How to Create A 'Double Your Business' Growth Plan
The combined subjects of marketing and sales are vast; a search on amazon.co.uk on these topics together yields almost half a million book results.
This article, the second of three about creating substantial growth for your business, explains the elements of your 'Growth Engine' - the core strategies for marketing and sales that have already helped my clients to achieve extraordinary successes (here's a few case-studies).
Think of marketing and sales as a system, like a conveyor belt, that finds people in your target market and moves them from target audience all the way through to long-term repeat customers.
That is the job of your marketing and sales process, and it is this that will power the long-term expansion and success of your business. It’s why I call it your Growth Engine.
1. The Marketing and Sales Growth Formulas
While it’s true that you need to attract new customers, the wise entrepreneur understands the value of maximising the potential of all customers, both new and old. Understanding this is essential to extracting the highest sales, increasing your profits and delivering growth, whatever your business and sector.
These two Growth Formulas are simple equations to help you visualise the potential in your business. There is a third Growth Formula, but I'll cover that another time.
Growth Formula 1 - The Customer Acquisition Formula
Number of Leads x Conversion Rate % = New Customers
The two figures that make up the left hand side of the formula happen in every kind of business...
- Leads are the people who show an interest in buying from your business. They are the customers who talk to your staff, the visitors to your website, the phone call enquiring about prices.
- Your Conversion Rate is the percentage of these who buy from you. So if 100 people come into your shop and 15 buy something, your conversion rate is 15%
Growth Formula 2 - The Sales Growth Formula
Number of Customers x Average Transaction Value x Average Number of Sales = Turnover
This formula demonstrates how you can maximise your sales. The numbers on the left are the factors involved in your Turnover. They are...
- The Number of Customers you have, including new customers and, importantly, all of your existing customers too.
- Average Transaction Value is how much a typical customer spends each time they buy from you
- Average Number of Sales is the number of times per year they buy from you. It's the frequency of repeat purchases.
In various studies, it turns out that it costs about 6 times more to win a new customer than making a repeat sale to an existing customer. Or to put that another way, you can produce 6 times the sales by focusing on selling to your existing customers instead of constantly chasing new customers.
Do both of these effectively and you will build a growing pool of highly profitable customers.
Why The Growth Formulas Matter…
Because the power of multiplication is involved, your figures grow really quickly when you add small amounts to each part.
If you could improve your leads, conversion rate, average transaction value and average number of sales by just 19% each, you would DOUBLE your turnover.
Of course, there will be some things that might be difficult to improve by that much, and there will be other things that will improve far more, but when you understand these formulas for growth, doubling your business doesn’t look quite so hard, does it?
2. Measure Your Results, Tune Your Process
The purpose of your marketing is to produce leads and enquiries for your business, to feed the sales process that then converts them into sales. It may even go as far as replacing the salespeople in your business, doing everything from attracting new potential customers to closing the deal.
In order to produce optimum results from your marketing and sales, you must create a feedback cycle, where you measure the results of each thing you try and then seek to improve those parts that are letting you down.
The measurements you create must always be tied to Return On Investment (ROI), so that you know for every pound spent on marketing or sales efforts, you’re making more back in profit. And when you discover things you’re doing that make no profit, simply stop doing them.
This sounds simple (and in fact, it can be very straightforward), yet the vast majority of businesses are not doing it. They think they know what works, but there’s no measurement, no feedback cycle.
When you make your marketing more efficient than your competitors, you’ll be able to out-market and out-perform them because it will cost you less to win customers than it’s costing them.
Achieve this and you’ll be able to ‘buy’ more customers for less expense, giving your business a massive advantage over your competition.
3. Differentiation - Make Your Business Stand Out
The first article in this series of three to make your business grow, is about your business strategy. If you get that part wrong, then your marketing and sales will have to work far harder than they should to produce anything better than average results.
The job of your strategy is to position your products and services within a viable target market to create strong demand.
And positioning is really about differentiating your products/services to be the most desirable of their type to the people you are targeting. In Unique Selling Point - Blessed Are The Cheesemakers, I wrote about how several businesses have created a unique selling point in the highly competitive dairy market of milk, cheeses and butters.
The most famous and often-quoted marketer is David Ogilvy, who created the Ogilvy and Mather advertising agency. Tasked with the job of selling a new soap called Dove in the 1950s, he chose to promote it to women with the positioning that it would not just clean them, but also moisturise their skin to keep it soft.
That positioning is still used today, over 60 years later. Ogilvy could have chosen to position Dove as a soap for men with filthy hands, but he didn’t. That decision not only influenced the marketing ever since, it has also fed into the development of the product, its packaging, pricing and promotion through the years.
Ogilvy’s positioning of Dove was based upon a real difference in the product, and this is at the heart of differentiating your business.
It’s not the job of marketing to tell lies or boast about your product - instead it must amplify some real advantage of your product/service so that your customers will desire them because of it.
To put it plainly, marketing can't make a silk purse out of a sow's ear, as my Dad would have said.
To make your business become truly successful, make it more valuable to your customers than your competition. For more insights into this, refer to the first article about business strategy.
Ultimately, if you want your business to compete effectively, you’ve got to earn your place in the market. What’s special about your business, and why should I buy from you, rather than going to your competitors?
If you cannot answer this question, your business will struggle.
4. Writing Adverts is 'Salesmanship in Print'
Advertising is ‘salesmanship in print’, according to John E. Kennedy, one of the greatest marketers of the early 20th century. And that definition is as true today, whether you are advertising in paper media or on the Internet, as it was in 1904 when he first wrote it to win a job working for Albert Lasker, the head of an advertising agency.
Unfortunately most small businesses, including many with sales in the millions, persist in using their business name as their headline, rather than making the adverts all about what their customers would want to hear. Here’s an example of an advert that you might typically see (I created this for my book, Double Your Business).
Unfortunately most small businesses, including many with sales in the millions, persist in using their business name as their headline, rather than making the adverts all about what their customers would have some interest in.
Here’s an example of an advert that you might typically see, created for my book, Double Your Business.
In the rewritten advert, you can see that it's very clearly trying to attract home-based businesses.
I've also marked it up with the elements of AIDA - an old advertising adage that ensures you've got four essential elements covered in your copy...
- Attention - does the advert get the attention of the people you want as customers?
- Interest - will the advert be interesting enough to keep them reading?
- Desire - will they want what you're selling as a result of the way you've explained it (remember - salesmanship in print)
- Action - do they know how to buy it, or take the next step?
I'm sure you can see immediately the improvement in the advert example above. And realise that with a little help, your adverts could be improved too?
Time and money invested in quality copywriting will repay you time and time again. A good advert can be run almost continually, often for many years, to keep new customers feeding into your business and building your sales.
One of the 'secret weapons' to helping my clients achieve great results has been my ability as a copywriter, helping them to create sharp, effective adverts that really get the best out of their business.
For example, Tom McCullough’s small-town pharmacy grew by 40% in eight months. This was in large part thanks to the sales copy we created together to attract new care-home clients.
5. Choose Scalable Marketing Channels
It's easy to generate the odd lead or two from almost any marketing channel. But if you're after serious growth, you need marketing that will scale - delivering the volume of leads at a predictable rate to keep your operations team (and sales force, if you have one) busy.
But - there are precious few marketing channels that scale sufficiently to produce quality leads in sufficient volume to drive real growth. And choosing the right one depends upon your target audience.
If they’re looking for what you sell online, then paid platforms like Adwords or Search Engine Optimisation (SEO) can be very effective at showing them your offer when they search for what you sell. That’s how we grew varooma.com from startup to it’s first million in sales in around 12 months.
If you are targeting customers who are not looking for what you sell, you need to use methods that get your message in front of them at some other time. Direct mail can be incredibly effective for marketing your business, especially b2b, despite being 'old-fashioned' and out of favour with many businesses. Facebook's also a great way but so can Facebook if you want to do it online, too.
Whatever channel you choose, seek to become the master of that channel, rather than playing ‘marketing bingo’ and trying out one idea after another, never giving any channel the level of effort or time required to learn it well enough to become a master of it.
Being an expert in one marketing channel that can scale for your business is far better than hopping through lots of ideas without having the skill to make any of them work.
6. Sell With Systems, Not Pot Luck
Whether you sell directly yourself (or have salespeople) or via your website, you need to use a selling system.
If you just rely upon the unknown abilities of the people you hire or the web developer’s creativity, your sales performance will have no science to it - it will be a gamble - pot luck.
There is a process to convert an enquiry, prospect or website visitor from being cool and vaguely interested into an engaged and interested customer.
Building that process into the way you work gives you the opportunity to measure performance at each step. Then you can identify where sales slip away, so you can tune and perfect the process, optimising your conversion rate and increasing sales as you go.
If you employ sales people, you need a method for managing them - how you recruit and train them; how you set their targets, how you motivate them, what activity levels you expect of them, how you deal with under-performance, how much basic you pay, what commission scheme you use, and so on.
For selling on the web, you’ll use analytics goals, tracking pixels and conversion codes to monitor which traffic converts the best, what route they take, and so on. You’ll have a process for split-testing and continual improvement of your sales pages, and you’ll test out different strategies to see what works the best. You may even introduce special landing and sales pages for traffic from different sources.
7. Sell Them Again, And Sell Them More With Your Back-End
At the beginning of this article, I introduced the Sales Growth Formulas. They demonstrate the massive growth unlock in your business when you increase the value of your average sales and sell more frequently to each customer.
It’s through selling more to every customer, and getting them to buy again and again, that your business growth will become exponential.
A business that can only sell once to a customer has to work very hard to keep filling the pipeline with new customers - it’s a bit like a river running by - when the water has passed, you've lost it forever.
On the other hand, when you can sell to the same customers again and again, it’s a bit like you’ve built a reservoir to stop that river passing you by. Every new customer you win makes your reservoir deeper and increases your turnover forever.
Need help to improve your marketing and sales?
Click here to get in touch and request a 45 minute business strategy session, where we can talk about the strategies required to build your Growth Engine, and figure out whether we should be working together to grow your business.