There Are Only 3 Ways To Grow Your Business – Part 2
Have you ever wondered how many ways there are to grow your business? 100 ways? 200? 500?
It can be intimidating simply knowing where to start.
But according to Jay Abraham, the well-known American marketing guru there is some good news.
Growing a business is not as complex as you may think – and as Jay Abraham points out, there are in fact only three ways – that’s right – only three ways to grow your business.
And fundamentally, the only 3 ways a business will grow are:
Increase the number of customers
Increase the size of the transaction
Increase the frequency of purchase
In last week’s blog I showed you the magic of the arithmetic.
Have a look at last week’s blog to find out more of the detail, but essentially, I illustrated that when you increase only one of the three variables above, then growth in turnover is linear; whereas when you work on increasing all three variables at the same time then growth in turnover becomes exponential.
Over the next three weeks I want to examine in a bit more detail each of the three variables and look in turn at how we can work on each variable to help our businesses grow.
Variable 1 – Increase the number of customers:
This is the first and perhaps most obvious option – increase the number of new customers.
What’s interesting is that it is also the most expensive. The marketing costs of getting a new customer are much higher than the cost of keeping an existing customer and getting them to buy more of your product or service.
So, bear that in mind as you plan your marketing.
Nevertheless, as business owners when we need or want to increase revenue the first thing we often do is look at ways to get more new customers.
And of course, increasing the number of new customers is a perfectly valid and effective way to grow your business.
To increase the number of new customers you can do one of two things: reach more new customers with your existing offering or alternatively develop a new offering.
Either way, there are some key questions you need to ask if you are looking to increase the number of new customers into your business:
- Who has a real need for the product/service I’m selling?
- Does my product meet that need in a way that either saves money, solves a problem or provides additional value?
- How much, if anything, are my potential customers spending to address that need today?
- How many of those potential customers are there?
- How do I reach them?
Answering these questions meaningfully necessitates market research. Market research is a prelude to selling. It teaches you a great deal about your target market.
Who to approach, what to say and how to say it.
In my own business, I’m in the process of researching a potential new target market at the moment and carrying out the necessary work to find out the viability.
Yes, it can feel slow and laborious. But it is a vital part of the job and will pay big dividends as you start your marketing.
Now look at your own business and work out what difference it would make to your revenue if you could increase the number of new customers coming into your business by say 20%.
Then start to think of ways you can achieve it.
Next week we’ll take a look at the second variable: how to increase the size of the transaction.