Are you at a time in your business when it feels like you have hit a ceiling? You’re about to learn how to grow your business again.
Some businesses grow up to a certain level and then just stop. In such circumstances, you may notice that your sales are not increasing; no matter how hard you try.
This often doesn’t mean there is something wrong with your business; you just need to think differently.
Economists and marketing experts like to call it ‘market saturation’, a term which means that the demand and potential customers for your products or services may have reached their limits within your area.
So, how can you get out of this ugly situation?
This article reveals three tried and tested strategies you can apply to break through the ceiling, double or triple your sales and grow your business again.
I shall also share a real life example of a local business (owned by a friend) that has successfully used two of these strategies to increase its sales and return the business to a growth path.
Unless you’re comfortable with the current size of your business and don’t plan to grow it any further, you would love this article!
If you ever find your business in a situation where you need to increase your sales and grow your business, here are a few options you will need to consider:
Option 1 – Sell more of your current products and services to your existing customers
Yes, there are ways you can squeeze out more money from your existing customers by offering juicy offers that make them want to buy more of your products and services.
Marketing experts like to call this a ‘market penetration’ or ‘concentrated growth’ strategy.’ Fortunately, I prefer to stick to simpler words that most people can understand.
Your existing customers are the reason why your business has grown to the size that it is. These people come to buy from you because your products satisfy their needs.
You have a high influence over your existing customers because they may already trust and like you. It’s many times easier to sell to an existing customer than to another person who has never bought your products or enjoyed your services.
The problem is, most small business owners often take their existing customers for granted and only focus on attracting new ones.
So, how can you make your existing customers buy more? How can you use your influence over your customers to sell them more products and increase your sales?
Let’s look at one very interesting strategy you can use to achieve this. It’s simple and very effective, yet it is often overlooked by many businesses.
I have a friend (let’s call her Matilda) who took my advice and implemented a loyalty program for her beauty salon business.
Loyalty programs usually work best with businesses that have repeat customers. And a beauty salon totally fits that category because people will often visit a salon to have a makeover or haircut about once or twice a month (depending on customer preferences).
The way the loyalty program worked for my friend was quite simple. First, customers had to register for the program to allow them enjoy the benefits.
After registration, any money spent by a customer adds up to his or her ‘loyalty points’. When these points reach certain levels, the customer enjoys special discounts on all services in the salon.
The more money customers spent in the shop, the higher their loyalty points rose allowing them to enjoy even higher discounts. (photo credit: stampme.com)
What was the effect? Amazing! Customers started to bring their friends along to the salon and referred neighbours and colleagues because any money they spent would help to increase their loyalty points. This led to more sales for the my friend’s salon business and enjoyable discounts for the customers. Everybody wins!
Loyalty programs are a good way to further generate your customers’ interest in your business.
Give them a reason to become your ambassadors and advertise your business. Rather than spend money on advertising that may yield poor results, why not recruit the people who already use your products and services to spread the word about your business?
Your existing customers can help to grow your business if you give them a reason to. Find an interesting way to cultivate a loyal following with your existing customers and you will be amazed at the results!
Option 2 – Sell new products and services to your existing customers
Let’s say you have a business that sells women’s shoes. Fortunately, you have a steady stream of loyal customers who love to buy your shoes because they’re high quality, fashionable and you treat your customers well.
However, there’s a limit to the number of shoes a single customer can buy. Are there other ways to make more money from your loyal customer base of shoe buyers?
Of course there is!
Think about new products that are similar to the things you’re already selling and sell them to your customers.
Women don’t just need shoes. They also need handbags, clothing, lingerie (underwear), wrist watches, bracelets and several other accessories.
At the moment, they buy these other stuff you don’t sell from other businesses around you.
Because they are already loyal to you, these customers would gladly buy all these other stuff from you if only you sold them.
Rather than remain a shoe-selling business, you can expand your business by offering products that belong to the same category as the product you’re currently selling.
Because you have a loyal customer base, you can become a “women’s clothing accessories business” rather than a “women’s shoe business.”
When Matilda opened her beauty salon business, she only provided hairdressing services for women. But women don’t just want to make their hair look good. They want other things too!
Matilda noticed the opportunity to introduce new services that her customers would gladly pay for. She introduced new and related services like manicure, pedicure, facial therapy, nail treatments and several others. (photo credit: bestdesu.com)
By introducing these new services, she transformed her business from an ordinary ‘hairdressing salon business’ into a ‘personal care and beauty salon business’.
Like Matilda, to succeed with this strategy, you need to think of other products that your existing customers usually use in addition to your product/service. Instead of single products, think in terms of product categories. What other products will your existing customers be interested in and would happily purchase?
These new products or services will give a new boost to your sales and you would have accomplished this by selling to people who already buy from you – your existing customers!
Option 3 – Sell your current products to NEW customers
Every day, we are exposed to adverts in newspapers and magazines. We listen to advertising jingles on the radio and watch commercials on television. These types of adverts are like casting fishing nets into a wide ocean and hoping to catch something.
Sometimes, you may catch something but it’s not always the best use of your advertising time, effort and money. How can you be sure that the people who read, heard or watched the adverts will be interested in the product?
Many businesses in Africa are usually limited by their physical location.
There are products that already sell well in one city, town or village and will likely sell a whole lot more if they can be introduced to other locations.
When your business stops growing, it may be that there are no more customers within your area or physical location. At that point, your target market may have reached its limits.
In this situation, the only way to increase your sales and continue to grow the business is to find new customers. So, how can you find new customers?
Here are a few ideas…
By spreading out, I mean you should look for ways to expand your products or services beyond your current location.
Open a branch or new shop in another part of town.
A simpler option is to find distributors/sellers for your products outside your present location. Introduce your product to them and use them as a channel to sell these products to new customers.
Even the big companies love to use this strategy. Every day, new products are coming into Africa from overseas businesses because they see our continent as a source of huge growth for their businesses.
Their home markets are saturated and competition is often quite tight. To grow their businesses, these companies look for new markets with a fresh supply of customers and Africa meets these requirements.
Vehicles, food products, construction materials and more are increasingly imported from North America, Europe and Asia. Why are these busineses desperate to sell their products and services to Africans? The answer – to grow their sales and exaand business.
The internet has changed the way we do business in today’s modern world. A business that would have been totally invisible to the outside world can now be found by people across the world via the internet.
The internet has broken down the physical barriers that used to limit the growth of local businesses. With a simple Facebook Page or your own business website, you too can put your products and services in front of the world.
It’s simple, cheap and relatively effortless! Get your telephone number and email address out there. You never can tell who could contact you for business.
Photo credit: animalsaustralia.org
If you had a bead jewelry business, how would you normally sell your beautiful finished products to make money? Friends, family and neighbours right? If you’re lucky, you could rent a shop in an open part of the city and sell a few hundred bead necklaces and bracelets every year.
But by creating a presence on the internet and showcasing your products online, you would automatically have access to millions (yes millions) of potential customers for your beautiful bead jewelry.
And what would it cost you to have access to such a huge potential customer base in today’s world? Little or nothing.
A Facebook page for example is free to set up and can expose your business to a huge global market that would have been impossible for you to access.
Because of the internet, your potential customers are no longer limited to friends, family, neighbours and other people in your physical environment. You too can now sell to people in the USA, Europe and Far East Asia.
In a previous article, How to Use the Amazing Power of Social Networking to Grow Your Business – The Facebook Example, we provide a step-by-step tutorial that will help you to take your small business online by using Facebook, the world’s largest and most popular social network.
Now you know how to grow your business. It’s time to test these strategies!
The simple strategies I have shared with you in this article are part of the ‘Ansoff Product/Market Matrix’, a framework that is commonly taught (as part of corporate strategy) in business schools around the world.
This matrix is also widely used by marketing experts and business owners who are looking for new ways to grow their business.
If big businesses already enjoy the benefits of applying these tried and tested strategies to growing their businesses, I wonder why small businesses shouldn’t do the same.
If you already own a business (or plan to own one) but you’re concerned about growing your business, these strategies will surely help you.
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To your success!