Business development is crucial for any new start-up, without it, your business will struggle to survive let alone thrive.
And simplistically speaking there are only three ways that you can do that, and these are: sell more, sell to more, and sell for more.
Too often we overcomplicate things, but in terms of revenue growth, these are the only options and the clearer that we can see them the easier it is to address them, and all of your efforts should be directed to these three tasks.
Your business should have strategies for all three of these opportunities because if you don’t then, you are missing opportunities and potentially leaving the business on the table for your competitors to profit from.
The easiest way to grow your business is to sell more products or services to your existing customers. Your existing customers already have a relationship with you, they probably already know you, like you and trust you, so it should be fairly easy to sell additional items to them.
Some studies have shown that it costs seven times as much to add new customers than it does to sell to existing customers.
That means that there are bigger profits to be made in selling additional products and services to existing customers as you have already borne the customer acquisition cost previously.
So what other products and services can you offer to your existing customers. These might not even be services that you produce; these could be complimentary services where you take a small percentage from a partner. Look at airlines who look to offer additional services like car hire, hotels, etc., etc. as they look to maximise the revenue from their customers.
You also need to have customer satisfaction high on your agenda, because for every customer you lose it will cost you significantly to replace them.
You need to have strategies for increasing your revenue per customer.
Sell to More
This is probably the area that most businesses focus on, attracting new customers and increasing market share and penetration. You need more customers if you want to dominate your market and also to drive efficiencies and economies of scale which can help increase profits. But you need to be smart about how you go about this, and to look to keep your customer acquisition costs as low as possible.
One of the cheapest ways to attract new customers id through referrals from existing customers. If your existing customers are happy with your products and services how can you encourage them to become your advocates and to recommend you?
How can you set up win-win arrangements so that both of you benefit?
Remember, if it costs seven times more to acquire a new client than it does to sell to an existing client when clients are recommended to you much of this cost is saved and could be used to reward those who recommended you.
Affiliate programs take a similar approach, where you let someone else bear the cost of finding you new customers for a percentage of the sale.
There are many options for finding new customers, and you need to have strategies that best fit your business model, and also optimize your profitability.
Sell for More
I am always amazed at the number of clients I work with that undervalue the services that they offer. There are often several reasons for this: they lack confidence and so underprice; they don’t understand what the market can bear, or they don’t see the real value in what they are offering.
This last one can come from too much familiarity, which can lead to a form of contempt for our own goods or services which then leads us to lower the price.
Price increase is probably one of the easiest ways to increase revenue, but it does come with risk. Raise the prices too high, and we could lose business and customers.
But the same is true when our prices are too low, if you do not see the value in what you offer, then why should someone else.
One client, I worked with, we doubled her pricing. As she rightly predicted it lost her some customers, but it also attracted new customers who were both able and willing to pay the higher price, and she actually increased overall demand and revenue.
If you have a quality product then you need to sell it for premium prices, if you seel it at budget prices, it will be deemed a budget product.
There are only three ways to increase revenue, sell more to your existing customers, sell your products and services to more people, and to sell them for more money. By having strategies for all three of these will allow you to maximise your business potential.
Ignoring one or more of these just leaves more money for your competitors to take.