Jay Abraham Three Ways To Grow A Business

Most people make the mistake of concentrating on the first item of Jay's 3 ways to grow a business - increasing the number of customers.

They are not conscious of it but they ignore the potential for extra sales and profit from the second and third ways to grow a business.

Jay's incredible record for profit improvement is often based on his success in leveraging the amount customers spend and the number of times they buy for easy and quick wins.

Jay Abraham makes it clear that when most people think about growing their business, they automatically start thinking about winning more customers.

Let's break it down.

The number of customers is a function of:

1 - the number of customers you have at the moment

2 - the number of leads from prospective customers you attract

3 - the rate you convert leads into customers

4 - the number of customers you lose.

Improving Retention

Working back up the list, if you are currently losing 20% of your customers per year and you can implement policies to stop half of them disappearing through better service and improved relationship management and communications, it is the equivalent of getting an extra 10% of new customers each year (20% loss * 50% improvement = 10% lost and now 90% retained.

Growing by improving your retention rates does not require expensive and risky advertising and can be relatively easily improved when you start focusing on why customers are leaving.

Improving Conversion Rates

The next easiest way of growing your business by increasing the number of customers is by improving lead conversion rates.

You have two areas to improve conversion rates - immediate and follow up.

If you improve the sales skills of your staff who sell so that they focus on what the customer needs and wants, you should increase the number of customers you create early in the sales process.

It has also been shown that most sales people give up too early. Sales staff should try to close if the customer appears ready to buy but if the customer isn't ready, you need a way to educate the customer and to build the relationship until they are ready.

Research indicates that the majority of sales people give up after the first or second No but the majority of purchases are made after four or more contacts.

Attracting More Leads

The final way of growing your business by increasing the number of customers is to attract more leads from prospective customers.

That means either or both

1 - more effective advertising. Jay Abraham advocates optimisation and the need to continually test for better, more effective ways because improving marketing can create great leverage. If your advertising creates 10 leads per week, a better headline and more persuasive offer may generate 20 leads without any more cost.

2 - more advertising and promotion. Jay recommends the Power Parthenon where you should have multiple sources for leads so you are not reliant on just one.

You may be thinking "I can increase the purchase transaction value because my customers don't want to spend more" but you could well be wrong if you don't challenge your thinking and test out different options.

Increasing Your Prices

First there is the basic option of increasing prices.

It is easy to think that your customers decisions are dominated by price - and they may be giving you that impression - but repeated tests have been done to show that it is not true.

How often do you buy more expensive things out of personal preference, convenience, availability and confidence in the supplier.

Tests may show your customers are willing to pay more - and even if you lose some business, it still may be much more profitable as price is the number 1 driver of profit. For more details see my page Increase Profit

Upselling and Cross-selling

This is a big subject but your customers may be delighted to be offered the chance to buy something better (an upsell) or something related (a cross-sell).

Think of McDonalds and the classic questions "Do you want fries with that?" and "Do you want to supersize it?"

It is said that about 30% of people agree and that is extra profit on the transaction.

Look around you for other examples of where an extra offer is made at the time of buying and see what you can learn and apply to your busy.

The third of the three ways to grow a business is to increase the number of times a customer buys from you.

This does require that you do a good job and deliver on your marketing promises and then keep in contact with your customer.

Your competitors are probably talking to them so if you stand back and think you have their business, you could be sadly mistaken.

Or you may think that your customer will remember who gave them such a great service last time and that they will come back to you when they need more work done.

But is that really what happens?

Do you go and buy from your trusted supplier who is ignoring you or do you try out the new company with the eager salesperson who wants your business?

If you don't have a regular customer contact program, you need to implement one to make sure that the customer is as satisfied as you thought and to keep your business in their minds.

I have been going to the same dentist for more than ten years but I only think about having a check up when I receive the six month check-up reminder postcard.

I used to have the house burglar alarm serviced every year. They used to send me a reminder letter but one year it came about a week before I was going on holiday and I didn't have time to fix the visit before I went away and I knew the alarm worked. The cycle was broken. They thought I wasn't interested but it wasn't convenient and then I forgot.

They lost the service contract and I saved a bit of money.

About three years after we had a problem and I called them in and they never tried to put me back on the service contract. I would have probably agreed but they missed the opportunity to make sure that I continued to buy from them.

Legendary marketing genius Jay Abraham is releasing his new book "The Sticking Point Solution" on June 2nd 2009 and if you pre-order there is a very special deal.

It is subtitled "9 Ways to Move Your Business from Stagnation to Stunning Growth In Tough Economic Times"

Pre-order and more details on the Sticking Point Solution offer.

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