Business sometimes people make it way too complicated than it needs to be.
I always say business is simple but people are complicated.
Finding the right people or building the right team, because every single individual is different.
So that’s a little bit more complicated. But when it comes to business, it’s actually quite simple.
There are actually only three ways for you to grow a business, to grow a company.
So if you are struggling with your sales, struggling with cashflow, I would recommend you look at one of these three ways and see what you need to work on.
Way number one and that is getting more customers.
How do I get more people in the door.
You want to get more customers, we all want more customers so we can generate more revenue. Now it depends on your business type.
You might have a two-step process, meaning you may not get a customer directly, it may not be a direct sales scenario.
It could be a two-step process where you actually generate a lead. Maybe you generate a lead online and then you convert that lead into a sale, so a two-step process.
So you have the lead generation process and then you have the conversion process. It doesn’t matter. The bottom line is that’s what you focus on, that what most entrepreneurs focus on, how do I get more customers.
The challenge is if you have been in business for any length of time that the biggest payoff, sometimes the highest paid leverage points that you have within your business may not be getting more customers because it costs a lot of money to acquire customers now-a-days.
When you’re running traffic, when you’re doing any kind of advertising, it costs a lot of money to acquire that first initial customer.
If you are a startup, yes, then focus on getting customers because you need customers to survive, but if you have been in business for a while, then I want you to consider some of the other ways to increase your revenue, to grow your business.
Way number two that is getting your customers to come back more often, or the frequency of purchase.
We’re talking about increasing the frequency of purchase.
Now this is a very big deal because getting customers are very, very costly, right, the cost of acquiring a new customer, but if you have customers who are already buying from you, they know you, they like you, they trust you, they have done business with you, very often I find that this is the part that most entrepreneurs neglect.
They spend all their time, it could be 80, 90% of their time just focusing on let’s get more customers, let’s get more customers.
That’s where the revenue comes in instead of nurturing the relationships that they already have.
Let me give you a perfect example. Let’s say if you run a retail business and you are some kind of service provider, maybe a massage therapist, maybe acupuncture, maybe you run a salon, it doesn’t matter, and you have people coming to you, let’s say once a month.
Once a month they will visit your store, they will visit your shop and a transaction will take place. You provide your service, you’ll get paid and that’s 12 times a year, once a month.
Now, I want you to think about this. Imagine instead of once a month, by the time let’s say you finish the service, let’s say you finish doing their hair and before they pay you ask them to book the next appointment.
We call that rebooking, in business term, rebooking the next appointment. And you encourage them, instead of coming back every four weeks, you say why don’t you come back three weeks, every three weeks.
Now, you may not think that’s a big deal. Let me tell you why that’s a big deal. If they come back once a month, that’s 12 times a year, once a month, that 12 times they will transact with your business in a year’s time.
Now what if now they come back every three weeks instead of every month. You know what that does to your business? That’s now 17 times they will come back to your business. So instead of 12 times a year, now they’re coming back to your business 17 times a year. That’s five times more.
Imagine what that does to your revenue. And it didn’t cost you anything extra. All you need to do is ask and suggest, hey, instead of four weeks, why don’t you come back every three weeks.
So, what are some of the things that you can do to get your customers to come back to your business, to visit your business, to buy from you more often?
Way number three and that is getting your customers to spend more money with you each time they do business with you, each time they visit you, or what we call increasing the transaction size.
Now this is very simple. Let’s go back to maybe the retail example. Let’s say each time your customer visits you they spend $100 with you.
$100 and that’s cool, but if each time they come back and you do some kind of upsell and you get them to spend a little bit more, an extra 10 or 20%, instead of spending $100 each time, they spend $110, $120. It may be not seem like a big deal,
but when you take that out three months from now, six months from now, a year from now, in a given year, that’s huge amount of profits.
That’s additional profits and revenue for your company without a lot of extra work.
When you by a pair of shoes, when they upsell you to that shoe polish, you’re already buying that pair of shoes, that shoe polish… Do you know the margin on those things? It’s outrageous.
A perfect example would be McDonald’s.
Whoever came up with the idea of, hey, would you like to supersize that? That one little line.
Imagine you’re buying a meal, going to McDonald’s, would you like to supersize that? Whatever, okay, sure. For just a couple extra bucks supersize the drink and supersize the fries. They’re already making the fries, they already have the drink in the machine, it’s just a bigger container, a bigger little box and there you go. But for them, that couple extra bucks, the margin on that, it is huge because you think about that, any given day, think about how many people go into McDonald’s every single day.
And all they need to do, come with the line, a perfect upsell, increasing the transaction size, getting you to spend a couple extra dollars each time you visit.
Hey, would you like to supersize that? You’re like, sure, From there each person, each cashier from that, let say only 10%, 15% of people say yes, hey, I’d like to supersize that. Cool, a couple dollars extra in profit, in revenue, and then from there you take that every single day, you take that 365 days, now you take it to all the locations.
That is worth tens of millions of dollars, if not hundreds of millions of dollars to the bottom line. Just think about that.
That’s increasing the transaction size. You are there. You’re buying from McDonald’s anyway.
So think about in your business, don’t just focus on getting more customers.
We all need more customers, but how do you get more value? How can you sell existing customers more, be able to deliver more value to them? So don’t just think of how to get more customers.
So the three ways to grow your company, the three ways to generate more revenue, very simple.
Getting more customers.
come back more often.
spend more money with you.