James sat down with us and put his head in his hands. As one of our partners noted later, he seemed like the weight of the world was on his shoulders.
His company was doing millions of dollars in business but was struggling to stay open. James said he needed to come up with some new strategies to grow his sales or he was going to have to close the business.
What James faced is something that many companies go through at one time or another in their lifecycle. A change in the market, the economy or the competition occurs, and they’ve failed to notice until it’s almost too late.
When the realization sets in that the business is in trouble, leaders in this situation often have a fight-or-flight response. They either decide to fight for the business and improve profitability and the cash flow, or they opt to shut down and move on to what they think will be greener pastures.
James decided he wanted to grow the business and we brainstormed five ways he could do that.
Focus on your existing customers
When entrepreneurs think about growing their business, they often spend a lot of time, energy and money marketing and advertising for new customers.
Unfortunately, it takes roughly five to six times as much money to get a new customer to buy from you as it does to convince an existing customer to come back more often.
You have a relationship with these customers. When was the last time you showed your customers that you appreciated them?
Many existing customers feel slighted when they see promotions exclusive to new customers. How about some exclusive promotions to existing customers?
Reach out to past customers
Recently we asked to see the database of a client who wanted to grow their business. We noticed that they had a list of people who had bought from them before.
We started a campaign to reach out to past customers and, lo and behold, within a few weeks, they had several hundred thousand dollars in new leads.
So often we neglect to keep in contact with past customers, missing opportunities to sell our goods and services when they might be looking but have forgotten about us.
What can you do to reach out to past customers to invite them back?
Increase your prices
A simple way to increase your sales and profitability is to raise your prices.
Unfortunately, many companies don’t have a regular process for reviewing prices and margins and end up selling the same products or services for less than their competition.
We’ve found that in some cases recently – as a result of inflation and price increases from suppliers – products are sold for less than what it costs to buy them.
That sounds silly, but when we’re busy and stuck in day-to-day operations, we fail to consider how we’re actually doing.
Work on your conversion rates
This sounds complex, but it isn’t.
When we think about conversion rates, we’re talking about the number of prospective customers who come in contact with you but end up choosing to buy from someone else.
Your job is to figure out how you and your team can convert more leads into sales. Sometimes this means following up with quotes; other times it means you’re going to need to make changes to systems to improve engagement with prospects.
Either way, if you can improve your conversion rates from 33 to 50 per cent, your sales could increase significantly.
Change it up
Often our customers don’t know the variety of our goods and services until we change it up. This means finding new ways to put our products or services in front of customers.
We may need to change our scripts when we answer our phones to talk about our new maintenance program. Perhaps it means printing promotions on the back of our invoices.
When was the last time you changed your showroom or updated your website?
Driving sales doesn’t have to be costly, but it usually takes focused energy and consistency of effort.
The things we talk about here are things you can do in your business to increase your sales and, hopefully, your profitability. Coming up with a plan to incorporate one or two ideas and get your team engaged could mean thousands of dollars in new business and a better bottom line.
Are you ready to get started?
Dave Fuller, MBA, is an award-winning business coach and a partner with Pivotleader Inc. Need more ideas or have another suggestion? Dave would love to hear at firstname.lastname@example.org. For interview requests, click here.
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