This was the topic of my presentation to an exciting group of entrepreneurs earlier today. Think about this topic and the things I shared with them, I realize this information would be useful to a lot of people. Some of those people are reading this directly, and some others need to refer people to this link so that they can come and read as well. In the next few days, I have a few “How to’s” in my mind to share. These are really easy things that if you know and practice can make a lot of difference in your business and in your life.
The first ground rule however, if you truly want to learn, is to first empty your cup. You will not learn anything new, if you assume you already know. Knowledge or the assumption of it, is the greatest hindrance to more knowledge. As teacher students – the most excellent type of student, the one that listens to become a teacher, we must constantly humble ourselves and learn. We must not let knowledge puff us up and make us resistant to new information. The day the seal of knowledge locks our ears, is the day we become useless and irrelevant to new possibilities around us. 20yrs experience as an employee does not equate to years of experience running a business. Sometimes the way up, is down. Never let any level of knowledge rob you of what you don’t know. There is no fool, like an old fool. Once you have laid aside your prejudices, let’s delve into how you can expand your business.
At the heart of every business is the exchange of value for revenue. Every business sells, either a product, a service, an experience or whatever. At the other side of every seller is a buyer. Business growth and expansion invariably is connected with increased profit. With these realizations clear, there is a simple formula that shows clearly how businesses function and how they can be made to grow.
No of Leads X Leads Conversion = Customers
Customers X Number of Transactions X Price Per Sale = Total Revenue
Total Revenue X Margins = Profit.
People get into business for various reasons, but the lifeblood of any business is profit. Profit is what makes a business able to continue and last. It’s like breath, we don’t live to breathe, but if we cannot breathe, we are not living for anything. Profit is the lifeblood of business, it’s the attribute that makes you able to continue to pursue all the other grandiose possibilities. It’s the bottom line. To keep our business growing and sustainable, there are 4 key factors we must pay attention to.
1. Generating Leads
Leads are the raw materials customers are made from. You can’t have more customers than the leads you are generating. Your leads are the people who indicated some level of interest in your business. They are the people who strolled into your shop to ask for your product on display. They are the people who responded to your advert or your promotion. They are interested buyers. If your business ever grows, it’s because you were able to generate in 4 key segments of your business. The first and foundational place is generating leads.
Do you measure your leads? Do you know how many leads you generate daily, weekly, monthly? How many people’s interests or curiosities are you steering towards your product? Do you have any lead generation strategies? Why will anybody be interested in your product? Are you running any promotions? Any adverts? Don’t be giving your smiles in the dark, create awareness for your product and generate leads. There are many ways to generate leads, many really cheap ways. I can offer you personalized support.
After you have ensured that the leads keep rolling in, the next real challenge is conversion. This is where the concept of law of averages matters. Every human being starts out in life with a particular average. Your average is the number of people you need to wade through to get a yes. When we start out, it’s small and worrisome, but as we understand the terrain and sharpen our skills, or averages rise. If 100 leads come in monthly and you are able to convert 10, your average is 1/10. Once your leads are coming as you plan, you need to ensure that you develop your average. Invest time in understanding the needs and requirements of a buyer and make use of it.
Sales conversion is a big topic on it’s own. It’s something you need to learn and develop more. It all starts with knowing that this is a crucial factor and measuring progress as you progress. Conversion is where the efforts in lead generation are seen to be worth it.
3. Customer Retention
After I buy from you, if I buy from you 🙂 what in your business will make me come back? How do you ensure I come back? Organizations are perfectly designed for the results they achieve. If there is no advantage to coming back, it means the business owner has designed the business for people not to come back. If you want to expand your business, you need to have customer retention strategies. Offer discounts on repeat purchases, give gift vouchers when people buy certain quantities, create an environment people want to come back to.
Retained Customers are your biggest assets. Let your design show that you value repeat business. Loyalty programs e.t.c.
It is interesting how this very wonderful concept which is critical to the success of many greats before now, can be so miss understood. The highest level your business can go is not only if you retain customers, but for your customers to become advocates and champions of your products.
In the account of one of the greatest sales men the world has ever seen that I read, his secret of success was simply giving flowers and recognition to customers when they give him a referrals. The little things count. Find a way of ensuring that people who experience you find it exciting to tell someone else about it. This singular concept is why Network Marketing is becoming a global phenomenum with unthinkable wealthy men and systems patronizing it. Referrals are good, and you’ll be surprised by how much more your business will grow if you empower people to promote our business to others.
If you are keen on expanding your business focus on any or all of these 4 areas. I wish you an expanded business!