2020 was a make-or-break year for many businesses in the USA as well as worldwide. Revenues are down for many industries, and brick and mortar locations are suffering from the ongoing COVID-19-related restrictions. Now, more than ever, businesses need a plan for how to move forward and keep their doors open in 2021. For many, it’s a matter of making a plan and generating enough growth to offset the lost revenues.
The Simple Path To Growing Any Business
To put it very simply, there are three ways to grow any business:
- Get more customers
- Charge more
- Sell more to every customer
For any company you can think of, growth is a matter of one of these 3 factors, or a combination of them.
The Four Levers at Your Disposal
How do you actually go about addressing one or more of the above? One way to think about it is that, as a business, there are four levers at your disposal to increase your growth potential:
These are the number of individuals who have shown purchase intent and opted-in to receive more information from you.
These are the leads that you have successfully influenced to make a purchase.
Focus on the profits you make per customer, increasing their Life Time Value (LTV).
Frequency of Purchase
This is the rate at which customers repeatedly purchase from you.
These four levers map pretty cleanly onto the four primary stages of the customer journey.
To become a customer, a person first needs to become aware of your company and what you’re offering. The first step of your marketing plan involves increasing customer awareness and traffic to your website or physical location.
This is the work the customer does to decide whether to ultimately make a purchase from your business. Very often these days, a company needs to go the extra mile to convert customers, by doing things like providing value up-front free of charge or by ascribing to certain beliefs such as being a socially responsible company.
This is the customer’s action of making the purchase. It’s usually based on an offer that’s perceived as too good to pass up, and it’s generally the result of goodwill generated in the Evaluation phase (see #2 above).
This relates to the customer’s lifetime value for your company. It involves some other aspects of the customer journey, such as buying additional products and coming back for repeat purchases.
The Compounding Benefits of Moving the Four Levers
Each of the above four levers has the ability to increase your growth. For example, let’s say that your lead conversion rate is 5%, and one month you suddenly figure out a way to double your leads by increasing traffic to your site. Technically, that should double your customers and your revenues that month.
These levers also work together. If you manage to double your leads, but also figure out a way to lower your costs (and double your margins), you’d now be looking at a 4x growth in your business.
Due to their compounding nature, if you manage to concretely improve all four of the above levers, it’s not inconceivable to experience tenfold growth in revenue! It sounds pretty unbelievable when you think about it, but when it’s broken down into concrete steps, it becomes much more attainable, and that’s the core of our marketing strategy: We want to help you create a plan to move these levers for your business and reap the benefits.