Small Business Growth Strategy
A cracking small business growth strategy
– that big business can’t do (certainly not well!)
Growth Strategy; being small businesses, means we’re nimble and able to react to events and news promptly, plus take and implement decisions very quickly. After all we probably don’t have a long decision making process nor do we have to seek approval. If we decide to do something, we can just take action.
However this is double edged. Being small, means resources are tight and in short supply. We don’t have endless budgets and we most definitely don’t have much spare time. Therefore any growth strategies must be easy to implement and get a financial return.
With this in mind, the key question is what we should do if a small business looking to grow. Plus how do we differentiate ourselves from larger competitors?
Referrals and Recommendations
A great strategy and arguably the most important is ask customers for help with your marketing because you are small.
It is very much harder for a large business to do this – whereas us small business owners can get personal!
Most people will like the fact you are taking the battle to the bigger players. Ask for referrals and recommendations explaining that you have to attract new customers, but don’t have a huge marketing budget.
Most businesses don’t even tell their customers what sort of customers they want!
Therefore make it easy for them to refer, by explaining the sort of person you are looking for and even the words they could use in making any introduction.
It will certainly help to write a single-sided piece of paper “Who Is A Good Prospect For Me”. It’ll make a huge difference to the volume of referrals you get.
Before we go further, let’s acknowledge that most businesses fail to even ask for referrals from existing customers. At best it is passive – they accept what they get.
It is worth creating a Customer Incentive Reward Scheme that focuses on making these referrals happen.
Why should you reward them?
Firstly, at the very least you should always say ‘thank you’.
And if you reward them, they’ll be incentivised and do it more often.
It follows that a properly structured scheme gives your business the following benefits…
- A constant supply of quality referrals.
- Increased enthusiasm in dealing with people who are highly interested in the product or service.
- An increase in the quality of customers. Good customers tend to refer people who become good customers
- Increased profits. You spend much less time and money converting referred people. They have already been recommended and therefore trust is already established. Conversion rates are higher.
- As a result, referred people tend to value the product or service more than an ‘ordinary’ prospect. They usually don’t ‘shop around’ to get the best price. This means you’ll be able to sell the product or service at an optimum price.
- A Customer Incentive Reward Scheme will help strengthen relationships with customers. By delivering good service to their friends, colleagues and business associates, you make your customers look good in the eyes of the referred party. They bask in having recommended a good supplier and they enjoy it.
- And you turn Customers Into Champions or Advocates
Making It Happen
There are several ways to achieve this but the basic rules don’t change
You must constantly inform and remind customers of the benefits of doing business with you. That’s the key reason why they should refer you.
Always test different schemes with 10-20 customers each to see what’s best for your business and change the scheme from time to time to keep it fresh.
Make sure your customers know about the current scheme.
Always thank a customer for a referral, and let them know the outcome, even if it didn’t generate business.
Always reward a customer for a referral. If it isn’t financial or tickets or something that costs you little like a free meal, make sure it’s a Thank You letter.
Make sure all staff understand the scheme. Maybe incentivise the non-selling ones themselves.
Keep in touch with a referral who doesn’t convert. Free reports, special offers – remember the fact they’re not ready to buy right now, doesn’t mean they never will if you keep in touch.
Never beg or even cajole of course. This is an important point. I have seen small businesses emotionally trying to bully people into using them – use us or lose us approach. Caution here as I don’t think this works and builds resentment.
The key issue with any small business, is can you deliver? Don’t rely on old clichés such as family firm – on it’s own this means nothing. What you must do is very clearly state the reasons why they should use you – your experience, depth of knowledge, small enough to care but big enough to cope.
It is also crucial you give them ‘Reasons Why’ you want referrals.
Examples of ‘Why’ include the fact that the high level of referrals you get enables the time saved to be spent helping existing customers.
It could be that you only take on 4 new customers per month – as one of your best customers you’re giving them the opportunity to invite anyone as good as them.
Hopefully you get the idea and it’s important to create a scheme you are comfortable with, and one that’s true to your ethics.
Customer Incentive Reward Schemes
All these Customer Incentive Reward Schemes are tried, tested and proven. Some may seem a little strange at first. They may seem hard to believe. Some you may think would never work. The fact is – they all work!
You just have to try them out and see which ones you’re most comfortable with and of course, which ones work best for you – you’ll be surprised at the response you get!
After reading each Customer Incentive Reward Scheme you’ll also be able to think of many other ways to get referrals. Just go for it and keep trying different approaches – it will be time well spent…
The Course Of Business Referral
Make referrals a condition of doing business with you. Every time a customer is acquired you need to tell them that because you add so much value to them as a customer you expect 2, 3 or 4 referrals from them – within a given time.
The Surprise Refund Referral
If a new customer has been referred from someone else you would use this strategy.
Immediately after the new customer gives the order and they are happy with the benefits they receive and the price they’ve paid, say:
“I have a surprise for you. You were referred to me by Dave Brown – therefore, here is a £50.00 discount (or whatever you decide) off your order. Oh, and by the way, Dave will be getting £50.00 through the post for referring me to you.”
Straight away your new customer is primed for offering referrals, and you can tell him or her that he or she can benefit from £50 every time he or she refers someone. Then ask him or her to write down the names and addresses of three people who would benefit from your product or service.
The Cross Promotion Referral
In this example, you would form an alliance with a business that has similar customers to you. They offer a discount on your product when a customer purchases your product/service.
The Longstanding Customer Referral
In many circumstances your best and longstanding customers may not have given you any referrals. To change this, all you need to do is arrange to see them and run through this scenario:
Talk to them and get them to speak about why they do business with you. Ask them to tell you about the benefits they receive from the business.
Make sure they fully understand the true value of doing business with a company such as yours. Then say to them how much you would appreciate a letter of recommendation covering those points.
Finally ask the customer to give you the names of their friends/associates who would benefit as much as they do from the product/service.
The Experience Referral
If you sell to people whose customers or friends directly benefit from your product or service, this can be very effective.
Agree with the customer that as part of their service you like to write to all the people who experience your product or service as a result of them buying from you. A letter then goes to these people offering them discounts for the product or service.
For example, you could run a wedding photography studio. The whole of the bride and groom’s friends and relatives have first-hand experience of you and your products or services. Straight after the wedding write to all the wedding guests, thanking them for their help and patience and then give them a special offer.
Straight away you are reaching another 100, 150, 250 people who have already seen what you can do. Over the space of one year, this could be thousands of potential customers.
The ‘I’m In The Area’ Referral
This is especially useful if you go out to visit customers or prospects. At the end of the meeting say, “I’m in this area all day today – do you know anyone who I could visit like you who would be interested in the benefits you are getting?”
You could even get your customer or prospect to call the people they mention while you’re with them.
By planning ahead, you could, of course, prime them before your meeting day which can be very effective.
We all know any referral is extremely valuable, but far too few of us get anything like the number we want or need. The key is to ask for referrals and recommendations at every possible opportunity, you may be surprised at what happens next!. Why not access our free workbooks which explores these issues in depth: BGC System
If this has helped you and been useful, why not come along to one of our Business Growth Club meetings? A chance to meet like minded small business owners as we talk through exactly these sorts of issues BGC Meetings