Last time we looked at the first strategy to grow your business – increasing the right number of customers.

Now that you know who the right type of customer is, it’s time to look at the next step to grow your business:

Strategy 2: Increase the Transaction Frequency

Recently my hairdresser commented that people are not getting haircuts as frequently as they were 12 months ago. And in fact, 12 months ago they weren’t coming in as frequently as 12 months prior to that. This is a classic case of transaction frequency decreasing, that is, people are buying less often.

For my hairdresser, this means she has to keep working at finding new customers to make up the gap in sales from her existing customers. To acquire the new customers there is also an ongoing marketing cost involved. So not only are sales affected, but costs are as well.

If she could reduce the transaction frequency back to 4-6 weeks like it was 2 years ago, her business would much better positioned. At the moment, many customers are only coming in every 12-16 weeks and while they may spend a bit more at each visit, over 12 months, their average spend is down.

One solution to this is to increase the transaction frequency. Quite simply, if you encourage your customers to buy more often from you, sales will grow and so will your business. But this is not always as easy as it sounds and there are a couple of ways to do this.

1. Customer loyalty program

The first way is to develop a customer loyalty program that rewards customers for spending with you. There are plenty of examples of these in our everyday lives – airline frequent flyer programs, credit card point programs, supermarket loyalty programs. These are not just the domain of large companies and small business can also greatly benefit from loyalty programs.

Some programs in our local community include:

- Buy 10 cups of coffee and get the 10th cup free.
- A beauty salon that gives a free facial after 8 visits.
- The local bakery offers a loaf of free bread after spending more than $5 on 6 visits.
- Pizza shop that gives a choice of several menu items once you have saved and collected 10 vouchers from their pizza box.

These types of programs are inexpensive to setup and business owners can get quite creative in their offers and small business marketing. Once setup, ensure they are promoted and fully supported so that customers are encouraged to return again and again.

2. Remind Customers To Come Back

In my experience dentists are always great at sending reminder notices. Unfortunately, there are not many other businesses who are as efficient at it. It is a simple, yet very effective way of reminding people about your business and building a relationship.

In the case of my hairdresser, she could send people a simple reminder note 6 weeks after their last service as a reminder to book in again soon. There could also be an added offer either a discount or free product for booking by a set time. While not everyone will book in, a large enough percentage will take up the offer. The net effect is the transaction frequency starts to increase and the business grows.

3. Special Offers

Another great way to increase transaction frequency is to give your customers special offers on a consistent basis. This not only encourages them to spend more regularly, but builds loyalty and trust. The offers can be varied and don’t always have to be price based. Try giving away a ‘gift with purchase’ or some other ‘free’ service e.g. gift wrapping (with gift purchase), car wash (with car service).

The special offer can also double as a chance to showcase some other products or services you offer and encourage trial.

Using some of these tips will help to increase the frequency of transactions for your business. Not every one is suitable for all businesses. Be creative and consistent in their application and the results will show as you grow your business.

Next time, we’ll look at how to get the customers to buy more each time they transact.

Until then,
Samantha

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