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First - 

Most business owners would agree that there are many ways to grow a business, but how many can you name? Better yet, how many do you have built into your marketing and business operating plans? 

This article is the first in a series based on the premise that there are four major ways to grow a business, and that a thorough understanding of each is essential. But to really improve the profitability, and ensure the longevity of a business, each of the four techniques must be incorporated into overall business planning and strategy. 

We won't simply list the four ways, but will provide a variety of simple strategies that are practical and easy to implement. This article will focus on the first of the four ways - Win more customers (of the type you want).

To win more customers, most businesses focus solely on advertising. However, advertising can be expensive when compared to other forms of marketing. Also, advertising is often too general - going out to the masses rather than a target market - so that the people who respond are not always the ideal 'type' of customer. 

Winning customers is important, but the ultimate goal is to attract more of the type you want rather than those that make life more difficult! To make advertising and other marketing strategies really pay off, it is important to be clear on whom it is you want to attract. 

First, compile a list of ideal characteristics drawn from your best customers beginning with demographics. For individuals, consider age, sex, income levels; for businesses, focus on revenue, number of locations, industry type, and number of team members. Then, consider how often they buy, how much they spend and what it is like to deal with them. Next, think about what appeals to that ideal group and specifically design advertising and other marketing strategies for them.

So many opportunities so little time!

Other strategies to consider:

All of these strategies are designed to focus marketing and advertising efforts on the goal of generating leads that "lead" to more customers "of the type you want". 

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Second -

When we think of a business from an accounting angle we know that it is an entity made up of assets and liabilities. And as business owners we know that our ultimate goal is business growth! So how do we accomplish this?

Of course going after new customers is important, as discussed in last month's Client Connection. But too often in the quest for growth, business owners forget that there are four ways to grow a business, and forget to take advantage of one valuable asset that every business has. Can you guess what that is?  Hint: Remember it costs six times more to win a new customer.

In short, attracting new customers is expensive! So what could this asset be? Remember that when concentrating on growing a business, you must examine it from a business development standpoint, not on a strictly accounting basis. Doing so allows you to look at your customer database as not only an asset but also an invaluable one, which leads us to the second way to grow your business - Get Your Customers to Come Back More Often.

Survey after survey (and probably your own experience) clearly demonstrates that once a customer has bought from you, they will more likely do it again! So now the trick is to get them to do it again and again. How can we do this? Simply stated, go back to your customers more often and encourage them to do business with you again and again. Doing so will reduce your incidence of "perceived indifference" while increasing the likelihood that they will buy from you more often.

Here are a few ideas:

Campaigns to win new customers are important, but for further expansion you must also get your customers to come back more often. This month try implementing some of the ideas outlined here. And send thank you letters or plan an event just for customers. 

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Third -

In this third installment of our series "How to Grow Your Business," we are working under the assumption that you have been successful in working with the second way to grow the business, "Getting Them to Come Back." Okay, so now you have them where you want them, in your store or on the phone, ready to place an order, now what?

Can you guess what the third way to grow your business is? Remember, nothing discussed in this series is rocket science or is the result of heavy analysis. Each of these topics are largely common sense and simply requires stepping back from your business and looking at it from a different perspective. 

Hint: "Would you like fries or a drink with that?"

No, the key is not to try to compete with McDonald's but rather to look at the reason for this question, understand its value and try to emulate it on some level within your own business. What is the real purpose of this phrase? To get you to buy more food! Which is in fact the third way to grow your business - Increase the Average Transaction Value.

Begin by calculating your average sale by dividing total sales by the number of transactions. Next look at how you could make 'cross-selling' systems and packaging work. Cross selling is where customers are offered an additional product or service that complements their "original" order.

To successfully develop a system to increase transaction value, work with your team to accomplish three tasks.

First make a list of your products and services. Next, identify item by item which other products or services complement that item. Finally, as a team, devise a script to suggest those complementary products or services each and every time you are dealing with a client. 

A very viable method to increase transaction value is to examine your full product/service line and devise a packaging strategy. Packaging is simply offering a better price to customers when purchasing a "package" of related or complementary goods or services. 

From a strategic standpoint, packaging your products and services is a win-win situation. As the business owner, you have achieved your goal of a higher transaction value, and the customer has saved money and time by satisfying their needs in one location and one transaction. Voila! The "Big Mac Value Meal" explained!

Of course, the other option available to you to increase the average value of a sale is to increase your prices! This does sound like a scary proposition, but, as we discussed at last month's BGR meeting, price is only 15% of the customer's decision when choosing to purchase products or services. 

This month, calculate your average sale and set a goal to increase it by the end of this fiscal year. 

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Fourth -

The first three ways to grow your business had one common element: they were all focused on external customers and potential customer contact. Of course, dealing with customers is central to any business strategy, but in the rush to attract new customers, keep your current ones happy and get them to buy more, the internal workings of your business are often overlooked. 

This leads us to the fourth technique, examining every facet of your business and analyzing how it operates on every level, from the inside out, with the ultimate goal of - Improving the processes within your business.

Of course, process improvement is a daunting task, and unlike the first three ways to grow your business, it seems largely intangible. Improving processes will result in either: 

Given that, it's important to review the processes - those actions that make up your business - and implement strategies and systems to improve them. Let's start by taking a simple example like answering a phone call about a product from a potential customer. 

What problems might we find and what impression do they leave on the customer? 

What is the worst possible outcome from this scenario?  The customer gets disgusted and hangs up, never to call again, and tells his friends

In this "highly" (we hope) exaggerated case, the need for process improvement is very apparent. Where do we start? 

Let's look at it from the best outcome and work backward. In this case, you want to convert that inquiry to a customer and obtain an order. 

So, how do we do this? Develop a phone script, to make the answering process uniform. Scripts should include a greeting, responses to inquiries to obtain the information you require and also procedures to follow when your team does not have an immediate response. 

Answering the phone is only one of hundreds of processes that can be improved upon. To look at your business, sit down with your team and identify areas and processes that are either inefficient or not achieving the desired outcome. Next, determine the desired outcome for each and work together to redesign the process. Finally, formulate an implementation strategy and put it into place.

Like most things, process improvement is much easier to handle, when looking at smaller pieces, so start by looking at your business as a series of little processes. This method of examining your business can produce dramatically positive results. Try it!