How Many Ways To Grow A Business? 3!
Since it's the start of the new year, thought I'd share a bit of a "big picture" conversation we were having round the office today.
You see, it's all too easy these days to get caught up in the seemingly endless ways to promote and market your business - online and offline there are thousands of opportunities to "get your name out there".
But there are only 3 ways to grow a business (and I'll welcome anyone who can come up with a fourth!).
Get More Customers. Simple, huh? Get more customers and you'll make more money (ceteris paribus and all that). But winning "new business" is often the most expensive and time-consuming way to put extra cash in the bank.
Increase Transaction Value. What can you do to get people spending more money when they get to your "till"? Bundled items, multi-product offers, cross selling and up selling - even a good old fashioned price rise! You've done the hard work winning the customer, so make sure you (ethically) get them to spend as much as they can with you.
Increase Transaction Frequency. How often does your average customer buy from you in a year? What can you do to increase that number? Loyalty offers? Regular communication about new products? Licensing deals?
But here's where the magic happens. What if you could increase each of those 3 by just 10%? 10% more customers, spending 10% more money, 10% more often? Your business grows by 33.1%!
Don't believe me? Take a hypothetical 100 customers, spending 100 dollars, 10 times a year (100,000 dollars) ... and now take 110 customers, spending 110 dollars, 11 times a year (133,100 dollars).
The moral of the story? Whilst the minutiae can be fun (coz that's generally where the creative stuff happens), make sure whatever marketing you're doing is aimed squarely at achieving one of those three goals. More customers, spending more money, more often.
That's what grows a business - and that's how you can make more money in 2011 than you did in 2010.
Have fun doing it!