If you want an easy way grow a business, you have come to the right place. For over 30 years my business has been helping small businesses grow. I haven’t finished the Easy Guide to Growing a Business but I am working on it.
Telling you how to grow a small business is easier if I share with you some of the inside story of how things really work in my business. Like any business, I want to grow my business too. I want better toys, and more time off like anyone else that owns a business. So lets chat about how my business helps other businesses grow.
The idea for this blog post started a couple of weeks ago with a call from a client. Normally when any client calls or I call them it is simply a monthly or quarterly review. Nine times out of ten the numbers go up, but once in a while we get it wrong and I have more work to do.
When the client set the appointment on my calendar, I looked and his numbers were good. When he started talking the conversation went way differently than I expected. He wanted to talk to me about the number of new clients that he was getting each month. Since he was a long term client and had good steady growth on his SEO numbers I thought the call was to increase his budget. It wasn’t.
When he called to talk about how to grow his business he started with the statement “Ten years ago we took in 10 new clients a week, now it is two.” His tone wasn’t happy and given that he had been a very long term client, a little panic set in as I started pulling his companies profile up on my screen. Thankfully he finished with “And we are making more money than ever.” I think the whole block felt the relief.
The very first thing on my screen was a note that they didn’t want more clients, they wanted better clients. I took this note in a meeting about eight years ago. When I reminded them of that meeting they said “Oh yeah, that is right”.
The call went very well after that and we discussed how to get more of the higher profit clients.
When you grow a business you have two choices, get more money by getting more clients, which is what I call the Wal-Mart method, or get more money by getting more out of the clients you have, which I call the Poor Richard method of growing a small business, as a nod for Ben Franklin’s fictional “Poor Richard”.
Now don’t get me wrong, I am not saying that Sam Walton wasn’t a smart business man. If you use the dollar as a bench mark the man kicks my ass. I’m just sayin. But for a small business the Poor Richard method is how I have grown my business and helped my clients grow their business. It is also how I watched Apple and PacTel Mobile grow into the power houses they are today. If you haven’t heard of PacTel Mobile, they were a little 35 person office when I walked in the door that became AirTouch and eventually split into three companies, one of which is Verizon. I was simply a network engineer and student of business at that time. I get no credit for it other than to say I watched a very smart group of people create a company out of thin air from the inside. Sadly Verizon is run completely differently then how Sam Ginn ran it when I was involved.
Jimmy Morris, the founder of Bass Pro Shops also uses the Poor Richard method to grow his business. I once bought a fishing lure kit from his catalog for $9.00. I have been a customer ever since. Mr. Morris makes more money off of me every year and I don’t even fish any more. This year I visited the granddaddy of all out door stores and went to his place at the “Top of The Rock”. I am embarrassed to tell you how much Bass Pro Shops and it’s affiliate companies took out of my pocket this year, and yet I am looking forward to going back which means I’ll probably spend more.
One of the great secrets I learned at Apple about how to grow a business was to “Hold on to every customer you have like they are your last”. My entire company runs on Apple computers, I have iPhones, and iPads controlling my home and have an Apple Watch telling me it is time to stand right now. I tried a windows phone once, and then the new iPhone came out and Apple welcomed me back with a deal better than they gave new clients. That is smart business.
I am typing this on my new MacBook Pro.
From that philosophy of treating the clients I have better than the clients I don’t I have grown a business that is very easy to manage. I like my clients, and they like my company because we take care of them. I do very little advertising, my clients do it for me. We do use a marketing automation platform though.
All of this comes to mind because I am about to change my cellular carrier. Another former employer who I have been quite loyal to hasn’t been loyal to me, and now it is time to repay the favor. Five years ago I had Verizon FIOS TV, Telephone and internet at home and Verizon cell service. A couple of years ago Verizon sold FIOS to Frontier who has been raising rates ever since.
The TV and Wireless Telephone business is highly cut throat, and the best deals go to new customers. If I didn’t have FIOS I could get the same service at half the price for two years. Do they offer me, the long term client that deal? Nope. I would change TV companies but Spectrum never shows up or when they do they don’t know the rules and want to staple wires on the side of my house which is already prewired.
If Spectrum ever agrees to just connect to my house at the d-marc and call it good, Frontier loses a client, at least for 6 months so I can get the better deal. This is just bad business. In the cable and cellular phone world they call this “churn”. There are only so many customers so instead of trying to keep the ones they have, these companies try to steal from each other.
Verizon just jacked up the prices on my cell phone, and as a current user I was told I can’t get the special prices. So I went three doors down to T-Mobile and cut my wireless bill almost in half. If the coverage is 95% of what Verizon is, I’ll probably be happy with the decision. If not, in six months I’ll be eligible to get a deal at Verizon again. For now I am no longer a Verizon customer in any way shape or form.
Letting go of long term clients is the dumbest thing I have ever heard. Tell the client who has been paying you for five years or more, “Nope, you have to pay the higher price” or “We are going to sell your account, we have other fish to fry”. If I ran Verizon, I will tell you, the first year would be the most expensive and we would reward our loyal customers with the best deals and best pricing. The longer you are a customer the better the deal. Eventually people figure it out and get on board.
Sam Walton and business schools call the Walmart way the way of the “loss leader”. Lose money to get them in the door and then you have them. Marketing guru Dan Kennedy talks about this in a lot of his work, with the key difference being, once you have the customer, over deliver. Verizon hasn’t over delivered to justify the higher cost. Bass Pro Shops and Apple have.
Just last week I purchased a new Apple MacBook Pro, and out smarted myself trying to move the information from my old mac mini to the new MacBook Pro. Apple didn’t belittle me or charge me, they just helped me fix my mistake, free.
It is true and sad that for a large percentage of the population they don’t think a week into the future about their phone and cable service so they will jump ship without thinking about it. The Auto world is the same way. Remember when you were a Ford guy or a Chevy guy or a Dodge guy? Or did I just date myself. Today what are we? We are whatever the new shiny car is. Tesla had a great following and now as the big guns catch up they are losing traction.
Personally, I cancelled my Tesla order for another Chevy Volt. The Second Generation Volt is a great car. We just didn’t give it a CoolToys approved stamp because it wasn’t that much better than everything else out there.
When that lease is up on the 2nd Volt, the new Jag i-Pace electric is looking really really good. Chevy has treated me well for two Volts, but unless they come up with something really Cool when my lease is up they haven’t treated me well enough to keep me from looking elsewhere. If it isn’t the new Jag i-Pace, the new electric Porsche and BMW are also looking very interesting. Who really needs a Tesla anymore? I ordered Tesla batteries to backup the solar on my house and a Tesla 3. Since then better options have arrived so I cancelled the car and the battery. We churn because companies aren’t loyal to us.
As a small business owner, you can’t afford not to be loyal to the people who feed you. If you aren’t you don’t have a chance of them staying loyal to you. Yes there will always be a better deal out there, but have you seen what Tiffany’s gets for crystal candle holders? $15 at Home Goods, looks pretty close to $300 at Tiffany’s.
For a small business this is a hyper critical lesson in how to grow your business. A small business owner doesn’t have billions in cash flow and stock holder money to gamble on signing up new customers at the expense of old customers like cellular companies and cable companies. Wall Street has this bazaar fascination with growth even if it makes less money. Pets.com was growing like a weed with a sock puppet mascot and it never made a dime. Eventually it died. You can’t afford to follow that lead.
The great secret that I use when I help small business owners grow their business is to start by looking at their existing customers and what services or products that the owner offers and the customer hasn’t purchased. We then look at the customer experience. If there isn’t a great experience, that might be why they aren’t coming back for more.
Ten years ago I spent forty dollars on a razor at the “Art of the Shave” store. My wife thought it was a crazy amount of money for something I could buy at Walgreens for $10. I figured she spent $50 on a haircut back then and I spent $5 on a haircut so I could buy a fancy razor.
Yesterday, I spent $85 on a shave. Yes you read that right. I walked into a “Art of the Shave” store in the Mall of America and dropped almost a Benjamin on a shave. My wife spends twice that on a haircut and my barber is still $15 so I did it. It was the first time I had ever done it and I will be back.
I didn’t have an appointment but when I checked on some shave lotion, the cashier noticed I was a long term customer and pointed out that they had an opening in 30 minutes. I took it. Better yet, I was able to take advantage of the empty time slot after mine. I didn’t get charged a penny more but my 30 minute shave turned into almost 90 minutes. That is how you make a customer for life that doesn’t care that he can buy the same Gillette razor at Walgreens for $15. Yes the blade is the same but the rest of the stuff and the great service is why the Art of the Shave got my business and why, like Bass Pro Shops, they will likely get more of my money every year.
If you don’t have time to figure out what you can do for your customers that you aren’t already doing, book a call, we are here to help and the first call is free.