When it comes to growing their business, most business owners tend to think in terms of incremental growth with a linear thought process. Growing your business 5% or 10% a year is great, but won't fundamentally change much about your business. This type of thinking does create growth, but usually small growth at best. And acquiring new customers is usually the only strategy in place to produce this growth.
So what do you need to do grow your business fast, to see exponential growth for your business? The 50%, 100% or 200+% year over year kind of growth?
You need to focus on 3 things and work on improving all three of them at the same time. Acquiring new customers is actually the hardest and most expensive out of the three, but seems to be the area almost all business owners keep their focus on.
This strategy can be applied to any business, whether you offer products, services or are an ecommerce store. I learned about this business growth concept from Jay Abraham, one of the smartest marketers around when it comes to looking for the many opportunities for growth in a business.
If you want to see meaningful growth in your business, the kind of growth that transforms your business and your life, you need to focus on the following 3 things.
Acquire New Customers
You need new customers to grow your business and this is the strategy most people tend to focus on. While acquiring new customers is important, it is also the hardest and most costly way to grow your business out of the three.
Increase The Average Transaction Value Per Client
How can you get more money out of each transaction from your customers? You can increase your prices, bundle additional services/products, or introduce add-on or upsell options. This is actually the easiest to do out of the three as the customer is already in buying mode and you've already done the hard work of building their trust/confidence to buy from you.
Increase the Frequency Of Transactions
If a customers buys from you 3 times a year, how can you make that 4 times per year? Better communication and education may be all that's needed to get a customers to buy more often than they do now. Creating limited time events/opportunities to buy can also push people into buying more often.
Here's an example to see how growing each of these areas by just 10% can lead to exponential growth for your business.
If you currently have……
1,000 customers x $100 avg transaction value x 2 transaction per year = $200,000 income
If you increase all three areas by 10%……..
1,100 customers x $110 avg transaction value x 2.2 transaction per year = $266,200 income
So by growing each area by just 10%, you increased your total income by 33%. If you increase each area by 25%, which is definitely attainable, you would just about double your business with a total income of $390,625.
Geometric Growth vs Incremental Growth
Do you want to grow your business by 5% next year or by 35%, 100%, or more? The amount of time and resources to do both are not that much different, you just need to adopt a growth mindset for your business. There are numerous opportunities for growth sitting there in your business, it is your job to identify them, create a plan of action, and to use those opportunities to grow your business exponentially.
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