How many times have you sat in your office and said, “I need to grow my business and fast,” and then didn’t know quite where to start? If you watch what others are doing or listen to a lot of experts, then the number of ways you could grow your business seems endless. Which is good…there are a lot of ways to get it done. Which is bad…because that can feel overwhelming.
What I’m about to share with you is something that I learned from Jay Abraham. He does a brilliant job of distilling all of this down to 3 Key Levers to pull to grow top line revenue in his book 3 Ways to Grow a Business and always point my clients here first.
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According to Jay, the best place to start when looking to grow top line revenue is with the 3 main components of business.
- Increase the number of customers/clients.
- Increase the average transaction value.
- Increase the frequency of repurchase – get more residual value out of each customer.
Improvements in any one of these areas is going to create growth in revenue. Improvements in more than one of these areas is going to create exponential growth in revenue. What do I mean by that? The compound effect of improvements in multiple areas is more than the percentage increase in each. For example, a 10% increase in all three of the components will lead to a 33% increase in revenue. If those improvements resulted in a 20% increase in all three components, the results would be a 73% increase in revenue. The power of compounding! You got to love it.
One of the things I love about this is that rarely is a 10% increase something that seems insurmountable. Most business owners are like, “Yes! Ten percent is totally doable!” And that gets people excited.
There will be multiple ways to achieve increases in each of these three components. Once you know your target increase, you can look at all of the ways you can make it happen and then decide which one or two things will get you the closest. In other words, what are the one to two actions will make the biggest impact. Then you don’t have to overwhelm yourself with too many ideas and action items and run the risk of never getting traction.
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Increasing the number of customers/clients can come from a lot of different places. You can increase your number of leads. You can increase the number of quality conversations that come from those leads. Depending upon if you have a 2-step, 4-step, or a 4-step sales process that repeats, increasing movement from one step to the next or increasing your close rate are all ways to increase your number of customers/clients.
What’s the average transaction value of each of your customers/clients? What would increasing that transaction value look like? Again, there are several options. Can you increase pricing? Create bundles? Upsell? Down-sell? What will work best for your business?
Finally, what do you need to do to increase the frequency of repurchase from each customer/client? Note: If your product or service is a one time sale, you may want to instead count the number of referrals you get and then convert to sale OR consider adding an ongoing service to sell that can increase your frequency. Will the creation of additional products and services that compliment your core business be of interest to your clients? What about a loyalty program? What would happen if you bolstered your referral program? All of these are viable ways to increase the residual value of each customer.
Come up with your target percentage increase in each component. Whether you achieve these or not will not only be a matter of focus but also having a strong enough reason to follow through. So take a moment to think about what it will mean if you are able to achieve top line revenue growth in your business. What will it feel like to make that happen? How will it impact your business, your customers, your employees, your family, and what could you do with the extra income? What will you become in the process?
Once you have your compelling reason why this growth is a must, brainstorm how you can increase each of these three components, decide which of those will make the biggest impact, and then go implement with focus and commitment.
STACY OLDFIELD
After nearly 25 years in Corporate America, Stacy launched Minerva Management Partners as a way to combine those years of business experience with her life coaching certification and love for coaching women. Minerva Management Partners is a business coaching practice designed to support women entrepreneurs committed to launching and growing their business. Also, as a Results Coach with Robbins Research International, Stacy helps business women to focus their ideas and efforts and holds them accountable for achieving their goals. Whether it’s helping women discover creative solutions to their business challenges, coaching them to be clear and decisive, or helping them see and take action on new opportunities, Stacy guides them to achieve the business and career results they are seeking. Stacy is also the creator of the Minerva 3-Day Networking Challenge and the Network Like a Boss Lady On-Demand training program. Stacy has been invited to speak to many audiences within South Carolina including the Center for Women, Women Entrepreneurs of Charleston, the Women of the Workforce program of the Naval Information Warfare Center (SPAWAR), Charleston Women in Business, Association of Fundraising Professionals, SCANPO, graduate classes at both The Citadel and the College of Charleston (CofC), and Leadership CofC. She currently serves as a mentor through the Women of Excellence Program at Xavier University and previously served on the Board of Directors for the Beautiful Gate Center and on the advisory board of the SC Women’s Business Center.
