Most businesses have a sweet spot – a hidden strategy that can really propel their growth and profitability.
To discover the hidden gold in your business it helps to use a particular lens or focus to reveal where it might be.
The tool that we use to help our clients find the gold that lies hidden from sight in their business is the 4 Ways to Grow your business.
You see, there are only 4 ways to grow a business – strategically speaking. You may come up with hundreds of ideas, yet each idea will fit inside one of the 4 boxes that exist for all businesses.
In this Blog I will share with you the 1st way to grow your business, and for the next 3 Blogs I will add one each week until I have covered all 4 in-depth.
What is the 1st Way to Grow Your Business?
The first way is the one most people spend all their time and money at. It is to Increase the Number of Your Customers/Clients.
Pretty obvious right. I help people qualify this by adding “of the type you want” to the end.
The first thing to do is to create a customer profile of the type you want. What are the characteristics that are important to you? Do demographics play a role? Income levels? Age? What do they do for a living?
Find out who your “A” clients are. One characteristic for our Controllership business is “positive, pleasing personality”. It is number 1 on our list.
That does not mean our clients need to be sugary, sweet individuals! In fact, some can be very abrupt at times. They just don’t blame others when things go wrong, and they treat our Team with polite professionalism. They listen to our advice and respect it.
There are about 8 more items on our client profile list.
What is your ideal, client profile?
One way to start this process is to break your existing customer base into groups.
Here are some ideas on how you can categorize them:
- Total value of sales/ customer
- How many years have they been a customer?
- Number of times they do business with you/year?
- How quickly they pay?
Let’s say you now have 4 groups of clients – A, B, C and D. And, let’s assume that “A” clients are your best ones, and “D” clients your worst. (And, by the way, when I say worst, I do not mean that the “D” clients are in any way bad people. It may simply mean they don’t buy much from you, demand the most attention, and pay the slowest!)
Once you have your 4 groups, you can now dive deeper into your “A” and “B” clients to determine what are the characteristics of this group.
And, then the key question to ask here is this:
Who – as in what other industry – is servicing this group?
Here is an example of what I am getting at. Let’s say you are a law firm and you have classified your clients into 4 groups, and you discover that all of the clients in group A go to large accounting firms for their corporate and personal accounting and tax work.
This is critically important information…. which I will come back to later in this Blog…
How Most Businesses Get More Customers
To get more customers, most businesses use traditional methods like advertising on the radio, TV, newspapers. They also do direct mail, direct phone calls, social media and Google ad words.
The two things all these methods have in common is they are expensive, and they are targeting new business in the cold market place.
And cold it is indeed as anyone knows who goes after new business in the cold marketplace. They don’t know you and you don’t know them. It’s like going to bars to meet your significant other. Possible, yet difficult!
There are much better ways to increase your customer base than just targeting the cold marketplace.
I will focus in on two very powerful ones now….
What is Way Better than the Cold Marketplace?
Asking for referrals or giving incentives to your existing client base is a great way to expand your chances of getting more customers of the type you want.
So, if you have done your homework by segmenting your customer base into A, B, C and D customers, the next step is to ask those A and B clients for referrals.
Here, the old adage is true – birds of a feather flock together – by asking for referrals from your existing customer base, two good things happen.
The first is this – referrals are not from the cold marketplace. This means that the person coming to you has been recommended by a friend they know and trust. You will have their trust likely passed on to you. Or, at least enough trust, to either listen to what you have to say, or, better yet, trust you enough to try your products or services right away.
The second good thing that happens is that it is an inexpensive way to market your products/services.
Now, that said, there is one limitation. And that is this – it can often be a slower way to grow, as your clients or customers just may not take the time – even with incentives – to nudge customers your way.
Which leads me to, another, surprisingly less utilized way to increase the number of customers of the type you want….
The Single Best – and Least Expensive Way – to Increase Your Number of Customers
Earlier in this Blog I talked about asking yourself this vitally important question – “who is serving my customers in another, perhaps somewhat related industry?”
An example for our Outsourced monthly Controllership business are banks. Banks serve our clientele. As do larger accounting firms who do not do what we do.
Here are some simple examples to get your ideas flowing:
- Massage therapist – hotels and bed and breakfasts
- Real estate brokerage – developers
- Greenhouse grower – landscapers
- Home Health Care services – doctors, nurses, hospitals
I think you get the idea here.
Once you have identified the industries, then what you do is develop relationships with people in that industry. Inside of those relationships you educate them as to the benefits for their customers from doing business with you. Most people love referring when it makes them look good in their customers’ eyes to help them in areas where they don’t compete.
Most of our clientele was built around referrals from banks and credit unions because they see the need for and the value of our service often before anyone else does.
So, what I recommend you do is start a list of all the businesses that serve your best customers and start building lasting relationships with them.
Oh, and the way to build trust with those other businesses – those referrers – is to make sure you cross-refer back to them!
All the best, and thanks for reading…