Most people overcomplicate marketing with talk of image, brand, feel, look, style, and culture. These are all important, relevant factors — if you are a multinational company — and all are of little importance if you are not!
What is important is the simple fact that there are only three ways to grow your business.
1. Increase the number of clients.
This is where most businesses focus their effort, although it’s very often the hardest of the three ways to increase income. Large growth in number of clients usually comes from a change in pricing or a change in marketing focus. When we changed one partner’s prime marketing media from print advertising to targeted direct mail, we were able to add over half a million dollars in income the second year and over a million the third — with a small decrease in spending!
2. Increase the average transaction value.
How can you get them to buy more of what you sell each time they call, visit, or click? If ten people stand at the counter to buy a widget for $15, the 80/20 rule says that if all were offered the chance to buy six widgets for, say, the price of five, two people would do it, increasing your transactional value by over 53%.
Simple, but most customers rarely receive the offer. While the person is standing in front of them, daily-fee golf clubs sell one round instead of five. Shoe stores don’t add socks or polish to a sale. Hotels sell that night’s stay in the summer without trying to sell a return stay in the fall, and so it goes.
There’s no cost other than the few moments of time to make the offer:
Mr. and Mrs. Jones, have you ever had the pleasure of being up here in Vermont when the leaves are changing? It’s stunningly beautiful. Our fall packages just came out this week but they sell out very fast. Shall I go ahead and reserve yours while you are here today?
3. Increase the frequency of repurchase (or the length of time they stay as a customer).
How do you get them to buy more often to get more residual value out of each client? I helped a software company massively increase its income by simply changing to a residual pricing model. Instead of charging $4,000 plus a small annual fee for maintenance, they now charge a setup fee of $1,500 and a $400 a month license fee. Since their average customer stays seven to ten years, you do the math! A simple change of marketing strategy that turned a struggling business into an extremely profitable enterprise.
There are a thousand things you can do in the name of marketing. Focus on exploring these three, in detail, first!
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