Finding new ways to grow your business isn’t always easy. Sometimes we can become a bit stagnant in our thinking and it becomes harder and harder to come up with new initiatives and ideas. In simple terms, there are four key ways you can grow your business and increase profits. Using these four strategies will cut right to the core of your business – customers, sales and profits. Focus on these and your business will have no option but to grow.

Today we’ll look at the the first way to grow your business:

Strategy 1: Increase the number of the right type of customers

To do this, you first need to know who the right type of customer is which requires a little bit of market research. Look closely at your best customers (the ones who spend the most money) and try to isolate common factors among them. On the most basic level you could consider things like age, gender, locality, income level and relationship status. For business to business customers, consider industry, size of business, location etc.

Knowing the basic demographics of your customers is a great start, but it does pay to dig deeper and investigate exactly why they are doing business with you. What problems are you solving for them? What makes them buy from your business and not somewhere else? Obviously, one of the easiest ways to answer these questions is to ask and always be listening to customers. This doesn’t need to be a formal survey or questionnaire. Try phoning your best customers or taking some time with them next time they contact your business and find out why they buy from you. Usually they are more than happy to oblige (and it could double as a chance to grab a testimonial).

Now that you know who your best customers are, ask yourself if they are the right type of customer for your business? It may be that your best customers are not necessarily the right ones. That is, they may be demanding, non profitable or in some other way detract from your business and actually hamper the business plans and objectives.

Consider the example of a small business with a range of health supplements that is stocked in a variety of outlets included major supermarket chains, independent supermarkets, pharmacies and specialty stores. While the major supermarkets are likely to be the best customer, often the demands and costs of doing business with them puts enormous pressure on the business. So, when analysed next to other distribution outlets, they may not be the right type of customer for the business. It may be more profitable, even if there is a sacrifice in revenue, to increase the number of other outlets.

By conducting a thorough analysis of your customer base, you will know what the right type of customer for your business is. From here, refine or develop your marketing plan and promotion mix to attract more of these customers to your business. Look at what has worked to get these customers in the past and what hasn’t. Try to have a number of marketing tools working at any given time and continually test and measure the results so improvements can be made.

Now you are increasing the right type of customers, next time we’ll look at the second strategy to grow your business - turning the right customers into buying ones.

Until next time,
Samantha

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