Here at Mack­ey Advi­sors we have a “4 ways to grow your busi­ness” tool.  In a recent client coach­ing ses­sion, while using this tool, we arrived at 52 dif­fer­ent strate­gies to grow the busi­ness.  After con­sid­er­ing the com­plex­i­ty and time to mar­ket, we deter­mined there are 3 strate­gies that could be imple­ment­ed imme­di­ate­ly.  Just those 3 are on track to pro­duce $160,000 of new rev­enue, with no addi­tion­al cost.  So, we’ll be adding $160,000 to the bot­tom line imme­di­ate­ly!  And we still have 49 strate­gies to go.

Every time we do this work we are blown away by the results.

To help you kick start your own growth plan, here are the 4 fun­da­men­tal ways to grow your busi­ness:

  1. Increase the num­ber of cus­tomers with­in your niche mar­ket
  2. Increase the trans­ac­tion fre­quen­cy
  3. Increase the trans­ac­tion val­ue or “aver­age sale”
  4. Increase the effec­tive­ness of each process in your busi­ness

If you’re at all skep­ti­cal about whether there real­ly are just 4 ways (obvi­ous­ly with mul­ti­tudes of strate­gies under each) think of a strat­e­gy to grow your busi­ness — any strat­e­gy — and you’ll find it very prob­a­bly falls under one of these 4 areas.

  1. Increase the num­ber of cus­tomers with­in your niche mar­ket

If you’re like most busi­ness own­ers your pri­ma­ry focus will be on the first way to grow your busi­ness — win­ning new cus­tomers. You may have often thought “I need more leads’, “I’ve got to get more inquiries”, “If I could just get the phone to ring and more peo­ple to walk through the door we’d be doing real­ly well” and so you invest heav­i­ly in mar­ket­ing.

Focus­ing on this way to grow your busi­ness is often far more expen­sive and the least lever­aged. It costs 5 times more to attract a new cus­tomer than it does to retain an exist­ing one. That doesn’t mean you don’t want to get new cus­tomers.  Just make sure you have active strate­gies for the 3 addi­tion­al ways to grow your busi­ness as well.

  1. Increase the trans­ac­tion fre­quen­cy

Increas­ing the “trans­ac­tion fre­quen­cy” — or the num­ber of times some­one buys from you is an impor­tant step to increas­ing your prof­itabil­i­ty.  Find out where you are now by sim­ply divid­ing your num­ber of pur­chas­es in a year by your num­ber of cus­tomers.  What can you offer to bring them in more? Ideas to con­sid­er here are:

  • Ensure your exist­ing cus­tomers know about all your offer­ings
  • Loy­al­ty pro­grams or pack­age deals
  • Spe­cial offers
  1. Increase the trans­ac­tion val­ue, or “aver­age sale”

This is a “Blind­ing Flash of the Obvi­ous” or “BFO”!  Indeed, it’s obvi­ous, but do you have a clear strat­e­gy to make it hap­pen?

There are two fun­da­men­tal ways to increase the aver­age sale. First, by cross sell­ing or up-sell­ing, both mean you encour­age the cus­tomer to buy more.  Most cur­rent cus­tomers would rather buy from you, some­one they know and trust, than find a new ven­dor.

The sec­ond way to increase the aver­age sale is to raise your prices.  This can be a scary propo­si­tion.  If it has been a while since you bench­marked your prices against your com­pe­ti­tion, start there.  I am often sur­prised how often small busi­ness own­ers leave rev­enue on the table for fear of increas­ing prices.  Do your home­work before act­ing! But don’t walk away in fear before con­sid­er­ing this option.

When it comes to either increas­ing the trans­ac­tion fre­quen­cy or the aver­age sale to your exist­ing cus­tomers as a way to grow, con­sid­er this:

  • The prob­a­bil­i­ty of sell­ing to an exist­ing cus­tomer is 60–70% com­pared to 5–20% for a new prospect.
  • Cur­rent cus­tomers are 50% more like­ly to try new prod­ucts and spend 31% more when they do com­pared to new cus­tomers.

Wow, now we are talk­ing lever­age. Stag­ger­ing isn’t it?

  1. Increase the effec­tive­ness of each process in your busi­ness

Increas­ing the effec­tive­ness of the way you do busi­ness is cen­tral to every­thing, but few peo­ple work at it.

When you think about it, a busi­ness is noth­ing more than a group of peo­ple car­ry­ing out a vari­ety of process­es — the qual­i­ty of the process­es defines and deter­mines the qual­i­ty of the out­comes. Makes sense does­n’t it? Start by think­ing about the 20% of your process­es that take 80% of your ener­gy.  Then stretch your team to find ways to keep or improve qual­i­ty while reduc­ing cost.  Don’t for­get to test your ideas before mak­ing whole­sale changes!

Intrigued?

If you’d like to explore how we can help you grow your busi­ness, call us at 859–331-7755 or con­tact Adam Reynolds at Adam@MackeyAdvisors.com for a strat­e­gy ses­sion.