Follow the four compass points for paths that lead to growth
Have you considered all your options for growing sales?
You can think of the growth paths as points on a compass:
- North: Expand by adding higher priced offerings.
- South: Expand by offering a lower priced, entry-level offering.
- East: Expand your territory geographically.
- West: Expand your territory through exploration.
Adding higher priced products or services
In many ways, this is the most desirable way to increase sales because the margins are better. I remember an old friend who sold new cars. He had the job during one of the eras when gas prices shot up and people turned to buying smaller cars. He (along with the automaker) didn’t make as much money selling small cars because it basically cost as much to make and sell an economy car as it does a larger, luxury car. They both have four wheels that need to be installed, one engine that needs to be built and installed, the same number of seats, and the list goes on. Further, the cost is the same whether you’re marketing an economy car or luxury car.
In your business, you already have systems in place for sales and service. If you can work some higher-priced products or services into the mix, it’s the ideal way to increase profits.
Add a lower priced product or service
As big as I am on increasing prices, it’s a fact that even “freemiums” work for many businesses. If you need to get people through the door to introduce them to your superior products or services, you might try lowering the barrier to entry, in other words: your price.
Don’t cannibalize your money makers, but find a way to offer a stripped-down version of your product or service and devise a system through which you pull people up to your higher-priced offerings over time.
Expand your territory geographically
Have you sensed a demand for your product or service in other locations? If so, that’s a great sign that it’s time to expand. If not, find a way to test demand in other locations. Take out a short-term lease on a location, for example, or piggy-back in another business’ location.
But here’s what’s important: If you expand geographically, be sure you use the systems and services of your “home base” so you aren’t duplicating overhead, or fixed costs. You want to increase profit margins!
Expand your territory through exploration
Go where no man has gone before…or at least where your product or service hasn’t gone before. Find new markets and applications for your product or service. Talk to existing customers and see how they use your product or service. It might give you hints where new markets might be.
Consider tweaks to your product or service, or to your marketing, to make it more appealing to a new group of consumers. With so many immigrant groups in the United States, adapting your product or service to meet the language and/or cultural requirements of these new groups could expand your business.
Here’s one final note that applies to each of these “compass point” paths: Offer an impressive money-back guarantee. In every case, you’re trying to sell to people who haven’t bought from you previously. Dispel their fears and reluctance by offering a guarantee that eliminates their risk.
It’s a strategy that virtually always works.