Many people imagine there are hundreds or even thousands of ways to grow a business. In fact, growing your business boils down to just three methods:

1. Increasing the number of customers you have
2. Increasing your average transaction value
3. Increasing purchase frequency

1. Increasing The Number Of Customers You Have

The first place many businesses look for growth is by winning more customers. The number of customers you have is a function of:

• The number of customers you have right now
• The number of customers you lose
• The number of prospects you attract and convert to new customers

Growing your business by increasing the number of customers by improving customer retention, attracting more sales leads, and improving conversion rates.

Improving Customer Retention

If you are currently losing 20% of your customers each year and you can stop half of them from leaving through better service, relationship management, and communications, that's the same as growing your customer base by 10%.

Plus, improving customer retention can be less expensive, take less time, and be less risky than acquiring new customers.

The first step to improving customer retention is to focus on why customers are leaving.

Attracting More Sales Leads

To attract more sales leads, you can do two things:

1. Optimize your advertising and promotions using continual testing and measuring to improve results
2. Use more marketing channels to gain access to more prospects (for example, if you rely on just direct sales and word of mouth, add Internet marketing, direct mail, and print advertising to access and attract more qualified buyers)

Improving Conversion Rates

The next way to grow your business by increasing customers is to improve your prospect-to-buyer conversion rate.

This can be done through:

• Qualifying leads up front
• Improving the sales and follow-up skills of your sales staff
• Making an irresistible offer
• Educating your prospects with compelling "reasons why" they should buy

2. Increasing Your Average Transaction Value

There are a number of ways to grow your business by increasing your average transaction value:

1. Increase Your Pricing

People are often stunned when raising prices doesn't hurt response and orders keep coming in strong. They discover price is not the main reason people buy from them while they increase profits by raising their price.

Other people find that by raising prices they attract more desirable customers while they shed the price shoppers and bad clients. The net gain is more profit and better customers.

2. Up-Sell And Cross-Sell

Once you've spent the time and money to attract someone to the point of buying, you have an opportunity to offer them even more value with up-sells and cross-sells.

Up-selling is when you offer a person a chance to buy something better and more expensive than the product or service they are about to buy.

Cross-selling is when you offer something in addition to that main purchase.

Remember two of the most profitable questions in the history of marketing:

"Do you want to super size that?" (up-sell)
"Would you like fries with that?" (cross-sell)

On average, you'll find that up to 30% of your buyers will increase their transaction size just because you ask.

Other ways to increase your average transaction size include: grouping or bundling related products and services together and offering them at a higher price point, and offering larger units of purchase.

3. Increasing Purchase Frequency

The third way to grow your business is to increase the number of times your customers buy from you.

Using ongoing marketing communications that promote your products or services, you can:

• Develop a "back-end" to sell additional, related products and services over time
• Run special events ("closed-door" sales, preferred-customer offers, etc.)
• Communicate personally with your clients or customers by phone, mail or email to maintain a strong, positive relationship
• Sell or endorse other people's products or services by deciding what other products or services could benefit your customers, then making deals with suppliers of those products or services
• "Program" your customers to buy more frequently (for example, if purchasing your product or service more frequently is a benefit to your customers, make an attractive offer for them to commit a recurring purchase plan)
  

Big Idea offers a suite of programs and tactics to help you grow your business using all three of the methods above: increasing the number of customers you have, increasing your average transaction value, and increasing purchase frequency.

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