Editor’s note: This article was first published in March 2012, in times of crisis; the tools it mentions reflect that period. Google AdWords is now Google Ads, and the Spanish social network Tuenti closed in 2016.
Increasing sales in a business shouldn’t be hard if you know how to go about it. It may sound like a self-help slogan, but sometimes we need to forget the grand lessons of business school and go back to basics. To make a small business more profitable, we only need to achieve these three basic things:
1. More customers.
2. Bigger purchases per customer.
3. More purchases per customer.
Points 2 and 3 may look the same, but they’re not. Here’s how to achieve each of them in a simple way.
1. More customers
Clearly, the more customers walk through our door, the more we’ll sell. You can win new customers both through traditional means and by using new technologies.
Perhaps it’s time to put together a local campaign on Google AdWords and/or Facebook to make your product or service known at minimal cost. For that, obviously, you’ll need your online brand ready and a landing page on the internet (an online shop window). Even if you don’t sell online yet, it at least makes it easy for potential customers to find your premises, so your business’s address and phone number should be as visible as possible.
New markets: a while ago we discussed how to break into new markets with little or no investment, thanks to strategic alliances between small businesses. Read also:
2. Bigger purchases per customer
We need to find ways to increase how much a customer spends in our business. That doesn’t mean palming off products they don’t need. Let’s take an example.
When I go to buy a suit, there are shops where you walk in, buy the suit, pay and leave. In others, you buy a suit and walk out with a shirt, two ties, a pair of cufflinks and some shoes as well. The difference between the two shops is usually that one has a shop assistant to sell to you, and the other has a sales professional to advise you.
In one you spend 200 or 300 euros; in the other you might spend 500 euros, and the shop has also moved other products. That’s bigger purchases per customer. Many entrepreneurs aren’t fond of selling, so they’d need a good professional for this.
Another technique for increasing sales is to use offers and play with profit margins. Say you can cut the margin on one product if the customer buys another product on which you keep the usual margin. In other words, I buy the suit at its normal price, and if I also buy some shirts and ties, they give me a 20% discount on the shirts, the ties or a pair of shoes.
3. More purchases per customer
The customer has to come back, and few businesses collect their customers’ details. Most customers (80%+) have an email address and a profile on Facebook, Tuenti and so on. Let’s try to capture it so we can send them other offers later. This is a customer who has already bought one of our products, so they’re a potential customer. We already know what they like and what they’re looking for. We can offer it to them.
Another technique is to give them a discount voucher for their next purchase. The point is to build customer loyalty and make it more likely that their next purchase will be with us. The more information you have about them and the more ways you have of getting future offers to them, the better your chances of making another sale to the same customer.
Basically, it comes down to these few points, which, done well, certainly work, because it’s about adapting the business mindset of big corporations to a small business. Without a doubt, by following these small steps you can grow your business and increase sales even in times of crisis.
Further reading
- The story of the fisherman and the businessman: the entrepreneurial mindset
- Copying an idea and adapting it to your market can be a very profitable business
- Ideas for growing your business with minimal investment
Featured image: Elliott Brown, CC BY 2.0, via Flickr.
