As a business it might seem like that the opportunities for growth are myriad and many. Quite simply, this isn’t the case. There are only 4 ways for you to grow your business. There are many ways of making profit, but if you want to expand and grow the business overall then there are only four routes for you to take. These methods are:
1. Increasing the number of customers
2. Increasing the average transaction value
3. Increasing the frequency of repurchase
The first method of growing a business is by increasing the number of customers that you have. This may seem straightforward, but it’s often overlooked. Many businesses focus on their current customer base and fail to utilise opportunities to expand and appeal to wider markets. This is something that a business looking to grow cannot afford to do. No matter how good your business or product is, if you fail to get new customers coming in, then you’re going to lose existing ones over time as current customers’ circumstances change. This is inevitable.
The second method then, is to increase your average transaction value. To use an example – the average spend in a supermarket is currently £76. Comparatively, the average spend in a small corner shop is only £7.80. If you’re the owner of a corner shop, you need to look at what you can do to increase this figure. Perhaps you can look at product placement. For example, if you sell sandwiches, consider positioning them at the back of the store. That way if somebody comes in to buy a sandwich, you’ll increase the chances of an impulse purchase as they make their way back through the shop. They might stop to buy a pint of milk or a bar of chocolate that they hadn’t initially planned on. Even if you increase the average transaction by as little as a pound, you’ll still be growing your business.
Looking further at this point, the vast majority of the time, your customers will have no idea of the full range of products or services that you have to offer. As a salesperson, your responsibility is to make sure that your customers are aware of what’s available and to give them the opportunity to purchase the full variety of products. In most cases it is in the customer’s best interest to buy more from you than other suppliers. Which is also another important point – sales should work both ways. Any transaction should benefit both you and your customer. Whilst you might make a profit, they should also be purchasing something that is of value to them.
In order to increase awareness you need to talk to your clients – not by putting pressure on them but by giving them the opportunity from time to time to know about the other things that you do besides the one or two products that they currently buy from you. The easy way is with a soft sell – maybe drop it in on the telephone: ‘Just while you’re on, I see you haven’t got any so and so’ or perhaps at a meeting: ‘Oh did I ever tell you that we do so and so’. These are little expressions that we can use to make our customers aware of what we offer. Look for the opportunity to increase your average transaction value. In most cases it will be of benefit to your customer or client.
The third way to grow a business is to increase the frequency of repurchase. If your customers buy from you, you want to keep them so that they come again and again. This gives long term, lifetime value. This all relates to customer care, which is one of the biggest opportunities for this. It is one of the greatest ways of making profit in today’s very competitive and challenging market place. Make sure that you emphasise it accordingly.
The fourth and final method then is acquisition, which is to buy another company – an obvious way of growing your business but something that should be looked at only once you’ve concentrated on the first three methods of growth. Good luck!
Richard Denny is one of the world’s most inspirational business speakers and business growth specialists. He is one of the foremost authorities on sales, management training and personal development. Richard is an international best seller and has written 5 hugely successful books which have sold two million copies worldwide and been translated into over 28 languages. Richard Denny has produced a new video series on successful selling called ‘Skill Sharpeners’. The series is suitable for the new entrant into the profession and is absolutely right for the professional who now has the responsibility of acquiring new clients.