Accelerating Business Growth

Friday, February 17, 2006

“There are Only Four Ways to Grow Any Business?”
Here I’m going to share with you some practical ideas on how you can create a number of positive outcomes for yourself, for your organisation and for your customers.

The 4 Key Questions of Business Growth…

The ideas are related to the 4 Key Questions of Business Growth – and yes, despite what so many people say there are only four ways to grow any business! There are a number of answers to each of the questions – a number of multiple strategies which you can implement in your business – however when you peel back the layers you’ll always arrive at these 4 Key Questions.

Now, a number of people have said to me “Ah Royston, but what about reducing costs – that will increase my profits?”

And – Yes they are right. However - I’m talking about the untapped, upside potentiality of unlimited growth. Reducing costs has a finite ceiling which you’ll hit – you can only ever cut back so far, where as business growth – unleashing the hidden windfall profits lying in your business - focusing on the upside potentiality - has no boundaries.

So what are the 4 key Questions of Business Growth? Well today I’m going to focus on the first question for you.

The Benefits…

Specifically by using the ideas we’ll go through in this ezine and the subsequent 3 ezines covering the other 3 questions you’ll be able to:

· Increase your turnover

· Increase your Profits

· Increase your customer retention

· Increase your penetration rates

· Increase your market share and…

· Make easier sales - than ever before!

The change in mindset you’ll go through, as I did, when you learn The 4 Key Questions of Business Growth and of course, the answers to those questions – will amaze you!

You’ll start to see opportunities in so many different places.

So let’s look at the first question;

How do you/we increase the number of Customers?

This is where most businesses tend to spend their time – in attaining new customers through the front door of their businesses.

So my question for you is this;

What are the various strategies you’re currently using in order to attract people to your business?

I’ll share a couple of my key accelerators with you and then suggest an exercise you can do either on your own or with your team if appropriate.

Accelerator 1…

The first and number 1 Low/Cost no cost strategy for increasing the number of customers is of course referrals – a subject that I dedicated Business Accelerator Ezine number 5 to (if you’ve not seen it you can download a copy from - just go to the ezine archive)

86% of our business in Pti now comes from referrals – was it always the case – of course not however for the past 18 months we’ve been focused on building a referral only business. Could you do the same? What percentage of your business comes through referrals today? What could it be in the future with an increased focus in this area?

Accelerator 2…

Alliance Partnerships or sometimes referred to as Strategic Alliances. Who has a target market of customers who fit the profile of customer you want to attract to your business? And…
How can you form an Alliance Partnership together to cross refer business? We could spend days and days talking about this strategy however I’ve seen some of our clients achieve double digit growth just by leveraging the power of this one idea!

Accelerator 3…

The third accelerator could be running special events.

One of my clients runs evenings for current and potential customers and holds wine learning evenings. Not just wine tasting but wine learning. Evenings where a wine specialist comes along and teaches the customers and potential customers how to recognise good wines.

These events are extremely popular and the conversion rate of new customers is over 90%.

What special events could you hold for your potential customers?

· A daytime event - where you could showcase your products

· An evening event

· A special day at the office or factory

· Special promotions to go with those events

The list is endless - but I’m sure you can personalise this method and come up with a number of ideas that could be tested at little cost.

Suggested Exercise…

So, this is what I suggest you do - either on your own or with your team.

Write this focused question on the top of the page;

How can I/We increase the number of customers?

Set yourself/your team a target of coming up with 50 plus ideas each and then share collectively on a flip chart. You’ll be amazed just how many ideas you’ll come up with. I now have a list of over 133!

One of my clients has 4 flip charts in his monthly sales meeting, each containing one of the questions from the 4 Key Questions of Business Growth.

2 hours of every sales meeting is dedicated to these four questions. No wonder he is the fastest growing business unit in his company!

Have fun doing this process for yourself. Next time we’ll look at the second key question and I’ll share some ideas on how to personalise it for you and your business. Until then Enjoy Your Business Success!
Guest Article by Royston Guest
How much is the Life Time Value (LTV) of your customer?

For that matter what is Life Time Value (LTV) and why is it so important?

Well, the lifetime value of your average customer is the income you expect to generate from the customer for the duration of time they do business with you. Let’s look at an example – imagine you run a Hair Salon with the following situation:

+ The average cost for a haircut is £20
+ Each client has a haircut on average every 6-7 weeks, therefore on average 8 times per year
+ Each client stay with you for an average of 4 years

Therefore your LTV for your average customer is:

£20 x 8 (no. time per year) x 4 (no. years) = £640 Average LTV per person!

Now this gives a very different perspective to the value of your customers. If we see them as merely being worth the value of each individual transaction then how can we establish how much we’re willing to spend to attract a new client in the first place?

I leave that with you as food for thought!

Friday, February 03, 2006

“How to Prioritise the Potentiality of Your Existing and Future Clients!”

In the last post I covered a strategy for maximising and realising the true potentiality of your Clients and Customers - allowing you to harvest the windfall profits lying dormant in your business -

Oh yes - and of course I shared…

The three accelerator questions I always ask at the start of all new consultancy engagements to start the process;

1. How many Customers do you have?
2. What do those Customers spend with you in total? And…
3. How much could they spend with you based on your current product and service offering? Or phrased a different way how many of your Clients or Customers are multi sourcing or simply buying elsewhere products and services they could be buying from you?

Once you’ve determined the answers to these three questions related to your Clients and Customers, then the next strategy is to prioritise the potentiality.

This is how you do it.

Firstly create a banding system. I usually base this on turnover annualised over the year – for example;

Bronze might be a spend of up to £4999
Silver - £5000 - £9999
Gold - £10,000 – £19,999
Platinum - £20,000 plus
You can also do this exercise related to profitability.

The goal is to have an even spread of Clients and Customers who fall into the various categories. For example make sure you set the platinum band at a realistic level so your team will definitely have Clients who fall into this band or…have the potentiality to migrate to the level of spend over time.

Once you’ve created the bands categorise all your existing Clients by their current spend. Then - and here is the real power – having answered question 3;

How much could they spend with you based on your current product and service offering?

Categorise your existing Clients and Customers by their Potentiality!

Now this has a number of benefits and poses some key questions.

+ Are you and your team focusing your time and effort on the Clients who have the most potentiality?
+ How much more pro active will this allow you to be once you have this information?
+ How much more focus do you think it might create?

Some of my other Clients even run quarterly competitions – focusing on turning bronze Clients into silver - silver into gold - and of course gold into platinum.

I’m sure you’re already thinking of a number of other benefits.

Such a simple yet powerful strategy – creating laser beam focus - allowing you to realise the true potentiality of your existing Clients and Customers.

Perhaps now is the time to create your strategy for implementing this idea in your business – after all action really is the key to success!

Written by Royston Guest, Sales and Marketing Director of Pti International, the UK's leading persoanl and business growth organisation.


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