Small Business Marketing Tips
How To Grow In A Recession
December, 2008
As we go into a new year, I expect that most of you are working on your business plans and worrying about the economy. So let me share with you a brilliant insight that I learned from world-famous business builder Jay Abraham that might add a surprising amount of revenue to your 2009 results.
Jay points out that there are only 3 ways to build your business revenue, and most businesses only really use one of them. The first and most popular method is "get more customers" and this is where businesses tend to put their money and efforts. More advertising, more lead generation, more networking, more sales calls. Now there's no doubt that getting customers is important, but this is the most expensive and time consuming way to build a business.
Let's look at the other two methods that are often overlooked. The second method is "raise the dollar value of the average transaction." How might we get the customer to spend more? One way that grocery stores do this is with point-of-sale impulse purchase items. These tend to be inexpensive, but the principle is good. When the customer has their wallet out, offer them more or better stuff! Good men's stores never let you buy a suit without offering shirts, ties, shoes and socks at checkout. Smart women's retailers have full lines of accessories to go with purchases also.
So what do you do if you're not a retailer? Here's where you get to be creative. What can you offer that supplements or supports the primary purchase? If you're an auto shop, don't let the customer get an oil change without offering a coolant flush, tire rotation, tune up, headlight adjustment or something else, at a special discount, of course. If you sell insurance, don't sell just one policy, ask questions until you uncover all the customer's needs.
In addition, you can raise the transaction value with a quality upsell. Offer the customer the deluxe, higher quality, fuller featured version of whatever they're buying. If you don't have one, get to work and create one! You're leaving money on the table without it.
The third method for increasing revenue is "increase the frequency of customer purchases." Do you know that the most responsive group of prospects you'll ever have is the people who have already bought from you? What are you doing to encourage your customers to buy more often? For most small businesses, the answer is "nothing!" Don't let that be you. Make sure you're constantly creating new and improved products and services to offer, and letting your customers know about them first.
Now, to take advantage of this method you need to be able to contact your customers, which means that you have their physical or email addresses, ideally both. I wrote about the need to collect this information in the May issue. You build a relationship with them, share your expertise, and keep your products and services in front of them. You make them special offers, special discounts, and give them special treatment. Psychologists tell us that an important and fundamental human value is the special feeling of being part of a group, and it creates loyalty to the group. Build on this basic human need and you'll have customers for life!
So now you know. There are 3, and only 3, methods for building your business. Make sure you're using all of them, and you can refuse to participate in the recession of 2009.
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