While there are several ways in which you can grow your business, they’re not all going to offer the same amount of success. In fact, when it comes down to it, the only strategies and tactics that matter are the ones that are going to deliver the right results.
These are the ones that will do one of three things that will contribute to developing your company. This includes increasing your customers, the size of your transactions, as well as the frequency at which customers make their purchases. These are the vital components that will help your firm to achieve growth. Everything else is irrelevant.
Focusing on the Right Strategies
Now, most businesses will place the focus on increasing the amount of customers they have. After all, they are the ones that bring in the money, so it makes sense to start here. For most, it will seem like the quickest and most obvious way to achieve results.
While this can work, it’s not the best strategy. It doesn’t make the best use of your resources, and it just involves more risk in the long term.
Consider an explanation put forth by Jay Abraham, the leading business growth advisor in the U.S., in which he discusses how optimising each of these outcomes at the same time will not only lower your risks but also lead to far better results.
In an interview with Tony Robbins, he explains how if you only focus on one of those outcomes, such as increasing number of customers, you can achieve linear growth. However, if you do a combination of the three, your growth will be exponential.
Most companies, without focusing on any one result or having any understanding of the dynamics, will have reached the stage where they have a finite amount of clients. Without any interference, such as greater sales efforts by the company, they will have achieved the average, fixed number of sales. These purchases will be made a set number of times unless you do something about it.
If the only change you make is to become a little more efficient or a bit better and skillful at selling, then you could probably raise the number of customers by a bit. If you were more proactive and made an effort to improve your effectiveness in these three areas just by making a few small changes, then you could even double it.
Let’s Take a Closer Look
So, how could you more than double the number of customers you gain, just by focusing on more than one variable? Well, if you do the math, you can see how concentrating on all three areas makes a big difference.
Let’s say a company has 200 customers and each of these makes two purchases a year with an average sale price of $500. Every year, this company would have revenue of $300,000 (200 * 500 * 3).
If you were to increase one of those variables by 10%, what would happen? What about two or three variables? Let’s do the math:
• Say you increase one variable by 10%, sales rise by 10% to $$330,000 (220 * 500 * 3)
• If you increase two variables by 10% each, then sales would rise by 21% to $363,000 (220 * 550 * 3)
• However, if you increase all three by 10% each, then you sales would go up by 33% to $399,300 (220 * 550 * 3.3)
Rather than achieving linear growth, you achieve exponential growth by optimising more than one variable at the one time. This is because you are creating leverage. If you want to achieve growth, then you need to focus on more than one factor at a time.