There Are Only 3 Ways To Grow Your Business – Part 3
I am picking up on a 4-part series “The Only 3 Ways To Grow Your Business”.
In part one, three weeks ago, I introduced the series by revealing that fundamentally there are only 3 ways that you can grow your business. These are:
Increase the number of customers
Increase the size of the transaction
Increase the frequency of purchase
It was a concept first introduced by Jay Abraham the well-known American marketing guru.
I also illustrated the magic that can happen to the revenue in your business when you begin to apply these 3 variables.
Go here and read the blog if you haven’t already read it:
Then two weeks ago, I started to look at each of the 3 variables in turn.
In the last blog I looked at how to increase the number of customers. This week I’m looking at how we can increase the size of the transaction.
Variable 2 – Increase the size of the transaction:
Increasing the size of the transaction is all about adding value.
Adding value is of course about providing additional benefit to your client or customer which can only enhance the relationship you have with them.
And in any business building an ongoing relationship with your customers is crucial.
So, how is it you can add value by increasing the size of the transaction?
Let’s take a simple example. You go into McDonalds for a hamburger. You go to the counter and what happens?
You get asked: Would you like fries with that? How about some onion rings? Coke with ice?
And before you know it, having gone in for a burger, you come out with a burger, fries, onion rings and a coke!
That’s because McDonalds have just added value to your meal, whilst at the same time increasing the size of the transaction.
Let’s go to the other end of the spectrum.
You decide to buy a brand-new BMW. Let’s say the list price is £35,000.
But, when buying a new car, have you ever paid just the list price? Instead they offer you air-conditioning, halogen headlamps, sunroof. The price is now £40,000 with just a few extras added.
And that’s before they offer you a warranty or servicing package. And of course, the option of a finance package to make the purchase that bit easier.
The dealership has added value to your purchase by offering all the additional options and extras, but they have also increased the size of the transaction.
It is a common way of increasing revenue in many different business sectors. For example, you go to the dentist for a check-up and they offer you teeth cleaning for £49.
You buy a new printer and purchase a couple of extra print cartridges at the same time.
Or in my case, I recently bought a new suit and came out with the suit plus a couple of shirts and ties.
I got added value, shirts and ties to go with the suit. The retailer got an increase in the size of the transaction.
It’s called cross-selling and is an excellent way to increase income because the purchaser is already in buying mode.
Put simply, if you’re not cross-selling, then you’re not adding value to your clients and customers. But also, you’re missing out on opportunities to increase revenue.
In other words, you’re leaving money on the table if you’re not looking for ways to increase the size of the transaction.
In your own business, how could you increase the size of the transaction? What would a cross-selling opportunity look like?
Do you have an additional product or service that you can sell with your main product?
If not, you may wish to think about developing a new and additional product or service that gives you the opportunity to increase the size of each transaction.
Next week, the final variable in the equation: how to increase the frequency of purchase