I talk with many small business owners and something continually surprises me is how much extra income they are passing up by not leveraging the four common sense business growth strategies. Most concentrate on only one – getting new customers. Of course getting new customers is important but there are three more strategies that are often overlooked or ignored.
- Get more money per transaction. This doesn’t necessarily involve raising your prices (although in many cases that is a good idea too). More money per transaction is something like adding fries and a drink to your hamburger order.
- Increase the number of transactions. Doctors and dentists are experts at this – okay…come back and see us in another six weeks…come in for ex-rays next week…we’ll see you in three months for a cleaning…looking forward to seeing little Timmy, Jenny and Johnny. Would you like to schedule them now? You get the point.
- Increase the length of time the average customer stays loyal. The best way to do this is by continuing to provide a perceived value. How you do that will depend largely on your product. Automotive and shoe brands do a good job as do many restaurants.
As simple as these strategies are, many small businesses are not taking advantage of them. Much of the time the reason businesses are not taking advantage of them is because the business owners simply don’t invest the time to create strategic and tactical plans for growing their business.
A case in point, my friend David owns a rain gutter business. The economy has been in a prolonged slump and his business has suffered. David called me asking for advice on what he could do to improve his business in these troubled times. I evaluated the competition and came up with a number of concrete steps for leveraging all four strategies. Here are the tactics we would use to improve his business.
- Put coupons and action incentives in all the ads he currently runs.
- Instead of giving free estimates we would increase the value of David’s service by providing a free 29 point inspection.
- Start a referral program and use that as an excuse to call previous customers for leads and offer them gutter cleaning services.
- Build a network of partners and use the 29 point inspection to cross promote related services.
- Schedule all new customers with gutter cleanings for the next season in advance.
- Always hand out promotional materials with offers to adjacent houses (people want what other people have).
- Always have an upsell, a downsell, and a cross sale.
- Raise the rates and provide more value.
- Always send out hand written thank you cards stating at least one nice thing about the person.
- Send out a monthly newsletter with homeowner tips and use it to cross promote affiliate goods and services.
Sadly, David has only taken advantage of a couple of these suggestions. When I asked him why he said even though he knew they were good suggestions he didn’t want to work that hard. This is a common thread among small business owners and humans in general. Many people want, but few are willing to put in the effort to get what they want.