner as well?

My favourite line is the wine waiter’s:

“Madam, it’s cheaper by the bottle than it is by the glass!”

I am sure that you’ve got the point.

 
Three – get customers to buy more often
The third lever in growing the business is to get people to buy more often. Can you get them into your store or to your website more often? This can have a dramatic impact on your sales volumes. Clearly, if you offer a one-off purchase (like funerals!) or occasional purchases (like divorces!) then it will be harder to sell more often to existing customers!!

However, in many cases there are opportunities to shorten the sales cycle so that you get sales more often. For instance, in a restaurant you can run special theme evenings (Greek, Spanish, French, Halloween) to get existing customers to come more often. Or you can have a loyalty card that encourages and ultimately rewards regular visits.

 
 
Robert Craven shows MDs and owners how to grow their sales and profits and focuses on how to do this in recessionary times. His latest book is the runaway success “Beating the Credit Crunch – how to survive and thrive in the current recession” www.directorscentre.com
 
He is a keynote speaker and the author of business best-seller ‘Kick-Start Your Business’ (foreword by Sir Richard Branson) and runs The Directors’ Centre, helping growing businesses to grow.
 
For further information, contact Robert Craven on 01225 851044 rc@directorscentre.com