February 2007
The following article was first published in the Eastern Daily Press' 'The Business' on 14 February 2007
Build a solid foundation for your business
Speaking recently to a local group of business owners who had either just started up or had been trading for three years or less, I reminded them of the simple principle that there are only three ways to have more business: to have more customers, to have your customers shop more often and to have your customers buy more when they shop.
It's really not any more complicated than that. Sure, there are lots of specific things you need to address in order to make each happen, but experience shows it's useful to `keep it simple', so I urged the people present on that evening to concentrate on the basic foundations of their businesses and to build them solidly. Then, as the organisation expands it will be less likely to topple over because of a weak underpinning of the fundamentals.
The focus should be on the four `building blocks' of every business:
Lead generationSales conversion - together, these will provide you with more customersFrequency of purchase - customers shopping more oftenAverage value of sale - customers buying more.Get each of these right - work on all of them, not just one or two - and your business will have a secure foundation on which to grow and which will help it survive the occasional tremors that shake virtually every enterprise from time to time.
Keeping to the theme of simplicity, let's look at one or two ways of cementing each of these blocks in place. Whilst there are many ways to generate leads in your business, it's better to stick to a few that give the best results rather than spread your resources too thinly trying everything at once. In every communication you have with potential customers, remember that the message should be about what's in it for them, not you, and never miss a chance to let people know what sets your business apart from all of the others. Also, don't be afraid to ask your existing customers for referrals to their friends and colleagues. Assuming you're providing them with excellent service, most people are usually happy to make recommendations, especially if asked.
You can convert more leads to customers if you demonstrate some of the benefits of dealing with your business, adopt the right attitude when speaking to prospects (especially by showing that you're listening to what they're saying) and always make it as easy as possible to do business with you.
Once you have a customer, never miss a chance to make them want to return. Apart from great service, the single, simplest way to do that is to make sure that every customer knows everything you sell. Sounds too easy, I know, but it's rare in practice and it really can increase the frequency of purchase enormously.
Finally, high perceived value from good service is worth more to most customers than a discount. In any case, discounting too much is a sure way to erode the base on which your business rests. A solid foundation built on sound principles and with the right building blocks will give your business a platform for success.