March 18, 2013 No Comments

Key Customer Metrics for Growth

When I ask small business owners about their customers, I often get long pauses and even blank stares. Many business owners are so focused on their products or services that they forget to pay attention to their customer numbers. One of my first tasks is to shift that focus onto the customer. Without customers, there IS no business. Therefore, it is critical to every business to know precisely how they get and keep customers.

There are three key metrics every business owner needs to know about those customers:

  • Customer acquisition cost
  • Conversion rate of prospects to customers
  • Lifetime value of the customer (more…)

Filed under: Business, Customers, Growth, Small Business

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February 14, 2013 No Comments

Eliminate Barriers to Small Business Growth

In my analysis of the exotic furniture shop that felt it couldn’t compete with “the big boys”, I mentioned the concept of an “anti-USP”. This is any factor that works against your Unique Selling Proposition. Your USP is one of the most valuable aspects of your business. It clearly states why customers should choose to do business with you instead of your competitors, and it emphasizes the value you offer your customers.

When you have any anti-USPs, however, all the good work you do in your business can be negated by one or more simple things. For the exotic furniture store, the used look of their furniture negated the value of these high-priced pieces.

Sometimes even the business name can be an anti-USP, as in the case of a former client who had the word “Kwik” in his business name. That particular spelling of the word “quick” indicates a low-priced, lower value service so sets up a customer expectation that yes, they’ll get something fast, but it is going to be inexpensive. Sadly, that business owner’s services were not inexpensive at all. Potential customers who invited him to give them a quote got immediate sticker shock as the price far exceeded what they were expecting to pay. His business suffered accordingly. (more…)

February 7, 2013 2 Comments

When Small Business Fails to Grow – Part 3

Used FurnitureSo here’s the final word on what I think happened to this great little business. We’ve already established that the business owner was capable and knowledgeable, adept in most areas of running his store. The business was capitalizing on multiple marketing pillars and was taking advantage of many of its marketing assets such as owner expertise, location, publicity, unique product, and community relationships.

If so much was going right, what went wrong?

As I mentioned in Part 1, the owner felt that he was squeezed out because he could not compete with “the big boys”, notably Ikea.

Yes, the business could have had a more compelling USP (Unique Selling Proposition) but it was not far off. Most of the messaging about the store in some way captured how this shop was different from its competitors. It had a distinct advantage over competitors like impersonal big box furniture stores. When working with any small business client, our first step is to ensure they have a solid USP in place, because that is the foundation upon which all other aspects of the business can be built. (more…)

January 22, 2013 1 Comment

When Small Business Fails to Grow – Part 1

Came across this note from a contact on Twitter: “My friend just had to close his small shop. He said true retail is dead and that one just can’t compete with the big boys.” This saddens me. This shop closure represents a loss in many ways: loss of capital, loss of jobs, loss of a dream. And it didn’t have to happen. My guess, and it’s probably a good one based on the person’s comment, is that this shop owner didn’t know how to leverage his marketing assets.

He didn’t have a USP — a unique selling proposition. That is the BEST way to compete with the “big boys”. A small shop can differentiate in ways that are beyond the big box stores. It can offer more personalized service, including stronger customer relationships. It can offer niche products that are unprofitable for mass market stores to carry. It can add complementary services that enhance the value to the customer. (more…)

January 20, 2013 1 Comment

Systematize your Business Growth

When I speak with clients about the Core Four marketing steps that every business should undertake when looking for growth, part of my job is to help them understand that making marketing part of their business systems is vital to make their business a going concern.

Crafting a Unique Selling Proposition (USP), integrating that USP into all your marketing activities, setting up processes for customer relationship management (CRM), and establishing processes for joint ventures and alliances all contribute to making a marketing system that is repeatable, measurable, and effective.

If you do not have systems in place in your business, you are at risk. Here’s why. If your sales processes depend upon the knowledge of the business owner or the top sales person, you need those individuals in order to make a sale. Customers may buy because they like you, or because you have a business relationship with them. But if those people are not available, no sale can be made. By writing down the USP and ensuring it is communicated during every customer contact, you take the sales process out of the head of the business owner and the top sales person and make it into a system that anyone can use. (more…)

January 15, 2013 No Comments

Hidden Marketing Assets

How much money are you leaving on the table by not fully utilizing all of your marketing assets? If you have a small- to medium-sized business, with revenue under $5 million annually, you probably have some hidden marketing assets that can be leveraged to increase profits, without spending additional money on advertising. These are assets in which you have already invested.

Advertising is a huge expense. If you know exactly how much business your advertising is bringing you, then that’s good! If you can point to the marketing activities that bring in the most revenue, then you’re doing a great job at targeting your market.

But if you have a sense that you could grow, or reverse a downward trend, then there’s probably money sitting on the table in the form of customer data and marketing strategies that are not being put to advantage.

(more…)

January 6, 2013 No Comments

Grow your Business with an Up-Sell

A few simple words could be worth hundreds of dollars in increased revenue for your business. The most famous examples of up-selling, of course, are “Want fries with that?” from McDonald’s and in the movie theater “Do you want butter on your popcorn?”. Just asking if the customer wants another item gives them a chance to say Yes and adds money to that sale. Another obvious option is the up-size — “Would you like a Large for 25 cents more?”.

Nearly every type of business has the chance to offer an additional item. At the hair salon, if the customer is getting hair coloring, ask if they want their eyebrows and eyelashes colored as well. Salons already do a good job selling hair care products, but it works better if a similar item cannot be found elsewhere at a better price for comparable quality. If your car is in for maintenance, an oil change “while it’s on the hoist” is a good potential up-sell. It’s even more attractive if there is a discount from the normal price. (more…)

January 2, 2013 No Comments

Four Core Activities for Business Growth NOW

In a New Year, we all like to revitalize our businesses and make plans for growth and improvement. This is a great time to look at how you are spending your marketing dollars and what you can do to get more revenue without increasing your budget.

When I go through an opportunity analysis with a client, I look at four main areas where they can see rapid business growth:

  1. Their Unique Selling Proposition (USP) or extra value proposition.
    What this business does better than any competitor.
  2. Integration of the USP into all marketing and business activities.
    The business and all staff have to be “living” the USP in everything they do.
  3. Existing customer database. This is a huge, often-untapped resource
    in any small-to-medium enterprise.
  4. Alliances and partnering. This is a very powerful way to grow.

 

The free, no-obligation opportunity analysis is basically an asset-finding interview, where we discover the many ways that the business is leaving money on the table. Along the way, we often find other problems that can be quickly solved to increase revenue. (more…)

November 5, 2012 No Comments

All Businesses Need FOCUS

There are many aspects to creating and running a business. The one that needs the most attention, whether in startup phase or as the company grows, is sales. Without sales, i.e., without customers buying from you, you have no business.

It’s easy to get lost in the many details of getting your company set up and functioning smoothly. You need people, processes, infrastructure, stationery, a web site, marketing, fulfillment, and so on. And those things can consume a great deal of a business owner’s time. But all of that is unnecessary until you are making sales. Without sales, all of that is merely a drain on finances.

Instead, focus on the customer. The acronym FOCUS — Focus On Customer Until Sold — is a good way to remember that. You must know your customer inside and out. Who are they? Why will they buy from you? Why should they choose to buy from you and not your competitors? What do you need to do to reach those potential customers? What will convince them to buy now? What do you need to give them when they buy?

Once you have the customer-to-sold equation solidly in place, you have revenue as well as the luxury of time and capital to grow other parts of your business. Customers really don’t care if you have fancy stationery or a nice office. What they DO care about is what your product or service can do for them. Get that right, and growing your business is easy.

October 3, 2012 No Comments

Customer-Centric Business Model

To grow your business, you might need to adjust your business model. A business model is the structure, focus, and operational methodology of your business.

Business growth usually means paying more attention to customers. If you do not have a customer-centric business model that is tightly focused on attracting, delighting, and maintaining customers, you might want to make some changes so that it is. Depending on your industry, that concentration on meeting customers’ needs can result in exponential growth.

In software development, for example, a customer-centric business model means that no project is undertaken unless there is absolute certainty that there are customers clamoring for that software. Developing a software program just because it’s “cool” is not enough anymore. The market must clearly express a need or problem for which your product is the solution.

A Joint Application Development (JAD) model for software development involves every department of the company in the development process. There are regular cross-functional meetings where representatives from finance, HR, customer support, QA, marketing, sales, and development get together to plan, troubleshoot, and support the development of the product. In this way, each area of the company has a stake, and a vested interest, in the success of the project.

Also called an integrated business model, this way of working together to get, keep, and satisfy customers ensures strong customer loyalty and that there are no surprises for the company.

A customer-centric business model takes the focus off the product or service, and puts it squarely and continually on the customer. Remember, to build a better mouse trap, it’s not about making it better for the mouse, but making it much better for the customer who has a mouse problem.