If you are like most businesses, you manage your factories, products and br ands with precision, efficiency and care. You develop new products, you renovate your packs, define new communication concepts and exp and your distribution. However, if you are like most businesses, you also sometimes forget that the secret ingredient to growth, is not (only) your products or the services you offer; it is your customers. Underst and them, surprise and delight them and your business will remain healthy.
I recently spoke to a company with exactly this dilemma, how to grow their very successful business even further. Having thought about possible solutions for them, I decided to share some of the ideas I came up with, as I’m sure that you too will find them useful.
The 5 ways to grow
- Get more customers
- Get current customers to buy more
- Get current customers to spend more
- Reduce costs
- Increase margins
Notice that three of these are directly linked to the customer, so that is why I refer to them as the secret ingredient to growth. I’m not discounting the other two, but arguably they take longer to action and see results, so for quicker impact, let’s concentrate on the customer.
Get more customers
In order to get more customers you first need to learn who buys and why, as well as who doesn’t and why. In the latter group we also need to separate those who buy from a competitor and those who don’t buy the category at all. To underst and these three groups, you will need to gather information on the customers, as much and as deeply as you can. For more on this, please check out a recent post on the topic “13 things your boss expects you to know about your customer”
The other essential to underst anding how to get more customers, is to know what your br and st ands for, its image and equity. By comparing these between the three groups, you will get clear indications of what needs to be changed and how to influence them. You will see why one group buys and the other doesn’t buy your br and, and perhaps also a better underst anding of why some don’t buy the category at all and that’s not always as easy as just a lack of the relevant need.
Get current customers to buy more
There are several ways to get your current customers to buy more; they could buy bigger quantities when they do buy, or just buy the same quantity but more frequently. In some industries there are a finite number of occasions or quantities that can be bought, but I have found that these limitations are often not as strict as many businesses think they are:
- Whilst a person can only be on one plane at a time, they could fly with friends or family, or use the airline for more trips
- A person can only eat one lunch or dinner, but your product could be served more than once a week / month
- Someone may only have one car to insure, but would also need insurance for themselves, their family, pets, house or apartment
- A housewife only needs a few pots and pans, or one food mixer, but she could be interested in buying specialised plates, serving dishes or equipment for particular meals or ethnic food preparation
When you underst and your customers better, these alternative product offerings become much more easily identifiable. In addition, since they are already customers, you should also have hopefully gained their trust, which makes them more open to purchasing again from you. And don’t forget the 80/20 Rule or Pareto’s principle, which often applies to business:
“80% of your business comes from 20% of your customers”
Concentrate on those 20% and ensure you satisfy their current needs and endeavour to identify their future needs too – which brings me nicely to the next solution.
Get current customers to spend more
Getting your customers to spend more can be as simple as mentioned above, through them simply buying more quantity, or by upgrading what they buy to a more expensive product or service. There is, however, both good and bad news for you in this.
The good news is that perhaps surprisingly, ever since the recession, customers are willing to spend more on certain categories than they did in the past. Whilst they struggle to make ordinary day-to-day purchases, they correspondingly splash out occasionally and treat themselves with better quality products and services from time to time. If you underst and this, then you can be there where and when the urge hits them.
The bad news is that in reaction to declining sales, even before the recession, many companies started promoting more or dropping their prices. Once you have conditioned your customers to expect these lower prices, you are on the slippery slope to br and hell, as described in “Are you on the way to br and heaven or hell?”
So there it is. Customers are the secret ingredient to br and and business success. Think customer first and market share and profit will follow.
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