Growing Sales for Small Business

No matter what industry or size, businesses are mostly concerned with one goal; increasing sales. While it's easy to become complacent if your business seems to be doing well and is consistently bringing in customers, changes in the market and external forces can and will disrupt the status quo. Having multiple strategies and not relying on any one contract will reduce risk and reinforce survival of the company. 

While growing sales is understood universally as a crucial practice, the best methods can be difficult to pinpoint. With so many different businesses operating across the globe, what works for some might not work for others, therefore it is important to understand the context of your own business.

Customer Retention

When people think about growing sales, they often focus on attracting new clients.  This is a mistake. Several studies like this one will point out, it costs much more to attract new customers than it is to retain old ones.  Look to increase your revenue from your existing customer base.  

If a client is already happy with your services after the first time, it is much easier to sell them on other goods or services. By steering your attention and budget towards your existing customers, you can create loyal customers who will make repeat purchases for life. Alternatively, you could also review why clients who have purchased from you before and have stopped. This is an opportunity to potentially win some clients back or gain vital insight on improving your operations to increase customer retention in the future. 

Additionally, for those current clients, you can aim to up-sell other complimentary products and services. For example, if you run auto repair company and you are changing the oil, you could offer discounted rates on rotating the tires to increase the overall sale value. 

Advertising and Marketing

New customer acquisition is often a difficult process but not impossible. Using a carefully targeted marketing campaign you should be able to reach out to your audience and drum up new business. It is important to factor in the return on investment (ROI) before investing into any campaigns because marketing and advertising can become very expensive. Make sure that the customer lifetime value is greater than the cost of the marketing. 

When choosing the type of marketing campaign to pursue, keep in mind that the effectiveness of marketing can vary depending on the business type and industry. Focus on your business's strengths. If you currently benefit mostly from referrals and word of mouth in the community, embrace it by offering referral discounts or hosting local events.  Putting an ad in the paper may not be the most effective use of your marketing budget.

Offer more products or services

Developing new services and products can also attract new customers. If you currently run a restaurant, a wider menu can attract a new crowd, whereas a hairdresser could offer beard grooming if they do not currently. By diversifying what you offer you have a larger outreach of customers, however, you need to be confident in your ability to deliver the service.

One caveat to this approach is over-diversifying.  When you offer too many goods and service, you risk confusing potential customers.  One example is if a restaurant that specializes in Italian food starts offering sushi. Not only does this create a "diner" effect, paralyzing your customers with too many choices, it also dilutes your brand. 

Promotions

One foolproof way to drive sales is to reduce prices.  A reduction in price can attract new customers and is a great strategy for many startups looking to carve out a piece of the pie.  Despite lowering margins, it is a viable strategy to gain precious market share.  Once you've made the sale and attracted new customers, the next step would be to turn them into loyal ones as mentioned above.  

This type of marketing should be used with caution.  It may train your customers to wait and only purchase your goods or services when discounted which will result in cheapening your brand.  As long as this strategy is used sparingly, it can be an effective way to drive first time customers that maybe not have considered buying from your company.