After a slower twenty months, it is time to start thinking about your strategies for business growth in 2022. Today we want to share our 7 ways to boost your profits so that you get the headstart you need.
Here are our 7 tips on how to grow your business
As you read these prompts some will feel more apt than others, that’s perfectly ok, we urge you to start with what feels like a natural way to grow your business and serve your customers. Later on, you can layer in the other areas we suggest.
1. Increase your customer retention
Your current clients are a great place to start when it comes to strategies for business growth because they are already experiencing what it is like to purchase from you. Nurturing these clients and delivering value every time brings loyalty and repeat purchasing.
Did you know that the average conversion rate for a sales campaign among those customers who have not purchased from you before is just 1-3%, but among previous customers, you are likely to see a sale conversion rate of 60-70%? This shows us that selling to existing clients is an easier way to boost your profits.
Whilst some of your business growth comes down to remarketing to an existing client base or creating new offers for them, it also has to include a strategy for customer retention. In other words, how do you maintain a strong relationship with a client that sees them wanting to come back time and again?
Did you know that 68% of customers leave a business because of perceived indifference? We all know that people buy from people they trust, but what makes them repeat buy is the strength of your relationship. Think about how you can nurture and continue to build these individual relationships in the coming months.
2. Increase leads generated
Lead generation is key to businesses long-term growth because it brings the opportunity to grow your market base.Ask yourself, in order to bring in more leads, do you need to create
- more impactful marketing
- short-term PPC ad campaigns
- long-term engagement strategies
- referral incentives
- collaboration opportunities to increase your audience reach
- PR opportunities
We would suggest trying a few of these options as part of your overall marketing strategy; find out what works and replicate it.
3. Increase conversion rate
Of course, there are other lead generation opportunities like those you already set up directly on your website, or within your store. These are your product or service landing pages, your in-store shopping experience, or even your point of sale upsells. Many of us take a good deal of time setting these up at the beginning of our businesses, but how many of us consider regularly reviewing these important sales touchpoints? Do you know how well they are performing at converting leads to sales?
By considering these sales conversion strategies and making a good note of how they are currently converting leads into sales we can establish where we need improvement. Make sure to consider: marketing copy, your call to action, streamlining processes and removing distractions.
Here are some ideas for adding extra client confidence to your touchpoints
- update your reviews and testimonials
- offer a money-back guarantee
- eliminate waiting times in store
- start a loyalty scheme or another incentive for repeat purchasing
4. Increase average transaction value
There are a couple of ways to achieve this growth point. You can either increase core product and service prices, or you can introduce valuable upsells or bundled products and services.
A great example that works well in the drop shipping t-shirt world is having a baby or toddler version of the adult t-shirt your customer has in their basket. There is little extra work in creating the smaller product because the design is already made, but the extra revenue from that sale heads towards a bigger profit margin and a higher transaction value.
Another example is in the fast-food industry. How often have you been at the counter to purchase your burger and asked if you’d like fries with that? Or if you order the drink, if you’d like to ‘go large’ for £1 more.
In both cases, the upsell has a higher perceived value and clients are more likely to say yes than no thank you.
5. Increase frequency of sales
In our last Facebook live session, Stephen Paul our MD talked about how small changes have a massive effect on your profitability. Let’s say you offer monthly services, with payments starting 1st of the month and you were to change that to ‘every 4 weeks’, then you have added one extra sale per customer every year. It’s a small change, but a valuable one.
You also see examples of this online. Let us look at Amazon for a moment. You may have noticed that a large number of their products have a ‘subscribe and save’ option on the listing. This is to encourage more regular purchasing from their customers. Does it work? It sure does! Introduced in May 2007 the offer was for grocery products only. Today subscribe and save has been vastly extended to include all manner of home, garden, vehicle and office supplies.
6. Reduce the cost of sales
One of the biggest threats to profitability is the rise of supplier costs. It is crucial that you regularly review your terms with suppliers and feel confident to ask for discounts or reduced prices on bulk services.During your reviews, it is essential that you ask yourself
- do I still need or use this supply?
- is this the right supply package for my business, or would I be better with an alternative?
- is this the best discount offer for this supply?
- is this the right supplier for my business?
7. Reduce overheads
During Covid, many of us immediately hacked away at our business costs to reflect our sudden stop in sales, but how many of us have a plan to revisit overheads monthly, quarterly, or annually? When you are goal setting for your next year, overheads should be a consideration along with your other business costs.
Many of our clients are keeping a hybrid working environment for their staff for the foreseeable, if not permanent future. For some this has meant downsizing their offices and vehicles. For others, it has meant disposing of costly overheads altogether.
Take some time to think about what your business needs for the year ahead and make adjustments to your overhead spend as a result of your plan.
Taking the time to go into your next year of business with a better plan is an important step for your business. In this article, we have given you a number of ways to make real changes in your business fortunes to ensure your business growth.
If you would like to take that further, then please reach out to our team who is ready and waiting to help you build the most successful version of your business.