Financial stability of one of the keys for small business. As a small business owner / entrepreneurs , you are always looking to reach a sustainable level of business operation. However, not many plan this out and make informed decision. There is a simple maths behind it. This makes you realize what are the key things you need to do to attain higher revenue levels.
I would not say that all of them are easy but each of them are straight forward. What I can definitely say is that once you set these things in order and do it for a considerable period of time, you will see considerable returns.
The maths behind customer growth of a small business
Small truth which you can’t deny is that the money you make is product of number of customers (customer base) you have with average money (average revenue ) that you make per customer. Hence to increase your revenue either you have to increase your customer base or increase average revenue per customer.
A. Increasing Customer base
Increasing customer base actually means increasing your net customer base. Let me explain what I actually mean by net customer base. Some of the customers are bound to move to one of your competitor. Though you can’t customer attrition and make it zero, you can definitely reduce it. Following are some quick ways.
- Monitor returns on your marketing channel – For promoting your business you may be putting in local ads. Some of your customers may come from Yelp, Google or a hoarding on a broad way. Investing in a simple opensource CRM software solution may keep your cost down, yet track your spend and returns on your marketing channel. You may be surprised on how effective this could be while deciding where you would want to put your advertising dollars.
- Prevent Attrition invest in a customer Help Desk – Understand what your customer problems are and whether they were resolved including the root cause. A simple help desk solution just to record who your customers are and the issue they have had and the solution they were offered, can give a lot of human insight into how good you are in solving their concerns. Thus how likely you are to have them back.
B. Increasing average customer value
- Cross Sell – Knowing what your customers have purchased will also let you know whether they might requiring another product. Are your products inter-related? Look at how Amazon does it when you buy something from there. You may want to email or give a courtesy call to promote your products.
- Marketing Flyers on new offer – Do you have new products or promotions? Help it reach to your existing customers. It doesn’t have to be expensive. You can run email campaign targeted at your customer base. You can use solutions like “Mailchimp” or SugarCRM to do this for you. You can also see who is responding to your emails.
It takes few small things to be right so that your small business doesn’t remain small in future. Customer orientation helps the business grow and takes off constant pressure on getting new customers.
Apart from being cost effective, it also paves a way for future growth and sets the process in place for coming times when you would have considerable customer base and higher volume of transactions. Hence it would keep your future proof.
How I can help
As a small business owner myself, I know that your resources are limited and you may be pressed for time. Also results are important. A big enterprise can burn tens of thousands of dollars without seeing any concrete outcome.
A small business, however, need the best value for every dollar spent. We specialize in commercial open source CRM solution for small and medium enterprises which are mature and scale-able. Moreover they can be customized as your needs grow and your business complexity increase. Start slow and let your application grow as you see it helping you accelerate business.
Wondering how things work. Read for example how a CRM application along with content marketing can help you grow much faster. You can reach out to me by filling in the form on right hand side for quick response.