There are only three ways to grow any business
Theres a lot of hype about how to improve turnover and profitability. But did you know when it all comes down to it, that there are only 3 ways to grow a business? Read on to find out more.
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Raise price, frequency of purchase, quantity of purchase!
To make your business prosper and grow, it is necessary to understand the principles on which your business growth will be based. Raising prices, frequency of purchase and quantity of purchase are critical to your business survival and growth. Business is based on principles. The best ways to expand and grow your business is to follow these 3 basic principles.
Raise Price: Inflation forces retailers to raise the price of goods. There is no such thing as static price and businesses everywhere are forced to raise prices on goods in order to stay in profit. The problem facing businesses is the fact that consumers see price raises in a different light. They see it as price gauging, and feel that the business is taking advantage of them.
You must be careful when you raise prices to be sure that the sales do not go down. Here are some points to help pacify customers when price raises confront them:
1. Try to add value: this will help to justify price raises in the consumers eyes
2. Raise prices gradually: buyers can tolerate 50c or a dollar, but if you do bigger price hikes you will lose sales.
3. Make sure the items are popular items, so that customers will still feel compelled to buy despite the raise in price.
Frequency of purchase: Frequency of purchase is necessary for your business survival. If customers are not buying with reasonable frequency then you cannot make enough profit for your survival. In order to make this happen you will need to do 2 things.
Retain customers and keep them purchasing from you: You can do this by over delivering to your customers and building good customer relationships with them. This will help to make them your loyal customers. You can also achieve this by selling them back end products. These will be related products that will be offered as bounce back offers when they purchase from you. Much of your profit will be gained this way. In fact it is estimated that 20% of company profits are from the primary product and 80% will be from back end products.
Have a flow of new customers: Every business needs a steady stream of new customers. These buyers will be gained by advertising and market promotions. This will be your most expensive marketing effort but you will gain returns in the long run.
Working your current market will bring in new customers. Establish yourself as the expert and the leader in your market. In this way you will build customer loyalty and gain new customers. Added to this you should expand into new markets with new products to gather more buyers.
Quantity of purchase: This is the principle that will determine not only survival but also the growth of your company. In order for your business to keep on growing, quantity of purchase must increase. This can be done in the following ways:
1. Start an affiliate program: This can be done by starting your own company website and developing a program for people to sell your product. It is just like a sales force in the offline world. The only difference is that your affiliates will be driving warm ready to buy visitors to the sales page on your website, not necessarily to your store or business. This can generate a lot of business and take care of online sales.
2. Froogle: List your business with Froogle. The shopping listing with Google. You can even put your location in this listing and draw more people to your business. You can also make local listings in the search engine and Google maps. This will increase the quantity of purchase.
3. Get a website presence to expand your marketing: These days you cannot really afford to be without a website presence. This is a powerful way to get ahead of your competition. You can draw new customers from the Internet community. As stated you can have a local listing in Google search engine. Plus you can have a local listing with Google Adwords.
4. Focus on multiple niche markets: Do not just stop at one niche market. Expand into other related markets or even completely different ones. This will increase your new customers and quantity of purchase.
5. Up selling: Train all your sales staff to up sell products. This will increase product awareness with your customers and make more sales.
When you pay attention to these 3 principles, you will be able to take your company to new heights. So remember the 3 principles, raising prices, frequency of purchase and quantity of purchase and your company will not stay stagnant. You will continue to grow and expand your business and make your company the leader in your industry.