Tools for Growth
26th March 2019
Next steps for Growth - Part 1
Moving your business on to the next level, can feel a little overwhelming. All those ‘helpful’ systems, tools, tips and tricks out there, are enough to make your head spin!
Confucius once said, “Life is really simple, but we insist on making it complicated”, and the same can often be said for how business growth is approached.
The great news is, you don’t have to do it all - good business growth comes from doing just a few things but doing them well.
When it comes to growth most businesses consider one, two or three of the following drivers:
- Get more customers
- Convince their customers to spend more
- Encourage their customers to buy more often
While these are all important, they don’t provide the whole picture for growth. In fact, there are seven key drivers for business growth.
Driver 1 – More customers
This is the most obvious way to grow though it is not always the most effective. Reaching out to new people, grabbing their attention, getting their engagement and finally securing that first purchase can sometimes cost you more than the revenue generated from the first sale. If you are seeking to get more customers, seek to do it in the most cost-effective way possible.
Driver 2 – Better conversion rates
When the focus is solely on getting more customers, many businesses will know their conversion rate – in other words, of all the people who show a passing interest (leads), what percentage will actually buy something. To build more customers, therefore, means generating more leads. But (and it’s a big but), always remember to look at what happens to those leads once they make themselves known. There is an awful lot you can do to improve your conversation rate which, in the end, is going to grow your customers even more.
Driver 3 – Increased customer spend
New customers are great. But never forget the value in the customers you already have. It is by far the simplest way to increase sales. Your existing customers already know and trust you and you already know all about them – what they buy, what they need, what else you offer that might interest them…
Driver 4 – Improve buying frequency
It seems obvious but if your customer buys 10 widgets once a month, you will sell more than if they buy 10 widgets every 2 months. This driver isn’t hard, but it is neglected. Are you able to see ways that your customer can make use of widgets in more ways (so they need to come back more often)? Or, if you offer a service, encourage them to come to you more often?
Driver 5 – Keep customers longer
Do you know why customers leave you? And, before you say “price” let me tell you that, statistically, less than a third will leave because they’ve found somewhere cheaper. A few relocate or no longer have a need for what you sell but the vast majority leave because they aren’t happy with the service they receive. Ask yourself - how happy are your customers?
Driver 6 – Charge more
Incorrect pricing is why so many businesses struggle. There is a fear around price increases because of the belief that higher prices means customers leaving in their droves. It isn’t true. Of course, some customers who are very price sensitive will shop around and leave you but, if you give good service and delight your customers, most will accept an increase – paying more for no increase in your cost.
Driver 7 – Systematise
Make business growth a habit by building systems around all of the other 6 drivers. From systematically asking for referrals to get new customers, to regularly market testing different price points, you can make growth automatic.
It may still seem like a lot to do, but my recommendation is, keep it simple, because, it’s the simple stuff that works.
Grant Jones has teamed up with a small army of accountants across the UK to formalise a 9-step best practice called the Performance, Measurement and Improvement System (PMI). If you’re ready to create an action plan that jet-propels your business to success, click the link to arrange your free PMI consultation.