Education

There Really are Only 2 Ways to Grow a Business

March 5, 2008 | By: deaneparkes

One is to increase your daily customer count and the other is to sell more to the people who shop your business. More customers and/or sell more to each person…that’s it!

I often ask a business if their customer counts are growing and only a few know the answer.

So here are the BIG QUESTIONS:

• Do you keep track of your daily customer counts everyday?
• Do you know what the average sale is for each customer everyday?

You may be increasing sales by selling more to your customers however the # of daily customers you are getting maybe going down. This is not a good sign as if the trend continues eventually your business will suffer and by then it may be too late to recover.

I strongly encourage you to keep track everyday of your customer counts and the average sale per customer.

Example Spreadsheet:

Month

Day – Total Sales – # of customers – Average sale

Keep a sheet for every month. You will be able to have a quick reference to compare various days of the week, one month to another and one year to another. There are some people who track this information by the hour. Starting with the basics though is vital.

Here are some things that will be revealed and to consider:

• Helps assess promotions whether customer counts increased during a promo period.
• If you want to grow your business by a specific % in a month how many more customers at what average sale will it take to meet your target? One more customer a day at $25 average sale = $750 more in a month. Heck 10 more and look out.
• Does the average ticket per customer vary when different staff is working? Or on different days do customers spend more or less.
• Does your average ticket sale increase during a special in store event like a customer appreciation day?
• If you do not do much outside promoting are you maintaining your customer counts? Danny Wells, retail guru, feels a store loses 25% of their customer base in any given year. OUCH!!! Means you need to add 25% more just to stay even.
• Set some goals to increase the average ticket sale and support with staff learning new selling skills and how to present add-ons. If you get 1000 customers a month and you increase the average sale by $3.00 makes a nice $3000 a month increase.
• Develop in store programs to bring customers back to the store – bag stuffers, education seminars, coupons, special events, etc.
• Use your mailing list – you do have a mailing/email list right? – to invite customers back more regular.
• The number of customers is found on your daily cash receipt printout. This said you still must record this information for proper tracking and analysis.

The list could go on however I think you have the idea. By watching closely your customer counts and the average purchase of every customer every day you will have the vital information you need for how your business is ‘really’ doing.

Without this you really are growing your business in the dark, and as you know few things grow in the dark and what it takes to make them grow….well….maybe not the healthiest choice.