The question is as old as time: how to increase sales. While the answer itself can be summed up in one answer: customers, it cannot be easily solved without a deeper understanding. Sales are transactional exchanges between a customer and a business, for example – I sell hot chocolate to a customer in exchange for $4. I have control over the price and my product, but I do not have control over my customer. Afterall, you cannot make anyone buy your product.

In our previous guide post of ‘How to Start a Business,’ we briefly touched on customers through determining your target market, distinguishing if your business is B2B or B2C, and segmentation. Altogether this provided you with the understanding of who your customers are, but now we’re going to dive in deeper to understand their importance, pain points, detractors, and ways to boost sales and growth. This post primarily applies to B2C and B2B businesses that target a large number of potential customers.

Why are customers important?

Obviously your business cannot be successful without them. Customers affect your business’ profitability and your business’ reputation. More customers usually means more sales, and the more sales the better your business’ bottom line AKA net profit. If your net profit has been negative or very small, chances are you need to increase your sales and reduce your expenses if possible. You need to have enough customers, who can contribute enough product/service sales, in order to cover your costs and  expenses. 

A successful business is not one barely making ends meet or dependent on friendly purchases by customers who are friends and family. A successful business is one that has a diverse customer base steadily contributing to the growth of sales. Customers can be reached through various marketing channels, but the best and most effective one remains to be referrals. If your customer experiences an amazing experience/product, chances are they will refer your business to their network of friends, family and colleagues. They may even write positive reviews which will reach strangers and convince them to use your business as well. 

An amazing experience/product can simply be a customization/personalization such as an aux cord to play their own music when you drive them, a hand-written thank you note with their purchase, or simply greeting them by name and remembering to ask about their family.

What are the costs of a customer?

The number one cost of customers will always be marketing. Marketing attracts customers by showing them the way a product or service will solve their problem. As a business grows, it’s marketing expense will increase to keep up with this growth. The next cost of customers is customer service. Customer service, if you’re a business owner, can look like spending time replying to reviews, following up with customers on their experience, or even resolving problems before they happen. Think of customer service as oiling a door hinge so it can move easily with no complaints. As an owner, you will spend time doing marketing and customer service, and as time passes your business will grow. The biggest cost of a new business is time, and it is your most valuable asset.

Why do I not have customers?

There’s a number of reasons why your business may be failing to attract or retain customers. The key is to figure out which pain points your customers are facing. What’s the best way to figure them out? Talking with your customers face-to-face, in the forums, reviews, or phone. Perhaps there is something hindering their buyer’s journey, a product feature not living up to its name, or past customers detracting potential customers from purchasing your product or service. Another simple reason may be a lack of awareness that your product/service exists. Once you figure it out you will be able to resolve the issue and get back to attracting and retaining customers.

The Wrap

Customers are the rowers of your business boat. Without them, a wave of expenses will topple your business boat over. The answer behind how to increase sales is customers. Understanding who your customers are, what they need, and how to service them will allow your business to sustainably grow. Customer service is the key to keeping your customers happy and bettering your product/service to meet their needs. Next week we will discuss the essential components of a business plan. If you need any help feel free to contact us. At Chartd, we help small businesses thrive, not just survive. Hit that subscribe button below to receive our free detailed guide on how to start a business, as soon as we publish it.

Subscribe

Be the first to receive the full guide when it becomes available!