Strategies for SME success
As I write this, BREXIT is an unresolved contentious issue, thanks to our inept politicians. But it is still we small & medium size businesses that will drive our economy forward!
I believe that the best way to grow is Strategic Marketing. That is where all the strands work harmoniously together, enhancing each others impact, thus delivering best results at lowest cost. I also believe that the purpose of marketing is to make selling superfluous. While that may seem far-fetched, if your marketing does the heavy lifting for you then your sales process will be far shorter and simpler.
What is business growth? Politicians usually argue job-creation, however we know that it is all about generating additional profit. While for many that means additional sales, for others it means improving their overall margins.
I am frequently asked “how can I get more sales leads?” If you are not generating the leads your business needs, it’s time to adopt the Strategic Marketing approach. That means understanding who buys your products and services, and why. Then identifying where they can be reached, and what language they understand, their specific jargon if you like, so that your message can be heard.
The other articles in this feature may introduce other excellent growth strategies that you should consider. By growing your business profits, you are not only helping the economy, but also enhancing the asset value of your business for when you decide to sell up. A robust Strategic Marketing System will further enhance that potential resale value, over and above a higher level of profitability.
Despite these uncertain times, shouldn’t you raise your prices, thereby increasing your profits at a stroke? The majority of businesses that I speak to have not raised their prices in years! That is because they have failed to understand that prospects shop for value, not merely the lowest price. Provided that you can clearly differentiate between your product or service, and your direct competitors’ offerings, while also showing how you provide additional value, you can charge more.
What is your sales conversion rate, is it as high as it should be? An obvious way to achieve just that is to embrace a down sell strategy. By this I mean you offer them an alternative product or service at a lower price. To be clear, this has nothing to do with discounting! This is, or should be, a lower quality offering at a lower price than your main offering. Sometimes this can be at a higher sales margin than your main offering, if you get it right. If you gain new customers with a lower priced offering, it will be easier to sell your normal offering to them at a later date. The goal here is to turn the prospect into a client, so that you not only realise some short term financial benefit… but you gain the opportunity to do business with them again in the future.
Another great way to grow your business, typically by 30% or more, is to increase the number of sales transactions per customer. We do this by implementing upsell and cross- sell strategies.
Upselling is offering a higher grade or quality or size of the item that the customer may be interested in at the point when the customer is ready to buy.
Cross-selling is offering other products or services which complement the item the customer is interested in, at the point when the customer is ready to buy.
I think that now is a great time to grow your business, especially if the UK makes new trade deals, besides the possible reduction (if we actually leave) in competition from mainland Europe for many goods and services. While enterprising Brummies will not shy away from doing what needs to be done, other fainthearts will merely tread water until they know what to expect from our realigned economy. By going for growth now despite the uncertainty, your business will gain a significant competitive edge over many of your direct competitors, both short-term and long-term!
John Holder, Business Growth Specialist
Reproduced by kind permission of Greater Birmingham Chambers of Commerce.
First published April 2019 in Chamber Link, Growing Your Business feature.
