Free Article – How To Grow Your Income
Learn the 4 keys business growth
Key learning outcomes:
- Learn about the four ways to lift your business’s income.
- Implement strategies for increasing your clientele and the value of each transaction.
- Identify tried and tested tools for expanding repeat business.
- Assess ways of raising prices but at the same time retaining your customers.
Without any doubt, the question we get asked the most is “how can I grow my business?” When we delve further, we find that what most business owners mean by “growth” is an increase in the business’s income. The good news is that there are only four ways you can grow the income of your business, which makes it easier to pinpoint the strategy that is going to be most appropriate for your business. In this article, we will take you through each of the four options for business growth and give you some examples of how you can implement a growth strategy around each of these.
Increase your number of customers
This strategy is reasonably straightforward; if you can provide your product or service to more customers, you will in turn make more money. The trick is how to find new customers for your business. The following are some ideas to get started with:
Promotion – Traditionally promotion of your business would be through advertising in print or on a wider scale through radio or television. There are now many more options open to you via the internet and social media. Technology has advanced to such a degree that you can now promote your business to a highly targeted audience through avenues such as Facebook and Google. The vast majority of customers today will start their search for a product or service online, so it is essential that you have an online presence and that it stands out.
Look for ways that you can cross-promote your business with other local or complementary businesses. For example, a restaurant may want to attract new customers coming into the area, and an ideal way to do this would be to create a relationship with the local real estate agent for them to give away a meal voucher to every new resident moving into the area. This becomes a win-win: the real estate agent has a nice gift to give their customers and the restaurant has the chance to build their business through exposure to new residents moving into their core market.
Be careful to always track how many new customers come from each promotional activity to ensure that you are not spending money with little or no return.
Networking – Think about how you can work with other like-minded people to help build your business. There are a number of professional business groups that you can join, in which everyone works together to help each other’s business grow. Also, consider becoming active in local sporting or other special interest groups, although be mindful that you should only join a group that you are genuinely interested in.
Referrals – You have a base of customers who already like you and deal with you. Think about how you can encourage them to refer their friends, family and colleagues to you. By offering a gift or reward for every referral, you may be able to increase the number of new customers your business attracts.
Increase the amount each customer spends
With this strategy, your aim is to look for ways to increase the dollar value of every transaction. You can do this in a couple of ways:
Upsell – If a customer is buying the standard version of your product or service, look to upsell the premium version to them. The conversion might be along the lines of “did you know that for just another $5 you are able to get the platinum package, which will offer you xyz benefits?” To be effective, your salespeople need to be trained in the appropriate dialogue, the offer must be genuine and there need to be clear benefits and added value for the customer.
Add on – Your salespeople should be trained to offer complementary products to the customer. You can see this technique in action the next time you visit McDonald’s. Every staff member is trained to ask, “Would you like fries with that?” You can also see this on the internet when you shop at online stores such as Amazon. The software is programmed to show you what other customers who bought the product have also purchased. This exposes you to products you might not have searched for otherwise. Think about what added extras you can offer your customers to boost your revenue streams.
Increase the frequency of customer transactions
If you use this strategy to grow your business, you will need to think about how you can build your repeat business. The following are some ideas that have been proven to be effective:
Loyalty programs – Very simply, you are rewarding your customers for their loyalty to you as a business. Large organisations such as airlines spend a lot of money on their frequent flyer programs to build loyalty into their brand. For smaller businesses, you can easily replicate these programs by running a frequent visit program. For example, a coffee shop may give customers a card that allows them to receive rewards at various thresholds – for example, “buy 5 coffees and get your 6th one free. Buy 10 and have breakfast on us!” Ideally, you want to use the program as a way to capture the customer’s details so that you can include them in future promotions.
Advance purchase – Setting up a system where the customer pre-pays for your goods or services at a discounted rate can increase the number of times they deal with you over the course of each year. For example, a beauty salon may sell a program of six facials, which offers the customer a saving and ensures that they keep coming back.
Second visit vouchers – You can give first-time customers a discount or gift voucher to encourage them to visit you again and collect on the discount or use the gift voucher. With this strategy, it is important to ensure that the voucher is perceived as having value and that it is easy for the customer to redeem.
Nurture programs – Building your client database will allow you to add value for your customers and will help to build loyalty and repeat business. We have a number of articles on the website on “client nurture” that can assist you to put a solid program in place.
Raise your prices
Raising your prices will increase your revenue so long as you are able to maintain the volume of customers and the value of their transactions remains consistent. This strategy is one that can seem risky, as most businesses fear that by raising prices they will lose customers. The thing to remember is that people will pay more for high-quality goods and services. If you are providing true value for your customers, it is likely that they will be prepared to pay for it.
Growing your business is a goal that is shared by the large majority of business owners and managers. For your growth strategy to be successful, it is important you adopt the one that is most appropriate for your business. Think about your current customers and how they shop with you. For example, if you have a business that customers do not need to use very frequently such as a plumbing business, you might be best to look at how you can increase the number of new customers through promotions and referrals. On the other hand, a business such as a restaurant might look at building their repeat customers and also ensuring staff are trained to upsell extras such as coffee and dessert.
If you have not already completed it, our business planning series will help to ensure you are building your strategy from a strong knowledge base in regards to your customers and your marketplace.Did you enjoy this complimentary article?
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