There are three fundamental ways to grow your business, according to Jay Abraham. And I completely agree with him. The first, most common approach, is to “get more clients”.
#1 – Increase The Number of Clients
This is probably a big “Well DUH..” moment, I am sure you knew this already. In fact it is the way most businesses approach growth from day one. Get clients and keep getting more until you can’t handle it any more.
Unfortunately this is the least efficient and most expensive form of growth. Sales meetings, advertising, cold calling, flyers, television ads and on and on. Acquiring a new client can be expensive and time consuming. But it is an easy concept to understand since it is how every business starts…. with the very first one.
# 2 – Increase The Size of The Transaction
This is your fast-path to more revenue and exponentially more profits. And this isn’t always about raising your prices (although its a good idea). The famous saying “would you like fires with that?” immediately comes to mind.
I recently consulted with a local service business where we focused 70% of our effort on this topic alone. Even though they wanted to talk about the #1 way… we found immediate profits by adjusting our focus on method #2.
The simple answer is we offered the service equivalent of “fries” and “super-sized cokes” while we had the customer in our drive-through. Simply put, we offered more stuff to buy at the point of sale. The result was an estimated 17% increase in revenue and no increase in expenses. Think about that. Wouldn’t it be nice if you could take last years earnings and slap 17% on top with no increase in costs?
#3 – Increase The Frequency of The Transaction
If your selling pizza I bet you would like to see the customer return to buy more, more often. This is where followup offers, membership fees and loyalty programs can really kick things into high-gear. If your running a car wash service or hair salon two visits a month vs. one can really kick up the revenue quickly.
My favorite trick with loyalty programs is to craft them as a privilege and incorporate them with tactic #2 (think gold cards and platinum members). For example, when a customer purchases a car wash you ask them if they would like to take the premium option. If they say yes, you then tell them that anyone who purchases the platinum car wash club card gets a 6 premium washes for the price of a standard wash. How does that work? Well you get them to pre-pay for the 6 premium washes at the standard price. And they get the first one today.
Some business owners might argue, thinking that they actually lost money. I would argue that they gained more guaranteed transactions and working capital. Anyway, you get the idea.
If yo have run any campaigns like this, I would love to hear your feedback. There hundreds of ways to use these concepts. The bottom line questions is …
Are you using them and if not when can you start?