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The essential rules of customer growth

In Customers, Planning growth - 3 years ago - 5 min

The essential rules of customer growth

What do you need to do before going on a customer acquisition drive? These simple steps will help you get ready for growth.

Getting new customers isn’t easy. In many ways, it’s harder to find new customers than it is to sell to your existing ones. According to the book Marketing Metrics, the probability of selling to an existing customer is 60-70%. The probability of selling to a new customer is 5-20%.

When the odds are against you, it’s crucial to create a plan to make sure you’ve got everything in place before you start targeting new customers. The core product may be great and the potential market substantial, but success is still far from guaranteed for small businesses. Consumers are increasingly sophisticated and discerning and there are many things to get right if you want to attract and retain customers. Businesses need to engage with their market to find out what really matters to them if they want to succeed. Here are three steps to help you get ready to grow your customer base.

Be customer first

Debbie Keeble is the co-founder of family-owned sausage business Heck. Since it was founded in 2013, the business has successfully negotiated its way into all of the major UK supermarkets and now makes over 300,000 sausages per day. There’s no single reason Heck has thrived. Rather, its success shows how even a simple product, like a sausage, requires sophisticated sales, marketing, data analysis and negotiation. “We knew that, if we were going to get a listing in the supermarket shelves, we had to come up with something different. We did a lot of research of the market trends, spoke to customers and worked with a branding agency,” Debbie says.

Debbie discerned that there were gaps in the market and, by launching a gluten free sausage, she was fulfilling one of them. The market research also found there were more people who might be tempted to buy Heck products, people who weren’t buying from her competitors. “When we looked at the market, we realised it hadn’t really changed much in the last 50 years. The one group who didn’t really buy sausages was the younger audience and pre-family age-group,” she says.

Having key insight into the market has meant the company has been able to sell to supermarkets and protect their profit margins while doing so. The business began with a listing in Tesco and bought Tesco Clubcard data so it could understand who was buying its products. This proved to be an enormously smart move and strengthened Heck’s negotiating position.

I think the most important thing is that people buy from people.

“We bought some data from them about how we were doing from the Tesco Clubcard data and it showed the age of the shoppers and how many were new entrants. The data showed that over half were adding value as many were new entrants or were people who were spending more than they had been previously.”

But, while Debbie works hard on her relationships with the supermarkets, the business has also been keen to sell directly to customers. “We do shows and events across the country and then drive the footfall into the supermarket. The best way to raise awareness is for people to taste them,” she says. “I think the most important thing is that people buy from people. It’s that relationship with the buyer. Also, having as much market information as you can get really helps the sale.”

Embrace the idea of selling

Not everyone enjoys making sales and some even see ‘sales’ as a dirty word, says Martin Brown, founder of business consultancy Elephants Child. “They view it as an aggressive, intrusive activity, so they can lack the confidence to go out there and sell to customers,” he says.

Martin says that all businesses need to embrace selling and have confidence in their products. “Customers are everything. You must be ready and willing to embrace the idea of selling. Have the confidence to shout about why people should buy your products or services, and engage customers in a sales process,” he says.

Martin points out, however, that success is less about the hard sell and more about empathy with the customer. Business owners need to be able to see through your customer’s eyes and fully understand their motivations for wanting to buy. That means analysing the customer experience and mapping out their journey to the sale.

“Ask yourself: what benefits do your customers get from your product or service? Why do they choose you over the competition? To understand this, you need to look at your business through the same lens as your customers,” Brown says. “Think about every touch-point your customers have with your business. What is their experience at each stage? How can you improve each step – and therefore your overall customer experience?”

Build the right team

Many businesses start off by selling online. However, businesses that want to achieve high growth may have to use other channels, including traditional outlets. Guy Blaskey is the founder of dog food and supplements business Pooch and Mutt. The business began selling online but also raised awareness of the brand via major dog shows such as Crufts. Guy says the feedback from customers emboldened him to seek out supermarket listings as he was told Pooch and Mutt’s goods “looked like Waitrose” products. This led to a cut in margins but a surge in volume. “We were doing pretty well, but we weren’t going anywhere very quickly. Turning this corner meant there was more stress, but it made it more interesting,” he says.

The step change in the business caused Guy to re-evaluate how the company was being run. Guy came to the realisation that many successful entrepreneurs must accept – if there’s someone who can do a role better than you, hire them. This led him to bring in a sales director and says it’s one of the best decisions he has ever made. “Hiring someone extremely good to help with sales and production has freed up my time to both develop new products and “work on the business, not in the business,” he says.

Next steps

If your team is in place, you understand your customers and you’re ready to embrace sales, what’s next? How can you go from being ready to win new customers to winning new customers? Why not find out how BrewDog did just that, by turning craft beer into a profit.

If you are looking for support to grow your business please get in contact with one of our team on 08081 722350 or drop us an email: G.Enquiries@uk.gt.com