Your existing customers offer you the quickest and least expensive way to grow your company.  As we have covered in past articles one of the five focus areas for every business is the number of transactions you can achieve with each of your clients.  We all know how hard and expensive it is to attract a new lead and then convert them to a loyal and trusting customer.  It would be a mistake not to make the most out of your hard-earned relationship.  Today we will explore a few strategies to increase the number of transactions you do with your customers each year.

Cross Selling

We see this effectively used every time we go to a fast-food restaurant.  You order a burger and a soda, and you are instantly asked if you want fries with that.  A more subtle example is the store owner who places candy by the checkout register knowing well that Mom and Dad will succumb to the desires of the kids.  Shopify actually calls their upsell and cross sell option the candy rack.  As soon as you click the add to cart button, offers are displayed in the form of a pop-up, upselling and cross selling to the customer before they leave the site.  This is a proven strategy for increasing the number of transactions a customer will make during and after their initial purchase.

So, let’s say you are a hair salon and you have contracted with some hair product companies to display their products in your shop.  Most owners do this.  The question is will anyone ask the customer if they would like to purchase this product during their visit?  If you don’t ask, they will not buy.  If you do, it turns out that 34% of the time they will purchase an additional or alternative (more expensive) product at the time of purchase if they are asked.  Better still, open an on-line store that allows that customer to acquire the products they need to keep their hair style looking good between visits.  This store might just produce more revenue and definitely profit for the business than the shop itself!  By the way while shopping they will be reminded that it is time to book their next appointment.

Business Alliances

In the case of the hair salon, the distributor of the hair products sold in the shop is a good example of a business alliance partner.  An arrangement or contract between two parties to share in the revenue sold by the other party.  This is straight forward when it comes to distribution arrangements but what about other alliances.

Take the landscaping company who forms a relationship with an outdoor light company to help accent the beautiful plantings they install.  They don’t have the expertise to install the lighting so they find a company of similar quality that they can form a partnership with and share in the revenue added to the original project.  Think about your business.  Is there a product or service that your customer might buy from you that adds to the value of what you bring the client?

The painter who added window coverings (blinds, shades, curtains…) to his everyday offering increased the revenue of his company by 60% without spending a single cent on marketing.  They simply added this service as part of their normal quoting process.  The window covering vendor was thrilled to have met the painter and has since added many painters to his list of partners.

By the way, the profit of the painting job was increase exponentially because the painter added nothing in cost and a significant amount in revenue by forming the alliance.

Bolt-on Business

As a company grows it may make sense to add synergistic service units to the business.  I will often recommend a franchise business to an owner as an easy way to bolt-on additional revenue opportunities with very little up-front cost.

Take the case of the property manager who is responsible for renting and maintaining the properties for his customers.  They manage everything from the cleaning of the properties to the renovations to keep things looking new and fresh.  As a new business owner, it doesn’t make sense to do anything but find properties they can manage for a fee.  But as the business grows there is an opportunity to add multiple revenue streams by bolting on small low-cost franchises that will perform the cleaning, or painting or renovation work.  Obviously, the owner could go out and buy an existing business or start his own division in any of these categories but then he/she would have to learn the process of managing all these different operations.  With a franchise they come with the training, policies, and know how to run each business all for the low price of a franchise fee (normally between $10,000 and $50,000).

Often this strategy is proceeded by business alliances like those discussed above.  In this case it may be more appropriate to form a partnership or even an agreement to merge the two companies.  As a business owner you should never feel as if you are too small to think about these types of arrangements. I have seen many a large company formed by the merger of many smaller ones.  One word of caution when merging or joining organizations.  Culture is a very significant part of any company and if both parties don’t share the same philosophies when it comes to how things are done it can be disastrous for everyone involved.

Conclusion

As a business owner you know that there is nothing more important than protecting and nurturing the relationship you have with your customers.  There is no better way to do this than to have multiple touchpoints with that customer.  Leveraging those relationships by giving them multiple ways and multiple opportunities to do business with you is a win-win for both you and the customer.  They get to buy a service they need from someone they already trust, and you get to strengthen your bond with them by once again servicing them well.  Call me and we can brainstorm ways for you to leverage your relationship with your