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Are you chasing the latest growth fad? Hoping that the newest social media network is going to provide the “green field” that will allow you to expand your business, but really not knowing how to exploit that channel to market?
With all the talk about strategy and tactics, the business industry has created an entire curriculum based upon the principles and foundations that are required for a business to grow. There are literally hundreds of articles that talk about growth as if it’s this extremely complex principle that need to be pontificated upon until our ears bleed.
Frankly, this is not the case.
Let’s cut this to be bare bones. To its simplest form.
And…I’m not going to reinvent the wheel.
I pulled out one of the clearest presentations on business growth that I have found, and am breaking out just a couple of points to consider.
Here are the cardinal rules for growing your business according to Jay Abraham:
Leveraging these 3 cardinal rules will allow your business to expand significantly, without significant leaps required in any one area.
Simple, straight forward, and able for anyone to understand what needs to be focused upon to grow their business.
As a business owner, I would expect that you are very goal oriented. So, given your current situation, you may be looking at the three cardinal rules, and making the decision to tackle one of them right away.
Your feeling that you don’t have enough time as it is, and another project may put you over the edge.
STOP!
This is one of the critical mistakes that small business owners make when they are working to grow and scale their business.
Focusing on one of the three rules, while good for your business, will rob you of the growth potential by addressing all three.
What? No, really. This doesn’t mean scrap your business. This doesn’t mean start over. This doesn’t mean that you have this mammoth project facing your business…
This DOES mean you should make incremental improvements (say 10% to stay consistent with Jay’s presentation) to all three cardinal rules, and you will have the potential to more than double your business.
Don’t believe me? Ok, let’s return to the presentation and run the math!
For those of us who are very systematic in our approach to business growth, here’s the straight-forward application of the 3 cardinal growth rules. With a very low growth factor of 10%.
The chart below shows incremental improvement in all 3 areas of 10%. The numbers have obviously been simplified for clarity and communication, but the compounding effect of working all three areas should definitely get your attention.
The key point that I want you to remember is:
Small and incremental growth across all three areas delivers a compounding impact upon the growth of your business!
Small discrete gains that impact each of the key factors in your growth plan provides a path to significant growth that cannot be achieved by narrowing your focus and working on a single thread.
Taking the above example if you only focus on adding 10% to your client base, you would succeed in adding $10,000 to your business, and miss on the additional $56,000 available if you had addressed all three factors.
I’m not even going to talk about the 33% Increase…but it gives you an idea of how powerful this actually is.
Notice that none of the numbers presented in the model are something that requires extraordinary skills, talent, or resources to accomplish. They are simply incremental improvements on the business that you are currently running.
NOTE: There’s a lot of text on this slide. It’s chart 6 in the full presentation below, or you can click to expand.
Jay covers three areas to Grow Your Client Base:
There are a number of great building blocks in here that provides a large number of paths that can be chose to drive a 10% growth in your client base.
In my experience here are several items off of Jay’s list that I spend a lot of time working with business owners to either implement or refine:
One common thread that is driving client acquisition is the ability to provide value to you clients before you ask for a sale. Help your prospective clients with a real problem, and the relationship develops to a point where they wouldn’t consider going to your competitor.
Let’s get the obvious out of the way. The easiest way to increase transaction value is to….increase your prices. This may be appropriate for your market and products, and may work wonderfully.
I would pose another option for you to consider….bundling.
Packaging complementary products and services together. This is similar to cross-selling or up-selling, and could use the same type of processes to accomplish that objective.
Taking the time to clearly document your sales funnel, and have a series of products and services available for purchase provides a natural flow for your customers to purchase more than 1 product at a time.
A great example of this bundling is Amazon.com. When you make a purchase, you see at the bottom of your page the “Other’s bought” section. This is a simple way for Amazon to increase their average transaction value.
I recommend using your “Thank You” page as an ideal location to bundle (up-sell or cross-sell). Your buyer has just made a purchase, so take advantage of that situation and add value at that time. This presents pure upside and profit for your business. Don’t let it pass!
Transaction frequency can be very dependent upon your specific product or service; however, there are multiple ways to accomplish this cardinal rule. And….if you really want to serve your customers, finding methods to stay engaged with your previous buyers should be a high priority.
Historically, about 75-80% of a small business’ revenue comes from existing customers. Why wouldn’t you engage them as much as possible?
I am a strong believer in having multiple product offerings available. This model enables the client to engage at a level that they are comfortable and provides the ability to upsell as well as maximize your profit. This also enables your current customers to continue to purchase products from a source that they trust.
If you are struggling for different levels of products or services, work with partners, other businesses, or affiliates to bring additional price points and value.
To really develop an increase in transaction frequency, you must engage your customers and provide value in situations other than just when you want to make a sale. This is a prime opportunity for distributing blog content (related to your products or services) or email that addresses the problems that your customers are facing.
Focusing on communication with your clients, customers, and potential customers provides significant insight into the products and services that they need to address their pain points. It takes some effort, but the return to you and your business significantly exceeds your investment.
Did you find this breakdown of the 3 Cardinal Growth Rules useful? Are you able to apply it to your business? Let me know what your thoughts are on this article here.
This is why I created this site. I want people to be more in touch with other entrepreneurs and realize that there’s a lot of things that we can learn from one another. I’d love to hear from you and create a community of business building enthusiasts where any execution blueprint is just a click away.
Use the same Excel template shown, and jumpstart your action!