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There are only three ways to grow a retail business, and in this episode of Real Retail TV, I’ll share what they are, what they mean for your retail business, and how they work together for the future growth of your retail business.
The first way to grow your retail business is to get new customers. And getting new customers is important because new customers are the lifeblood of your business. You’re always going to lose customers, so you need to keep finding new ones. And actually, you need to find more new ones than you lose so that your customer base, that group of people who continue to buy from you, continues to grow.
Getting new customers requires a specific set of marketing activities. You can give away gift certificates to your best prospects. You can advertise on social media. You can engage in WhizBang! Cause Marketing to get local nonprofits to send their members and supporters to you. You can do and endorsed mailing to get other local businesses to recommend your business to their customers. You can also have promotions and special events that are designed specifically to get new customers in the door.
There’s lots of ways to do it, but let’s just recognize that there’s a specific set of strategies and activities and tactics that you need to use. But of the three ways to grow your business, getting new customers costs the most money and it’s the most work. It’s good work, but it’s work.
The second way to grow your business is to build your average sale. And you can compute your average sale by taking your total sales and dividing it by the number of transactions. And the best ways to build your average sales are pricing for profit, meaning strategically raising your prices, and bundling, which is putting like merchandise together in a bundle so it makes sense to buy the bundle. Let me give you an example. A value meal at McDonald’s is a bundle.
But hands down the best way to increase your average sale is through sales training. Not just training. Not just an event. But creating a service culture that sells. When you have a team of great, properly trained people, they naturally and automatically and enthusiastically recommend the appropriate add-ons. They showcase your better-quality merchandise. And they make sure that your customer leads with everything they need.
It’s my experience that in most stores there is at least a 25% gap between the average sale of the average salesperson and the average sale of the best sales person. That gap represents opportunity. Building your average sale is the quickest, most efficient way to grow your business, but it also has limits.
When I had my retail store, the Mackinaw Kite Company, our average sale was about $30, and we worked hard to get it to $30. But no matter what we did, we were a toy and kite store. We were never going to get it to $100. The nature of your merchandise will determine the ceiling of your average sale.
There are many, many ways for you to increase the number of sales per customer. You can get more sales by giving your customers the kind of experience that makes them want to come back. You can get more sales by building relationships with your customers correctly, using email marketing, social media, and newsletters.
You can get more sales by doing everything in your power to show them the love that will engender loyalty to your store. And speaking of loyalty, you can have a kick-butt loyalty program. The retailers that do the best job of getting their customers into their store more often also have lots and lots of fun, interesting promotions that bring them into the store.
Again, there is a specific group of strategies and tactics to employ to get your current customers into your store more times. And by the way, while it’s really, really important to get new customers and do everything you can to increase the average ticket, the big money, the take long, long vacations on sunny islands with a coconut drink in your hand, comes from getting more transactions per customer.
There it is….the three ways to grow your business. Think about how you can break it down to build your sales up. Think about every single one of the three ways. So your action item for today, should you choose to accept it, is to sit down by yourself or with your team and identify ways that you can increase each of the three ways to grow your business.
I hope that you found this episode of Real Retail TV helpful, and if you did I would appreciate it if you liked it, if you shared it, and of course if you have not subscribed to our free email WhizBang! Tip of the Week, I would encourage you to go to whizbangtraining.com and sign up today.
There is three ways to grow your business. I’m Bob Negen. You’re watching Real Retail TV. And I will see you next time.