3 Strategies To Grow Your Business. In our roles as marketers and business managers, we often find ourselves overwhelmed by the myriad advertising and marketing options available. From traditional methods to digital platforms, the vast array of channels and strategies can obscure the fundamental truth that there are only three ways to grow any business and its revenue.
This distinction becomes particularly crucial in the current landscape, marked by the challenges posed by Covid-19, phased re-openings, and a consumer base that, in many cases, remains apprehensive about re-engaging in past activities.
Amidst state-imposed limitations on capacity and operational levels for many companies, focusing on key aspects within your advertising and marketing approach can yield significant improvements in your business’s sales and overall profitability with just a few straightforward adjustments.
Even in the face of numerous challenges, applying these principles can expedite your business’s journey to profitability or, for those already thriving, propel it to an entirely new level of success.
So, What Are The 3 Ways To Grow Your Business?
- Gain New Customers
- Enhance Transaction Value
- Boost Customer Purchase Frequency
1. Gain New Customers
Acquiring new customers is a pivotal aspect often prioritized by business owners, managers, and marketers. Despite being challenging and expensive, it serves as the lifeblood of any business, offering opportunities for growth and a more significant impact. Businesses must continually pursue new clients to counteract attrition caused by factors such as customer relocation or competitive influences.
Even with the inherent costs of obtaining new customers, marketers should allocate appropriate budgets to this endeavor. However, to enhance the return on investment, a heightened focus on the remaining two areas of concentration becomes essential, ensuring a more significant payoff in the long run.
2. Increase Your Average Transaction Value
Many major retailers and service providers place a significant emphasis on maximizing revenue through influencing customer spending. Recognizing that their initial marketing investment to attract a new customer is crucial, these businesses focus on strategies to enhance the level of purchase in both current and future transactions astounding impact on the business.
So how is this accomplished?
Achieving this goal involves a combination of marketing and operational efforts. In the marketing realm, strategies such as “stepped offers” (e.g., 10% off $100, 15% off $200, 20% off $300) are employed to encourage customers to increase their purchase for additional incentives. Online merchants, in particular, utilize offers like qualifying for free shipping based on a specific dollar value. Understanding the customer’s average transaction value beforehand enables the creation of targeted coupon offers or other incentives to drive higher spending.
Mailer with Stepped Offers
From an operational perspective, the approach varies based on your business’s customer interactions. For instance, in a restaurant setting, servers can enhance the check for dinner by over 20% by providing the dessert menu and posing an open-ended question like, “What looks good?” Rather than accepting a simple “I’m too full,” responding with, “I’m glad you enjoyed everything. If something caught your eye, I can have it wrapped up for you to take home and enjoy later,” can encourage additional sales. In businesses with sales teams or those in service or support roles, prioritizing actions that influence the transaction value during the initial purchase is crucial. Research indicates that consumers are more likely to make additional purchases while in the “shopping/buying” mindset, making it opportune for businesses to fulfill their desires and boost transaction values simultaneously.
3. Increase Your Customer’s Frequency Of Purchase
The final component to consider is prompting customers to return and make more frequent purchases. This could entail either more regularly buying the same types of products or offering a diverse range of products and services with different appeals at various times. Understanding your customer’s current habits provides the basis for setting goals to boost their frequency of return.
By knowing a bit about your customer’s existing behaviors, you can establish starting points for your objectives in bringing them back more often.
Depending on your business, customer buying cycles vary from frequent to years, like real estate or cars. Tailoring your marketing can influence these cycles. In the automotive industry, targeted sales letters leverage specific information about your vehicle, financing, and equity to encourage upgrades every 3 or 4 years. Even with vehicles lasting 10+ years, enticing incentives drive frequent upgrades.
In retail or services, timely coupon offers to existing customers can spur more frequent visits. A direct mail campaign with limited-time offers and discounts brings customers back sooner than expected. Restaurants, retailers, or services can provide a “10% OFF Your Next Purchase” coupon at the point of sale, encouraging a swift return.
The MAGIC Of Compounding!
Now, let’s dive into the practical side of business growth. It’s no secret that expanding a business is tough, especially in challenging times. The good news is that even small adjustments in key areas can have a significant compound effect, yielding remarkable results.
Consider a company with 200 customers, each making an average transaction of $1,000 twice a year. In this basic scenario, the company generates $400,000 in revenue (200 * 1,000 * 2). Making strategic changes in these fundamental aspects can lead to substantial growth.
If only one of the 3 areas above were increased by 10%?
Sales would increase by 10% to $440,000 (220 * 1,000 *2)
What would happen if two of these areas increased by 10% each?
Sales would increase by 21% to $484,000 (220 * 1,100 * 2)
What would happen if all three variables increase by 10% each?
Sales would increase by 33% to $532,400 (220 * 1,100 * 2.2)
Magic of Compounding
Spectrum provides actionable strategies to enhance your business through three essential channels, resulting in a continuous flow of leads, increased sales, and enhanced customer loyalty.
By dedicating a modest effort to each of these key areas, businesses have the potential to achieve a remarkable 33% increase in revenue. Moreover, a consistent focus on these aspects has proven to drive profitability significantly, making it an effective approach for sustained business growth.
Our collaborative approach involves working closely with clients to integrate strategic marketing techniques that address each of these critical areas. This transformative process turns average results into elevated returns, empowering your business to attain higher revenue levels and foster increased customer loyalty.