Grow Through Increased Sales Target both new and existing customers in your quest to grow your business.
Q: Ihave a very successful business, and I'd like to keep growing,but I'm unsure how to take it to the next level. What are myoptions?
A:Business growth occurs when your business is experiencing permanentincreases in profit as a direct result of measurable andsustainable increases in "sales volume." Only increasesin sales volume that generate additional profit can be consideredto represent real business growth. For example, your business maytemporarily cut its prices, generating increased sales, in order toachieve a larger share of the existing market for yourbusiness's products and/or services. But business growth willonly have occurred when this increased market share leads to futuresales that are profitable.
As the owner of a business that's already successful, youshould first identify your business's growth (increasedprofits) to date, then determine what spurred this growth. Do thisby determining which marketing efforts have historically made thegreatest contribution to your business's increased salesvolume. Then you can exercise your first option for growing yourbusiness: continue implementing those successful marketingefforts.
Your second option is to consider new business growth strategiesthat can be expected to generate additional profitable sales, suchas the following two important strategies: selling more to yourexisting customers, and selling to new potential customers.
Selling more to your existing customers, called an"upsell," typically doesn't just happen. In order tosell your customers more, you have to be prepared to activelymarket to them, and to do so continuously. Some strategies:
- Offer incentives, such as quantity discounts, to encouragemultiple quantity purchases. An example would be to offer a"buy two, get a third free."
- Bundle similar products and/or services with or without adiscount-for example, a stereo receiver, a CD player andspeakers.
- Offer complementary products and/or services that are naturalcompanion purchases. For example, when a bank provides itscustomers with banking services and also offers securitiesbrokerage.
Next Step Get more ideas for growing your business in Every Business is a Growth Business: How Your Company CanProsper Year After Year by Ram Charan and Noel M.Tichy.
- Add additional inventory as a way of encouraging additionalsales of new products and/or services. The additional inventory canbe funded by increasing your investment in your business or byoffering another business's products and/or services to yourcustomers by way of a "strategic product alliance." Thisalliance allows you to offer selected products and/or services ofthe other business, without having to invest in any additionalinventory.
Selling to new prospects should be an ongoing effort to add newcustomers to your existing customer base. Some strategies:
- Share your customer base with another business. This strategyallows you to gain access to another business's customers towhom you can market your business's products and/or services.This is referred to as a marketing alliance.
- Target the existing customers of a competitor by making thecompetitor's customers aware of your business, referred to as a"major sales advantage" (MSA). The MSA consists of suchadvantages as better-quality products, higher levels of serviceafter the sale, a larger variety of inventory and/or services tochoose from, or lower prices.
- Engage in "direct-response marketing." This consistsof the application of marketing strategies that are designed tocause the potential customer to "take immediate action,"such as coming into your store or picking up the telephone to callyour business.
Whichever methods your business uses to achieve increasedprofits from measurable and sustainable increases in sales volume,it's important that you identify "repeatableprocesses" that can be implemented again and again to providethe ongoing business growth you are seeking.
David Meier is founder and COO of Small Business 411, whichprovides small-business owners with ongoing business coaching andthe knowledge and support required to enable them to become trulysuccessful entrepreneurs. Visit the Small Business 411 site athttp://www.smallbusiness411.com.
The opinions expressed in this column are thoseof the author, not of Entrepreneur.com. All answers are intended tobe general in nature, without regard to specific geographical areasor circumstances, and should only be relied upon after consultingan appropriate expert, such as an attorney oraccountant.