March 2007
Grow Your Business By
Increasing Your Customer Base
Small Business Planning
— 3 Myths
Top Website Mistakes That
Lose You Business
Delegate It
 
Grow Your Business By Increasing Your Customer
Base
It may sound a little simplistic, but there are
really only four fundamental ways to
successfully grow your business - in other words
to make it more valuable. These four ways are:
- Increase the number of customers of the type you want to have.
- Increase the frequency with which customers come back to buy from you.
- Increase the average value of each sale you make.
- Increase the effectiveness of each process in your business.
It’s interesting to contemplate the fact that all of the business development strategies you
might implement will fall into one of these four
categories. Any other strategy that doesn’t
appear to sit in one of these, for example
cutting costs, may help you temporarily, but it
won’t grow your business. Cutting costs will not
make your business more valuable unless you turn
around and re-invest the money you save into one
of the four ways.
In the next few months we’ll devote a story to each of
these ways. This month we deal with strategies
for increasing the number of customers you have.
Develop a unique core differentiator (UCD)
A UCD is the reason why customers buy from YOU,
something you have that is of real value to them
and decides their buying decision in your favor.
You may in fact have several UCDs – different
ones targeted towards different segments of your
customer base.
Good UCDs can come out of simply reviewing the way you
do business and deciding to emphasize some
aspect of what you already do, or of thinking up
a different way of doing it. For instance, if
you run an automobile parts business, you could
offer free same-day delivery of parts ordered
from repair shops within your area – only you
service customers who need fast delivery.
Think about how you’d finish this sentence: "People
buy from me because I’m the only business that..."
If you can put in something there that only you
are doing, then that’s a UCD. If you can’t, then
its time to start creating some UCDs for your
business.
Tap the power of the phone
Many marketing people consider the phone to be the
single most underutilized selling resource in
business today. An effective phone technique is
really important in keeping prospects interested
– there’s no logic in spending money on lead
generation only to turn them off the first time
they call you because of the manner in which you
talk on the phone; or by handling the call
carelessly and leaving people hanging for long
periods; or setting up one of those telephone
tag situations. We all know how frustrating
these things are.
With the right training, your team will have the focus
to handle any call, and make it work to your
business’ best advantage.
Develop a sales system
Just about everyone in business knows of someone
they’d call a "natural" salesperson. If you
observe these people, you’ll begin to notice a
pattern to the way they do things – how they get
the prospect interested, how they keep them
interested, how they handle objections, how they
deal with questions about price and how they
finally ask for the sale. All in a way that
builds trust and understanding with the prospect
as they go along.
They have systemized their routine – they have a
"sales system." Now it is actually possible to
learn an effective sales system. A systemized
approach to selling based on an effective sales
method and shared by you and your team, is a
must-have for increasing your customer base.
Research your market
To improve your return on investment in marketing
communication pieces such as letters,
advertising, emails, and direct mail, a targeted
(rather than shotgun approach) is very
important. Your marketing should focus on a
specific group of people who are the right type
to purchase your product or services and give
them a message they'll relate to.
So it’s extremely important to understand what makes
your customers tick; if you are selling
computers then you need to realize that the
expert user with knowledge of software and
hardware is going to want different information
than a person who just wants something easy to
use for their email contact with family and
friends.
To arrive at this knowledge of your actual and
potential customers, you need to do some
homework to identify your main market segments
and profile them according to their interests.
Then you can market in a much more focused and
cost effective way.
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Small Business Planning —
3 Myths
It’s estimated that up to 70% of SME owners don’t have
a formal strategic plan. That means they have
little idea where they are headed, change
priorities constantly, have confused their
employees about the purpose of their jobs and
are chasing goals they have little or no chance
of achieving.
There are a number of common reasons SME owners give
for failing to develop this vital business tool.
Here are 3 that are pure myth – and why.
Myth 1: My business is too small
to need a strategic plan
From the SOHO on up, EVERY business can benefit from a
strategic plan. A strategic plan can help you
make informed decisions about time management
and budget allocations to different activities.
You can use your strategic plan to help you
determine whether it’s worthwhile attending a
particular event, or advertising in a particular
medium.
For employees, it can be used to outline specific
business goals, providing direction and focus
for your team's activities. Your strategic plan
can form the basis of all activity in the
business and keep you informed of how the
business is performing.
Doing the right things and doing them efficiently and
economically are activities that every business
needs to get right and a strategic plan is the
basis for achieving that.
Myth 2: It will take forever to
produce
The real value of a strategic plan for your business
is in taking some time out to think about your
situation – to work ON the business instead of
just IN it.
There will be some time involved pulling together
information about your current way of operating,
about what’s happening in the wider market
place, about your customers and competition.
Gathering and analyzing this information is
actually not a burdensome job, especially with
the assistance of a trained advisor who can help
you do a SWOT (strengths, weaknesses,
opportunities, threats) analysis and draw up a
strategy with an unbiased eye.
Thinking strategically doesn’t involve working out all
the individual tasks you will need to do to
achieve them right there and then. For example,
suppose a goal is to grow revenues at an annual
rate of 7%. This sets off all kinds of nitty
gritty task-oriented thinking about labor needs,
promotional materials, space planning, etc. that
can immediately bog you down. Stratgies however,
work on a higher level – developing a new
product to broaden the service base and decrease
reliance on ageing lines for example. Only when
a true strategy is decided is it time to
think about the individual tasks needed to
accomplish it.
Myth 3: A strategic plan is out
of date from the time it's finished
Too many small business owners treat their business
plan as a closed book. That’s not what they are
about. A business plan should be an active
document that gets reviewed and updated at least
monthly.
Your strategic plan won’t be doing what it is supposed
to unless you have regular meetings with the
people responsible for making the goals in it
happen, and checking progress against the
planned goals. When you track the results of
your efforts, you can make mid-course
corrections to get back on track if needed.
Regular meetings provide the opportunity to work
as a team and make the best decisions you can as
you advance.
A plan's purpose is action. Without action, the plan
is useless and the dollars invested in creating
the plan are wasted.
Treat your business like a real
business
SME advisors who work with different sized businesses
know that those that perform at the highest
level usually have some sort of formalized
strategic plan in place, and have implemented it
well. On the other hand, those businesses that
struggle usually have no plan in place and seem
to flounder in their attempts to be successful.
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Top Website Mistakes That Lose You Business
Everybody needs a web presence. But given the time and
money you’ll invest in building, or having a
site built for you, you will want to ensure it
pays its way. Here are some common, but
fortunately easy to correct, website marketing
mistakes.
Thinking your customers don't
use the web
Yes they do! So the first thing is to create something
more than a brochure site. Put some time into
seeing what sort of websites your competitors
have, and what services they offer online. Then
get a person with some knowledge of how internet
search engines work to take a look at your site
and optimize (using the right keywords and
phrases on your pages) it to get noticed by
search engines. Depending on the nature of your
business, search results could be a critical
factor. And don’t restrict your marketing to web
communication only – get your website address in
all your promotional materials from the side of
the business vehicle to your business card.
Making it difficult to
understand what your business sells and what
features the product or service offers
People searching for products on the web tend to be
impatient. They expect to be able to tell just
what you sell and see where to click for details
on products from a quick glance at your home
page. They want that information in plain
English with lots of short paragraphs and
bulleted lists. And they want facts and product
features as well as the benefits of buying your
product so they can make comparisons.
Too often messages are written in such hype that it’s
actually difficult to understand exactly what
the business does.
Making it difficult to place an
order or check out an item from your web site
If you are selling from your site then put the
necessary work into designing an easy to use
shopping cart and checkout (credit card payment)
process. It’s remarkable how hard some
businesses make this with confusing processes
that leave a shopper unclear about things such
as how many of an item they ordered or whether
the order was placed at all. When the navigation
and checkout processes are confusing, expect the
customer to bail out and abandon the shopping
cart.
You should be checking the site statistics to
establish what percentage of visitors are
abandoning their shopping carts and at what
point in the process. Then use this information
to work out whether you are losing sales and
what changes you can make to improve the
customer experience and reduce shopping cart
abandonment.
There are proprietary cart software solutions
available that have met strenuous testing that
may offer an off-the-shelf solution for you.
Not providing ways to contact
you
Conversion rates vary by website and product, but on
the average only about 2-3 percent of visitors
to a web site will make a purchase. In other
words, roughly 98% of the visitors to your site
don’t buy during their visit.
Sometimes that’s simply because you don’t have what
they want. But in instances where they are
impatient with your site, or confused by the
order/checkout process, you can improve the
possibility of them making a purchase by
offering them a means to contact you on each
page of your site. Phone numbers, especially a
toll free number, are good, but an email is
better and faster. These days you can use chat
software in the form of "live help" solutions to
give help in real time. Go all out to maintain
contact – even a complaint can provide the
excuse to ring back and try and sort out the
problem and move on to a sale.
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Delegate It
Are you running your business or is your business
running you?
Talk to SME owner /managers about this and you soon
discover that what most of them are doing is –
just about everything. Many who started their
business off the back of their own specialist
knowledge or skill and a desire to be their own
boss, ultimately become frustrated and tired as
they extend themselves across two jobs –
practicing their trade and managing their
business.
Ask why the
hired help isn’t doing the work and the common
answers is likely to be:
- I’m too busy to take the time to train someone else
- I don't have the time to explain to anyone how to do it
- I’m the only person who can do it right first time
And
sometimes there might be an unvoiced, but still
important reason:
- If I delegate responsibility I’ll lose control over what goes on
Someone else
CAN do it!
Delegation
really is the only solution. What is needed is a
plan for making it happen effectively. That may
mean, short term, finding the time or getting in
an advisor to assist you to develop a solid plan
for training up people and developing reporting
mechanisms. Keep the bigger picture in mind–cost
is relative. For example, if you manufacture and
install pool fencing, are the installation jobs
interfering with time that could be more
profitably spent developing new designs or
marketing. Or would you just like to be spending
more time with your family? If your answer is "yes,"
then the cost of delegating is well worth it for
you.
Planning to
delegate
Planning to delegate should be a structured process –
that’s why professional assistance can sometimes
be a great help in making the process go as
quickly and smoothly as possible. It will
involve going through the following processes:
- Clearly and logically identify the goal of the project; exactly which tasks or part thereof you
want the person to be able to relieve you of
- Develop a documented description of the process to act as the teaching guide and
reference manual to help with the training. This will reduce the number of times a trainee has to
come back to you for answers to "frequently asked question" type issues.
- Develop guides as to how long a process should take so you can measure output
- Develop an ongoing reporting mechanism of the key performance indicators (KPIs) of the task.
With KPIs in place, you can keep overall control– such as timesheets or even periodic
personal inspection of the work.
Telling someone to take over and walking away from the
job yourself isn’t delegating. And the results
aren’t likely to be pretty. Use a structured
process and remember that success will depend to
a large degree on how you do the actual
training. Your approach should involve frequent
feedback to the trainee. You’ll be surprised at
how many of your employees can step up to the
plate under the right conditions.
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