When you stop to think about it, there really are just 4 basic ways to grow your business.
They are:
1. INCREASE THE NUMBER OF CUSTOMERS (OF THE TYPE YOU WANT)
2. INCREASE THE BUYING FREQUENCY
3. INCREASE THE AVERAGE DOLLAR VALUE OF A SALE
4. INCREASE THE EFFECTIVENESS OF OPERATION
Increasing the number of customers that buy from you is probably the most obvious way to grow your business. There are two key elements to increasing your customer base – finding new customers while retaining the ones you already have. Most of the focus is usually on acquiring new customers. But just as important is keeping the customers you have. I’ll address customer retention in next article.
Customer Acquisition
Increasing new customers results from increasing the number of leads or inquiries you receive, or increasing your sales conversion rate (the success rate on converting prospects to customers), or both. Let’s look at some strategies for improving both.
Strategies for Increasing Leads/Inquiries (other than traditional advertising):
Referrals – Network with others who have regular contact with your target market. Don’t be afraid to ask for referrals.
Obtain lists of business prospects – The reference section of your public library can help you search for prospects from various business databases. You can obtain a list sorted by various criteria. The cost of this service is minimal (or free for certain searches).
Develop a unique selling proposition – Create a USP that sets you apart from your competition. Something that will give people a specific reason to choose you. After you have done this, promote it in everything you do.
Risk reversal – Create an outrageous guarantee for your product or service that will remove, or limit the risk for a first-time customer. Identify typical customer frustrations and establish guarantees that will alleviate their concerns. Also, make sure you have the systems in place to deliver on the guarantee.
Awesome service – You may not think of this as a marketing strategy, but when your service is awesome your customers will become advocates for you. For many businesses, “word of mouth” advertising is the primary source of new customers. Awesome service will help you retain the customers you have and help you attract new ones.
Strategies for Increasing Your Conversion Rate:
Develop sales systems – Establish systems (or scripts) for responding to typical customer inquiries. Know what questions to ask to identify a customer’s true needs. Don’t just give someone a price, educate them and inform them about what they’re buying.
Qualify your leads – Develop a system for identifying high quality prospects. This will allow you to devote your time where it will pay off the most and increase your conversion rate.
Create a complete sales kit – Assemble a package of brochures, catalogues, reference lists, articles and anything else that will help the prospect make a decision to buy. You may not need them all, but it’s always a good idea to be well armed.
Establish telephone performance standards – Make sure every call from a prospect is handled effectively. That is, make sure the prospect is directed to the right person and is made to feel special. It doesn’t cost anymore and it can make the difference between closing or not closing a sale.
Follow-up – Make sure you follow up with prospects on a regular basis. The fact that they aren’t ready to buy now doesn’t mean they won’t be in the future. Be consistent in your contacts. Find ways to add value to their business by sending them useful information.
One last thing on customer acquisition, sometimes it’s actually better to decrease the total number of customers you serve by increasing the number of high quality customers and intentionally getting rid of the low-quality ones you don’t like dealing with. By focusing on increasing the number of high quality, “A” customers, you may be able to improve the bottom line while actually shrinking your customer base. It’s worth considering.
LSL is committed to helping our small business clients succeed. That’s why we created the P3 Group. The P3 Group of accountants and advisors want to be your Peak Performance Partners by providing, compliance, performance and strategic services that will help your business reach its full potential and run smoothly with, or without you. Call us to schedule a free consultation and business performance assessment at 714.672.0022.
Next article: Strategy #1 Part 2 – Customer Retention
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