Six Ways to Grow Your Business
“Every business has lots more ways to look at these categories. The odds are you can do something with most of these ideas eventually.”
“Identify your company’s weakest link and make it a strength”
Jay Abrams, a renowned marketing guru, suggests that there are three primary ways to grow a business: acquiring more customers, increasing the average sales per customer, and improving the purchase frequency of existing customers. Although this model offers a valuable framework, it categorizes the ways to grow a company rather than providing specific strategies. Nonetheless, there are numerous approaches to foster business growth, making it essential to prioritize and invest efforts wisely. A prevailing theory proposes that obtaining more revenue from existing customers is often easier than finding new ones, yet many businesses focus more on customer acquisition than retention and upselling.
In each business, various avenues can be explored within these categories, offering a myriad of growth possibilities. One key approach is to identify and address the weakest link inhibiting growth. Every business faces bottlenecks, and by eliminating these limitations, significant leaps in success can be achieved. These obstacles might lie in sales, marketing, or other areas, and minor adjustments in positioning, product offerings, or additional options can have a profound impact. Analyzing the marketing and sales process, commonly known as the marketing funnel, can reveal weak spots and areas requiring improvement. Understanding the cost and customer loss rate at each step can guide targeted efforts, ensuring steady progress throughout the year.
“Be willing to spend more to get a customer”
Diversifying customer acquisition methods is vital for a company’s stability and long-term success. Relying solely on one customer acquisition strategy can limit growth potential and leave a business vulnerable to market changes. Instead, companies should explore multiple acquisition channels, each with its own unique characteristics, acquisition cost, and volume limits. The key is not to limit oneself to a specific acquisition cost but to consider the lifetime value of a customer. If the potential revenue from a customer justifies higher acquisition costs, such investments can be worthwhile and lead to more significant returns.
“Add channels/Niches”
To strengthen a business against larger competitors, focusing on a diverse product portfolio or a range of niches within the core competency is a strategic move. Building a collection of products catering to the same customer base or targeting various specific applications allows a business to create a robust $100+ million company with high barriers to entry in each niche. Customization for smaller niches can be challenging for larger corporations, making these niches an ideal territory for growth and stability.
“Figure Out Your Sales Management Process and Never Stop Scaling Sales”
Founders or CEOs of smaller businesses often face challenges when scaling sales operations. As the company grows, relying on a few salespeople without a well-defined sales management process can hinder further expansion. It is crucial to establish a robust sales management system and recognize that sales management requires different skills from sales itself. Understanding the economics of scaling the sales force and hiring the right talent are vital for sustained growth. CEOs should focus on refining the unit economics, ensuring that all resources work in harmony, and considering the human factors that contribute to successful sales. A well-optimized sales process can lead to exponential growth, while neglecting it can stagnate the company’s progress.
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“Develop a Wholesale or Reseller Strategy”
Building reseller channels can expand a business’s reach and customer base. Researching potential resellers and identifying market opportunities can be a fruitful endeavor. CEOs should engage in competitive intelligence and market research to spot opportunities for collaboration with other businesses that serve similar customer segments. Testing these partnerships on a smaller scale before committing significant resources can help determine the most successful ones, as the 80-20 rule often applies, with a minority of resellers generating the majority of business.
“Offer upsells, bundles, and higher-priced offerings with more service included”
Exploiting the price-quality curve allows businesses to offer upsells, bundles, and higher-priced options with additional services. Upselling, bundling, and providing complementary products or services can significantly increase revenue and profit margins. Companies like Dominos and Staples have experienced rapid growth by making simple yet strategic tweaks to industry-standard formulas. By offering various options, businesses can cater to diverse customer preferences and capture additional value from each transaction.
In conclusion, there are endless possibilities for growing a business creatively. However, it is vital to stay focused on core competencies and the target customer base. Businesses should carefully prioritize growth strategies and implement them one at a time for optimal results. Success in business growth requires a combination of innovative ideas, meticulous planning, and continuous adaptation to market dynamics.
“As a business leader, remember this advice from management guru Peter Drucker: ‘The best way to predict the future is to create it.'” – Peter Drucker
Bob Norton is a long-time Serial Entrepreneur, CEO and investor who founded six companies with four exits that returned over $1 billion to investors for a 25X ROI. Two others are still in development. He has trained, consulted and advised thousands of Entrepreneurs, CEOs and boards since 2002. Mr. Norton works with companies to 2X to 10X growth rates and valuation using AirTight Management™, the world’s most comprehensive Leadership Operating System. He also helps companies raise capital to fund growth. He is also the Founder of The CEO Boot Camp™ and Entrepreneurship University™ for early-stage companies that have not reached product-market fit and $1M ARR.
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