From the August 2011 issue of our newsletter, Let's Grow. For a FREE subscription, CLICK HERE.
3 Ways to Grow Your Business
If you want to grow your business -- and who doesn't -- there are only three ways to go about it:
- Get existing customers to increase their average purchase
- Get existing customers to buy more frequently
- Acquire new customers
Which you focus on depends in large part on what you're selling. If greenhouses are all you sell, you need to be prospecting all the time. On the other hand, if you sell vegetable seeds, you're likely to have a lot of repeat buyers who might easily buy more from you. Once you determine your main goal, your marketing strategies flow naturally from it. For instance:
Increasing Average Order Size. One way to increase your average order size is by offering an incentive -- either a discount or a gift -- for orders above a certain dollar amount.
Suggesting related items -- such as compost activator when someone buys a compost bin -- also helps boost your order size. You can incorporate these suggestions on your website, in your catalog, emails and in telephone orders.
Offering more products often boosts the average order size. If you can add more pages to your catalog without increasing your postage rate, do so. See if you can beef up your product offerings in your best selling categories, or if there are logical product line extensions you can consider.
Increasing Frequency of Purchase. Often the best way to encourage more frequent purchases from your customers is to ask! Most companies can and should be contacting their customers (at least their best ones) far more often than they do. Whether you use mail, email, social media or some combination, you'll maximize your profits if you keep your company top-of-mind for your customers.
Loyalty programs that reward frequent purchases can also be beneficial. So can offering products, such as holiday gifts, that increase sales in your off-season.
Acquiring New Customers. No matter how loyal your customers, there is always some attrition in your customer base. You need to keep prospecting, if only to stay in place. Sorting out the most effective prospecting methods requires research and careful evaluation. Here are a few questions to ask:
Who's your target market? Describe them in as much detail as possible. Male or female? How old? Where do they live? Do they grow flowers or vegetables? Are they experienced gardeners or newbies? You're likely to have more than one target market, and different strategies may be required for each.
What media is available? Start by listing every possibility you can think of, such as direct mail, magazines, newspapers, pay-per-click programs, online affiliate programs, card decks, radio, television, package inserts, trade shows, social media. Consider how well each one reaches your target market, and whether you'd also be paying for a lot of waste.
What frame of mind are prospects in when using that media? Trade show attendees are usually in "shopping mode." So are people who search online for things like "vegetable seed catalog." People who are watching television or using Facebook are likely to be looking for entertainment, which makes for a more difficult sale.
Likewise, it helps to catch your prospects when they're already thinking about gardening. Reach them when they're reading a gardening magazine, and they may be more receptive than when they're reading a newspaper.
What's your breakeven point? Some media choices allow you sufficient space to sell directly. Others can only generate leads, and the sale must be completed in a second step. Calculate all your costs, and determine how many customers will be required for you to break even. Knowing whether that's a reasonable expectation takes some experience, but calculating your breakeven point is a critical first step.
If you're thinking about doing "some marketing," don't jump on the first idea that pops into your head or that someone presents to you. Take a step back and think about your goals, do a little brainstorming, and develop a strategy that will take you where you want to go.