How to Grow Your Business – Part 2

Welcome to our 2^nd article of our 4-part series on how to grow your business. Most business owners are currently working on or have plans of growing their business. As noted in our previous article, to maximize success for your investment in marketing for growth, generate the best results to maximize profitability and long-term success for your business, you should consider the “4 Ways to Grow Your Business” in greater depth. By not addressing things from this broader perspective, you will likely miss out on invaluable opportunities to grow and build the value of your business.

Below is a summary of the 4 ways to grow your business that you need to consider:

1. Increase the number of customers (but only of the type you want)
2. Increase the number of times customers come back
3. Increase the average value of each sale you make
4. Increase the effectiveness of each process in your business.

In this article we will focus on the 2^nd way to grow your business, by getting your customers to come and do business with you again and again.

How to Increase the Number of Times Customers Come Back

Too often businesses are focused on winning new customers and risk neglecting the huge asset you already have – your existing customers. We all know that once a customer purchases from your business, they are far more likely to do that again. This presents a key leverage point for your business to work from. Research has shown it can cost up to 6 times more to win a new customer than it does to sell to an existing one.  So, what are you doing to encourage your customers to increase the number of times they do business with you?

Remember, you have already invested valuable time and money to acquire that customer for the first sale. Every additional sale will likely involve minimal further marketing costs and effort. Research has also shown that repeat purchasers often spend more and generate larger transactions. Let’s look further at some ways you can encourage repeat business with your customers.

Identify your best customers and pamper them – Start by having a customer database that categorizes your customers. If you identify the customers who keep coming back you can tailor your marketing and potentially expand the range of products or services they will buy from you. By categorizing your customer database between A, B, C and D grade customers you can begin developing ongoing communications and offers that are appropriate for each group.

Look at your A grade customers who are your ideal customers who keep coming back and buying more. Consider creating and inviting them to join your “gold class” customer club who get special offers and pricing not available to others. Your A and B class customers could also get special mailings, offers and product samples while your D grade customers might just get your quarterly newsletter or catalogue follow up delivered to them. To get the best return, you need to consider focusing 80 percent of your marketing attention on the top 20 percent of your customers.

Embrace Delivery of Awesome Service – We can all likely relate to the fact there is limited value in chasing new customers if your business doesn’t deliver great service. What you will end up with is a revolving door – as a new customer walks in, an existing customer will walk out. To encourage repeat business, you need to delight your customers with a great buying experience. That experience will keep them coming back and they will be more likely to share their positive experience and drive more referrals your way. Your commitment to awesome service could become a real point of difference compared to your competitors.

Awesome service standards will include many elements. Your team needs quality communication techniques, and your speed of delivery and follow-up with customers should be systemized. Your team needs to be trained to know precisely what is expected of them to meet your customer service standards. Strive to build a platform for your customers to consistently have a great experience with your courteous approach, your point of sale, delivery and after sales service. Focus on training your team so they deliver consistent, high-quality service to your valued customers.

Research has shown that customers are 4 times more likely to move to a competitor if the problem is service-related than price or product related, so keep your focus on delivering quality service.

Nurture your customers – I think we all recognize that customer retention clearly makes sense. Your customers have bought from your business before, hopefully had a positive experience and simply need to be nurtured so they come back and buy again. Focus your efforts and communication with customers that is designed to keep your business top of mind. Don’t fall into the trap of failing to communicate regularly beyond the first or latest sales touch with your customers.

For your business to stay “top of mind”, think about developing more ‘touch points’ with your customers. Consider sending a regular topical newsletter, special offers, service reminders, thank you notes and emails promoting new products or services. You have spent lots of time, effort and money to earn the trust of your customers. It only makes sense to nurture the relationship further, so they become brand loyalists.

Does your business currently offer loyalty programs that reward frequent buyers?  Do you have regular post-sale follow-up calls which will enhance your relationship with your customers. Remember that exceptional quality customer service is often what you do between sales. Regular follow-up with your customers shows you genuinely care about them and their value to your business. When customers are nurtured without being pressured to buy, they tend to share their positive experience with their contacts who may become future customers.

Remember, your existing customers trust you and they will consider purchasing other products or services from you. They provide a great opportunity for your business to cross-sell other products and services. Customer loyalty continues to be a key driver of long-term business profitability.

Consider implementing some of these ideas in the coming months to enhance your customer’s experience with your business. Take the initiative to send thank you letters or plan a special event for your key customers to show your appreciation for their commitment to your business.

In the meantime, stay tuned for our continuing series of articles on the remaining 2 ways to Grow Your Business.

Still Have Questions About Growing Your Business?

If you are thinking about or currently working on growing your business, and need assistance, please contact Rick Gendemann, CPA, CA , one of our business advisory leaders. We look forward to the opportunity to connect with you to discuss your business and address how we may be able to work with you on developing and implementing your business sales strategy action plan.