Managing a business is like being a top-flight athlete – always looking for ways to become better and better. The consensus among respected writers in the field of business growth is that there are three main ways for a business to grow successfully: get more customers; sell existing customers more products or services; and increase back-end sales. Here’s an extension of those ideas…
1. Attract more customers.
Your customers are those people who buy from you at least once. So one way to extend your business is to get more and more people to buy from you or use your services – at least once. Although there are many different approaches to attracting more customers, the one thing those approaches have in common is that they must either satisfy an existing demand for what you have to offer or create a new one. Supply and demand are key considerations when it comes to attracting more customers.
2. Develop a marketing plan.
Creating or satisfying a demand involves more than a trial-and-error approach. Given the product or services you have to offer, you need to plan how to create a demand and how to satisfy it. A simple, straight-forward marketing plan can achieve that. The plan needs to be specific enough to provide the necessary focus and be flexible enough to adapt to changing circumstances. Remember, no one person can hope to know your product or service better than you do. By all means consult with outside marketing gurus if your strength is not in this area.
3. Sell customers more products or services.
It is considered to be five times easier, and much less expensive, to sell to existing customers than to find new ones. So it’s a sound strategy to focus your energies and other resources on selling additional products to existing customers. Accountants, for example, often provide information technology services, management consulting, and financial planning services in addition to their normal range of services. Successful organisations are finding that existing customers respond positively when asked for additional business or referrals to new customers.
4. Focus on adding value.
Adding value occurs when the service provider suggests additional products or services that dovetail with the selections already made. For example, a laundromat might include phone and fax facilities, exercise machines, movie hire, dry cleaning, and confectionery as add-ons to the basic laundry services provided. Wal-Mart adds value to the shopping experience with people-greeters at the door and distinctively friendly salespeople. In value-adding, the ‘whole’ is seen as being worth more than the sum of the parts.
5. Train, train, train.
Staff training is important if value-adding opportunities are going to be recognised and exploited. Selling customers additional products or services is going to require staff who can bring those products and services to the customers’ attention. Recent research indicates that it is six times more expensive not to train than to train. If you’re into the right training program, additional sales made by well-trained staff will exceed associated training costs.
6. Increase back-end sales.
As your customer base increases and your relationship with those customers improves, you will get to know other services, not directly associated with your business, that customers would value and be prepared to pay for through you. Your main task may only require that you advertise the service or product and then act as the go-between, linking customer demand and the supplier. Video stores, for example, could offer a VCR maintenance, repair, and hire service. That service, though provided by another party, would benefit the customers, and you, through increased customer loyalty and commissions paid to you by the third-party service provider. Back-end sales should be considered as a profitable growth feature by all organisations with a well-developed customer data base. And, of course, the approach fits in well with the whole idea of value-adding.
7. And finally…
The following advice from David Bangs Jr, US expert in small business management, is worth remembering:
- Put your customers first and the profits will follow.
- Give your markets reasons to buy your product.
- Look at what you sell through the eyes of your customers and prospects.
- Business is too competitive to allow your attention to lapse.
- 98% of small business failures stem from managerial weakness.
- Businesses stand or fall on the strength of their personnel.
- The importance of establishing a market niche cannot be overstated.
- Increased sales do not necessarily mean increased profits.
- Keeping control of operating expenses is immensely important and easily overlooked, perhaps because so much emphasis is placed on generating sales.