Are you looking for ways to grow your business without spending money? With the right strategies, tactics, and know-how, it is possible. Here are seven tips to help you build your business, increase customers, and reach greater success.
This blog will explore these methods using seven easy-to-implement methods of quickly increasing profitability through optimising your business.
The Impact Business Optimisation Can Make
Let’s start by discussing why always trying to improve your business is important and what a big impact it can have.
Below is a simplified business model from leads to sales and a basic Profit and Loss.
Starting with 100 leads with a 20% conversion rate, an average transaction size of £100, variable costs of £40 per sale and fixed costs of £200 per month.
This scenario results in a £1000 profit. That’s a pretty good operating margin.
Now let’s analyse look happens when you improve each core metric by just 5%. This results in a 66% increase in profits.
This shows you what can happen when you optimise your business. Imagine what is possible if you find a way to improve them by 10%, 20% or even more.
Now let’s go a bit deeper and look at how you can improve these seven metrics.
There are four main ways to improve sales in your business.
- More Leads
- Increasing your conversion rate
- Increasing Average Transaction Value
- Increasing the Number Of Transactions
1. More Leads
A lead Is someone in your target demographic and market who has expressed a need and is open to learning more about your product or service.
Before a customer becomes a customer, they will usually become a lead beforehand. Understanding how much you pay for a lead is essential to running and growing your business.
You need to understand how much new leads and prospects are worth to your business. A simple calculation to determine how much you pay for leads is dividing your monthly marketing spend by the number of new leads you get each month.
A simple way to improve your cost per lead is to ensure all marketing channels are measurable.
Test and find out what works for you and amplify any areas producing results. Cut out any areas that do not bring in tangible results.
How To Grow The Number Of Leads
Marketing is different from what it used to be. It’s less about getting your name out there and more about creating engagement with a chosen audience through relevant content. With social media being such a big part of so many people’s daily lives, it has become an excellent platform for businesses to connect with their target audience.
Nowadays, marketing is not just about buying advertisements; it also includes creating quality content that resonates with your audience.
This content can be articles, videos, podcasts, and more. Because of the prevalence of social media, finding and connecting with like-minded individuals has become easier. Marketing through social media is also an excellent way to find people who may become future customers. You can form relationships with these people by providing them with content that they find interesting, helpful, and/or entertaining. You can also gain their trust and respect by participating in conversations in relevant online groups.
Create an Email List
One of the easiest ways to grow your business is by creating an email list. You can use tools such as MailChimp to create an email list. Once you’ve done so, send out emails with offers, promotions, and other relevant information.
Build Relationships with Influencers
Another way to grow your business is to build relationships with influencers. This means finding influential people in your industry and building relationships with them. These influencers can help promote your brand and products through social media channels.
Start a Blog
A blog is an excellent way to start growing your business. It’s also a great place to keep up with current trends and news in your industry. You can use a free blogging platform like WordPress or Tumblr to start your own blog. If you’re looking for more advanced features, consider using a paid service like Wix or Weebly.
Find Customers through Social Media
One of the easiest ways to find new customers is through social media. Start by creating a Facebook Page for your business. Then, post regularly to engage with your followers.
Offer Free Trials
Offer a free trial period if you’re offering a product or service. This will allow potential customers to try out your product or service before committing to buying it. You can also use this opportunity to build trust with your audience.
2. Improving Conversion Rates
Conversion rates are “the success” rate where you get a person to complete your desired action. An example of this is pay per click (PPC) campaign where you want them to buy a product.
To improve conversion rates, you have to analyse why people are not doing what you want them to do and make changes. Sometimes small changes make the difference, but to make significant improvements, you need to be prepared to make drastic changes.
Focus on User Experience
Businesses have been focused on the needs of their customers for centuries now. But, in the modern business world, the focus is no longer just on what customers need; it’s also on what customers want.
Successful companies will have tapped into the desires of their customers through their brand promise, product offerings, pricing, and more. They will focus on creating a positive user experience for their customers at every touchpoint. This is where the rubber meets the road for your customers when they engage with your product or service.
You must nail the user experience because it’s the only way to ensure that customers will be happy with their purchase, leading to repeat business and referrals.
3. Sales From Old Customers
“A 5% reduction in the customer defection rate can increase profits by 5 – 95%” –Bain & Company.
Keeping your customers happy should be a priority for your business. Old customers are not always lost. They need a good reason to return.
Try to re-engage your old customers.
Firstly find out why they left your business in the first place.
Secondly, please provide them with assurances that these issues have been addressed and provide them with an offer that entices them to return.
4. Upselling & Increasing Prices
“55% of customers would pay extra to guarantee a better service,” – Defaqto research.
Most customers buy based on value rather than price.
If you are doing a great job in providing value for your existing customers, it would be wise to quantify what your goods or services are worth.
You may find out that even if you raise the price by 10%, your customer will still consider it value for money.
Find a “biting point” for your price increase that doesn’t affect volumes.
Even if it affects volumes, you will make more of a profit on each transaction.
“The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20%” – Marketing Metrics.
Your best customers are your existing customers. Find new ways to deepen your relationship with existing customers to improve their experience further.
One thing that has become very clear in the modern business world is that companies need to collaborate with more businesses. Customers want to do business with brands at the forefront of their industries. If your business is not at the forefront, you will have a lot of work ahead of you.
This is where partnering with other businesses can be a great strategy. You can form partnerships with other businesses in your industry or businesses in other industries with a large following.
You should identify businesses with a large following that would fit your brand well. Then, reach out to those businesses and let them know you would be interested in forming a partnership.
There are plenty of ways that you can partner with other businesses. You can create content together and share it with each of your audiences. You can refer customers back and forth between your two businesses. You can also share each other’s products and services.
You only incur variable costs when making or selling a product.
They are based on your consumption.
Many costs have fixed and variable cost components.
Examples of variable costs are:
- Some staffing costs
- Raw Materials & Packaging
It would be best to determine which variable costs impact the most when trying to keep costs down.
Strip out anything that does not add value to the business.
Fixed costs like rent or insurance are fixed every month or year.
Fixed costs should be kept to a minimum, making your business cost base agile and allowing you to increase or decrease expenditure depending on when you are busy.
Start by reviewing your long-term fixed contracts and agree on flexible contracts as soon as possible.
Challenge your fixed costs. Do you need what you are buying?
Remember, your aim should be to provide as much value to your customers as possible. Anything that doesn’t add to their experience has the potential to be eliminated.
Where possible, treat staff as a variable cost, not a fixed cost.
Every company has permanent employees that contribute less than they can.
To eliminate the problem of not getting value for money by employing staff on a fixed-term contract of 6 months to 2 years.
Finding new ways to grow your business is fundamental to being a business owner.
The market constantly changes, so you need to take time out each month to review how your business will overcome the challenges ahead and take advantage of your opportunities.
The seven steps in this blog will provide you with some quick ways to improve your bottom line. Still, these improvements will only be short-lived if you do not invest in integrating business optimisation into your culture.