The 4 Ways to Grow Your Business
As the deadline for launching our new blog looms, I had been giving some thought as to what to discuss. When, I remembered a conversation with a client last week about the state of his affairs. It suddenly dawned on me that the perfect topic was about business growth. As entrepreneurs, we are all concerned with creating and growing a business that will someday have a value to be sold.
It may sound a little simplistic, but there are really only 4 fundamental ways to successfully grow your business – in other words make it more valuable:
1. Increase the number of customers of the type you want to have
2. Increase the number of times customers come back
3. Increase the average value of each sale
4. Increase the effectiveness of each process in the business
This topic looks at some of the key strategies within each of these 4 ways that you can use to make your business more valuable. It also looks at how they should be used synergistically in order to capture the greatest value and not miss out on opportunities to grow the business. Any other strategy that doesn’t appear to sit in one of these four ways, for example cutting costs, may help you temporarily, but it won’t grow your business. Cutting costs won’t make your business more valuable unless you turn around and re-invest the money you save in one of the four ways.
Step 1: Increase the Number of Customers You Want
Today I’m going to go through the first way to improve business value. I will cover a fair bit of ground so be warned that I won’t be going into too much detail on specific techniques that you can customize, however in the future I will have related blog entries that will break this subject down further.
Winning new customers, or customer acquisition, is where most business owners focus first, so it’s fitting that we begin here. Customer acquisition is known as the ‘front end’ of marketing – it’s about achieving that initial first-time contact with a potential customer. While there are hundreds of ways to win new customers, we’ll be looking at the 5 major strategies for this:
Developing unique core differentiators for your products and services
Tapping the power of the phone
Implementing a sales system
Using Market Research
Developing a promotions plan
Develop Your Unique Core Differentiators
A Unique Core Differentiator is the reason why customers buy from YOU – something you have that is of real value to them and decides their buying decision in your favor. You may in fact have several UCDs – different ones targeted towards different segments of your customer base.
Good UCDs can come out of simply reviewing the way you do business and deciding to emphasize some aspect of what you already do or of thinking up a different way of doing it. For instance, if you ran an automobile parts business you could offer as UCDs:
Free same day delivery of parts ordered from repair shops within your area – only you service customers who need fast delivery
Keep a range of parts for classic cars – only you meet the needs of car enthusiasts in the area
Offer a top discount to trade customers who spend over a certain sum each month – only you offer this good deal to cost conscious customers
Any one, or maybe all, of these could be effective because each is based on a consideration of what is important to at least one segment of customers, or a particular customer need.
Think about how you’d finish this sentence – ‘People buy from me because I’m the only business that…’ If you can put in something there that only you are doing, then that’s a UCD. If you can’t, then its time to start thinking about creating some UCDs for your business.
Tap the Power of the Phone
Many marketing people consider the phone to be one of the most under utilized resources in business today. Too many business owners spend time and money looking for new ways to promote themselves when they could improve sales simply by improving their phone technique. An effective phone technique is really important in keeping prospects interested – there’s no percentage in spending money on generating leads only to turn them off the first time they call because of the manner in which you talk on the phone; or by handling the call carelessly and leaving people hanging for long waits; or setting up one of those telephone tag situations. We all know how frustrating those things are.
Among the things your team can learn in customer service skills training there may be none so important as phone skills training. Whether it’s doing sales calls, handling information inquiries, or fielding complaints, a great deal of their interaction with your customers will happen over the phone. With the right training, your team will have the focus to handle any call, and make it work to your business’ best advantage.
There are some really basic rules for getting the most out of your phone contacts with customers, even if the call began as a customer complaint. Sales reps can learn how to focus on how to up-sell and cross sell as well, ideas I’ll return to later. The best way to do this is to develop a systematic way of dealing with phone calls. There are training packages around on how to do that.
Develop a Sales System
Just about everyone knows of someone they’d call a ‘natural born’ salesperson. And doesn’t every business owner wish they had one on the team?
If you observe these people time after time you’ll begin to notice a pattern to the way they do things – how they get the prospect interested, how they keep them interested, how they handle objections, how they deal with questions about price and how they finally ask for the sale. All in a way that builds trust and understanding with the prospect as they go along.
In fact, if you watched them often enough, you’d probably begin to recognize that they have systemized their routine – they have a ‘sales system’.
Now it is actually possible to learn an effective sales system. We deal with one by a leading sales expert, Rick Solomon, based on a relationship selling approach. This is one of THE most effective selling methods which also has the added advantage of removing a lot of the discomfort many people feel about ‘selling’ something.
A systemized approach to selling based on effective sales method and shared by you and your team is a must have for increasing your customer base.
Research Your Market
To improve your return on investment in marketing communication pieces such as letters, advertising, emails and direct mail, a targeted rather than shotgun approach is very important. Your marketing should focus on a specific group of people who are the right type to purchase your product or services and give them a message they will relate to. After all, it doesn’t matter how good your product or service is if people don’t think they have a need for it.
So it’s extraordinarily important to understand what makes your customers tick; if you are selling computers then you need to realize that the expert user with knowledge of software and hardware and all the technicalities is going to want different information than a person who just wants something easy to use for their email contact with family and friends.
The point is, to be able to arrive at this knowledge of your actual and potential customers, you need to do some homework identifying your main market segments and profiling them according to their interests – some market research. Then you can market accordingly in a much more focused and cost effective way.
Knowing and understanding their needs is essential to growing your customer base, whether it sells directly to individuals or to other businesses. Once you have that information, you can use it to persuade potential and existing customers that buying from you is in their best interest.
Develop a Promotions Plan
Think about your current spend on advertising and promotions for your product or service and ask yourself these questions:
Do I have an annual budget specificially for these activities?
Do I know how successful my advertising really is, that is, how much return on investment I get for my spend?
Do I know which is the most effective form of advertising for me – trade exhibitions, newspapers, TV, and so on?
Do I have a schedule, an annual diary, of advertising ‘things to do’?
These are the sorts of things incorporated into a promotions plan – an outline of the promotional tools or tactics you plan to use to accomplish your marketing objectives.
Without a set plan based on some specific goals, and without a record of how past efforts have worked out, your advertising efforts must be, at best, hit and miss. To get more customers you need a plan for using the right media at the right time. There’s no point in trying to win customers on a scattergun approach – it will just use up your advertising dollar without necessarily adding one extra customer and you wouldn’t even know it.
Next Month: we will look at Step 2: Increase the number of times customers come back.