When it comes to increasing turnover in your business, we suggest that there are four main levers you can pull in order to grow your business effectively. These are:
- Repeat business
We break marketing down into two parts – increasing market share and exploring new markets. We describe these to our clients as follows.
Market share is about saying that your business sells into a given market, and that market might contain X buyers. As things stand today, your business will ‘own’ X% of that market. Increasing market share is about increasing the percentage of the market that you own from X% to Y%.
Exploring new markets is about saying that the market you’re currently selling into comprises X potential customers. By considering options like selling to a different geographical region, cross-selling existing products/services or introducing new products/services we can increase the number of potential customers from X to Y.
This blog post discusses the first of these two options – How to increase market share in your business.
Tracking Lead Sources
We believe that when you market your products or services you will do so via different ‘channels’, e.g. word of mouth, internet, social media, etc. Some of these channels will work better than others. The first thing that we look for is that our clients are tracking which channels their leads are coming through. Over time this builds up a picture of which channels are higher performing that others.
Calculating Cost Per Lead
Using the data we’ve gathered we can compare this to advertising spend from the accounting system. In an ideal world, we will be able to compare the expenditure on a given campaign with the leads generated by that campaign. In practice, for most small businesses this level of detail isn’t always easy to obtain – although there are exceptions such as paid search or paid social media that make this eminently possible.
Benchmarking Lead Sources
We track where all our clients get their new business. We use standardised categories so we can build a picture of the best performing channels across the board. We benchmark individual clients against portfolio averages. This reveals if we’re missing something obvious – for example, if everyone else is getting more referrals that you. We can then investigate further to discover if your business is missing a trick.
Benchmarking Advertising Spend
A further benchmarking service that we provide to our clients is analysing how much money they’re spending on advertising, and what this is as a percentage of their revenue and profit. We compare your spend with your peers, which allows us to take a view on what is or isn’t reasonable. From time-to-time we find cases where five-figure annual sums are being spent on advertising with little to show for it. Benchmarking allows us to confidently suggest cutting this spend and therefore quickly boosting net profit.
Unique Selling Point
Finally, a discussion on market share would not be complete without mentioning unique selling point, or USP. In plain English we want our clients to be able to provide compelling reasons why their products and services are special, and why a potential customer should choose their offering rather than anything else.
At the time of writing, our clients increased turnover by 58% on average year-on-year. Better marketing, using the points above, was an important factor in achieving this result. If you want to grow your business using cutting edge techniques like benchmarking, why not get book a Free Growth Health Check?