James sat down with us and put his head in his hands. As one of the partners noted later, he seemed like he had the weight of the world on his shoulders. His company, though it was doing millions of dollars in business, was struggling to stay open. James said he needed to come up with some new strategies to grow his sales or he was going to have to be forced to close down the business.
What James is facing is something that many companies go through at one time or another in their lifecycle. A change in the market, the economy, or the competition has taken place and they have failed to notice until it is almost too late. When the realization sets in that the business is in trouble, business leaders in this situation often take to the fight or flight response. They either decide to fight for the business and improve profitability and the cash flow, or they opt to shut down and move on to what they think will be greener pastures.
James decided that he wanted to grow the business, and we brainstormed 5 ways
that he could be able to do that.
1. Focus on your Existing Customers: Most entrepreneurs, when they think about growing their business, often spend a lot of time, energy and money marketing and advertising for new customers. Unfortunately, it takes roughly 5-6 times as much money to get a new customer to buy from you than it does to convince an existing customer to come back more often. Think about it, you have a relationship with these existing customers already. When was the last time you showed your current customers that you appreciated them? Many existing customers feel slighted when they see promotions exclusive to new customers. How about some exclusive promotions to existing customers!!!
2. Reach out to Past Customers: Recently we had a customer who wanted to grow their business, we asked to see their data base and noticed that they had a list of people that had bought from them before. We started a campaign where we reached out to their past customers and lo and behold within a few weeks they had several hundreds of thousands of dollars in new leads. So often we neglect to keep in contact with our past customers and as a result we miss opportunities to sell them our goods and services at times when they might be looking but have forgotten about us. What can you do to reach out to your past customers to invite them back?
3. Increase your prices: A simple way to increase your sales and profitability is to raise your prices. Unfortunately, many companies don’t have a regular process for reviewing prices and margins and end up selling the exact same products or services for less than their competition. We have found that in some cases recently as a result of inflation and price increases from suppliers’ products are being sold for less than what it costs to buy them.Sounds silly, however when we are busy and stuck in the day-to-day operations, we fail to consider how we are actually doing.
4. Work on Your Conversion Rates: This sounds complex but it isn’t. When we think about conversion rates what we are talking about is the number of prospective customers that come in contact with you but end up choosing to buy from someone else. Your job is to figure out how you and your team can “convert” more leads into sales. Sometimes this means following up with quotes, other times it might mean that you are going to need to make changes to systems to improve engagement with prospects. Either way if you can improve your conversion rates from 33% to 50% success, your sales could increase significantly.
5. Change it up! Often times our customers don’t know the variety of our goods and services until we change it up. This means finding new ways to put our products or services in front of customers. We may need to change our scripts when we answer our phones to talk about our new maintenance program. Perhaps it means printing promotions on the back of our invoices. When was the last time you changed your show room up, or updated your website?
Driving sales doesn’t have to be a costly endeavour, however it usually takes focused energy and consistency of effort. The things we talk about in this blog are things you can do in your business to increase your sales and hopefully your profitability. Coming up with a plan on how to incorporate one or two ideas and get your team engaged could mean thousands of dollars in new business and a better bottom line. Are you ready to get started?
Dave Fuller, MBA, is an Award Winning Business Coach and the Author of the book “Profit Yourself Healthy.” Need more ideas or have another suggestion Dave would love to hear!