Marketing For Growth: Part 1 of 3 – Identifying Your Marketing Goals
“What’s the best way to grow my business?” is a question I hear often. There is no one answer – no one-size-fits-all
approach to marketing. Each business must assess its unique situation, opportunities and needs to find the approach that will produce the best results for the least investment.
Before you can develop a marketing plan for growth, your first step is to define what kind of growth you want. Growth needs to be profitable, stable and provide a foundation you can continue to build on in the future. By looking at the various ways your company could grow, you’ll start to focus on the ones that make the most sense for you.
When asked what they want, most business owners respond with “to make more money” or “generate more revenue”. While those are good goals to have in a broad sense, they are meaningless without defining specific ways to achieve them and the various costs associated with those ways.
If the challenge of how to grow your business is one you’re facing, consider these ways to grow, and evaluate which ones make sense for you – both financially and logistically.
Increase the Value of Your Existing Customers. This is an option many business owners neglect in their pursuit of new customers. If you own the type of business where customers make repeat transactions, this should be your first goal in marketing for growth.
Retailers, service providers, restaurants, entertainment venues, financial companies, and insurance brokers are some examples of businesses that should prioritize this as the first goal.
Ask yourself how much growth would you have if you could get each customer to spend just 10% more at every transaction? Then consider what you can you do to get them into your establishments or to schedule your services more often?
Another question to ask is how many of your clients/customers use some of your services but not all? For example, if you own a spa and have customers who only get massages, what can you do to get them to be frequent customers for pedicures and facials? Selling a broader range of your products or services to your existing customers is another way to increase their value.
Another way to get more value from existing customers is to develop an “automatic” purchase item or service, where you make the sale once, then continue to deliver it on a regular basis. For example, a florist can offer an “Always Fresh” plan where a customer signs up to get automatic deliveries of fresh flowers every two weeks. The ongoing transaction benefits the customer, who no longer has to remember to order or purchase fresh flowers and the florist who has a guaranteed on-going sale.
Getting a satisfied customer to spend more with you is much easier, and much less costly, than trying to get a new customer. It’s a quick way to increase your sales and profits.
Improve Your Customer Retention. This is an area that business owners often overlook. Do you know how many customers make one transaction and don’t come back? Do you know why they don’t come back? Take actions to find out why you lose customers. What did your business do to make them look elsewhere for what you provide?
Unless you retain 100% of your customers from year-to-year, you will need to spend money on sources that bring in new customers just to stay the same size.
For some companies, however, it is impossible to retain customers, because the nature of the business is such that one transaction may be sufficient for the customer’s needs for several years.
Car dealers are a great example of this. Statistically, the average consumer replaces a car every three years, although the Bureau of Labor and Statistics indicates that in this economy, people are holding onto cars longer. So a car dealer needs to find an entirely new group of customers each year, while maintaining the loyalty of current customers for several years until they are ready to purchase again. If you’re this type of business, then you have no choice in your goal, it has to be:
Find More Customers. There are several ways to go after more customers.
First, is to attract customers away from your competitors. This goal is called Increasing Your Marketshare. These customers are already buying what you sell – they just aren’t buying it from you. So your marketing focus needs to give them reasons to switch their buying to you.
Another way to find more customers is to create advertising with messages that convince consumers to buy something they have never considered before. This is called Developing a New Market. For this you need to develop compelling reasons why a consumer would use your product, that are different than the reasons you already use in your messages – reasons that are not connecting with them.
Yet another way to find more customers is to expand the territory in which you do business. This is especially effective if there are few companies in these new territories that sell what you do.
If your business doesn’t need a brick and mortar presence to sell products or services, the Internet is an ideal way to expand into new territories. Add the new geographic areas to your website, add key geographic words to your search optimization, and use that to complement any outbound advertising in the new areas.
It can be much easier to expand into an untapped territory than to try to gain more marketshare in a highly competitive territory. The big fish, small pond syndrome can pay off.
For example, years ago, in pre-Internet times, I knew someone who was doing door-to-door sales of vacuum cleaners. He started out in his home territory, which was an urban area that already had multiple retail stores where people could purchase a vacuum cleaner. Needless to say, with all that competition within easy driving distances for consumers, he wasn’t very successful.
Then he decided he would drive into a much more rural area, a little more than hour’s distance from where he lived. In the rural area he had a sale at nearly every house he visited. There were two reasons for this. First, in the rural area, most of the women were stay-at-home moms. There were very few career women or working moms. Second, the convenience of buying a new vacuum from the comforts of their home, instead of driving more than an hour to the city, far outweighed any price advantage those women might have gotten from retail shopping.
So, in determining how you’re going to grow your business, start by looking at the type of business you have, the type of customers you have, their purchasing habits with you, and which methods of growth are best suited for you.