If you own and run a successful small business then congratulations, it is not an easy thing to do! However, if you are looking to grow your business, there are four bonafide strategies you can employ to increase your revenue.
Now, we know what you must be thinking, “Only four ways? Surely there are hundreds of ways of growing your business!” However, when you think about it, there are only two vectors you have any control over when expanding your business: the market and the product.
You can either get more from your existing customers, acquire new customers, diversify your product range or develop existing products. Let’s take a more detailed look at each of these!
1. Market Penetration – Getting More From Your Existing Customers
Don’t giggle! We’re very serious about this one. Market penetration is one of the first things to consider when looking to grow your business. Getting your existing customers purchase more of what they are already buying is one of the simplest and most cost-effective measures you can employ.
Examples of market penetration might be volume discounts, or introducing loyalty programs. A real world scenario would be major supermarkets that are constantly offering 2 for 1 deals to the shoppers.
According to research by Frederick Reichheld in his book The Loyalty Effect, even a 5% retention rate can increase sales by 125%!
2. Product Development – Create More Products For Your Existing Customers
The solution that many companies reach for is developing new products and services that they believe will appeal to their current customers. There are two ways to do this: introduced an improved version of an existing product, or secondly your can risk creating an entirely new product.
Apple are great at employing the technique of introducing improved products. An example of this might be the iPhone or MacBook, where new models are constantly being produced, often with very little difference in improvement. However, the desire for the newest consumer good, drives sales.
Sometimes a brand might create a new product or service to complement their existing services. Yet again, Apple did this with the iPod, when previously they were known for their desktops and laptops.
3. Market Development – Finding New Customers To Buy Your Existing Products
This is where things get tricky. After all, typically, the only way to get new customers is to steal them from your competitors. Although most people think that this is what marketing and advertising professionals spend the most of their time trying to do, it is actually one of the least desirable ways to grow your business and raise revenue.
This method can be very expensive. Some sources suggest that it may cost up to six times more to win a new customer than it would to get more from your existing clients. If you spend too much time trying to steal other customers, you may find that it could affect your growth negatively.
As Oprah Winfrey says, “Be thankful for what you have; you’ll end up having more.”
4. Diversification – New Products, New Customers, New Business
The last option is to expand into new markets. This is an option for those who feel they have reached a glass ceiling in their own business. However, it doesn’t mean having to get into an entirely new industry. Diversification could include taking your business online?
Many businesses have found that taking their businesses away from brick and mortar establishments has worked out very well for them. You may also want to target audiences with new products, such as cosmetics for men or gaming for women. Both of these are examples of gender specific products being twisted on their heads.