GROWING SALES USING THE LADDER

Customers

You might wonder what on earth I’m talking about. And fair enough.

However, you might have heard that Stephen Covey said:

This was perhaps a new twist on the quote from Thomas Merton:

Where am I going with this? Well, the growth of a business requires focus and it mostly comes from more sales.

Question: Where do sales come from?

Answer: Existing customers and new customers.

This leads us to another question: Where do customers come from?

Isn’tthat the $64million question?!

And, this is where focus and sales meet. You see, to sell to anyone — existing customer or not-yet customer — you need to understand their needs. That means you need to focus on them to:

1. Establish what those needs are,
2. Determine how you can meet those needs, and
3. Present your business and products as the solution to those needs.

Those of you who read my last post, Organization is Key, will understand that the next step is to document our findings. The end result is that we should have a defined ‘ideal customer’. After all, how can we find more customers of the type we want to have if we don’t know ‘what they look like’? And, how can we ‘treat them how they like to be treated’ if we don’t know their needs (and how they like to be treated)?

So, what do we need to know about our ideal customers? Well, it should be a comprehensive list, including items such as:

• Their typical income
• Their typical age
• Where they typically live
• Who (the type of people) they typically live with (and ages again)
• Clubs/associations they typically belong to & sports they typically play
• Their typical favorite colors/design styles
• Where they typically like to holiday

Obviously, some of these might be more applicable to some businesses than others. And some other attributes, not mentioned above, might be more useful to your business. But the point is, that the business must know, really know their (present and typical potential) customer.

Why do we want to know all of this? So we know what the customers want, and how to present it to them so their need can be met. Peter Drucker put it well when he said:

“The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”

Or, as Jeff Bezos put it:

In fact, Jeff went on to say:

Richard Branson takes an even more holistic view:

“By putting the employee first, the customer effectively comes first by default, and in the end, the shareholder comes first by default as well.”

So, we focus on the customer, seek to understand them (and their needs) intimately, and put in place systems to seamlessly meet those needs at the time they arise.

What Ladder?

We’ve got all this way and haven’t mentioned the growth ladder. What is it?

Well, it’s often called the Ladder of Customer Loyalty, and it looks like this:

Sitting, lying, standing at the foot of this ladder are the people mentioned in my last post (Organization is Key) — Suspects. As I noted in that post, these are the people we have yet to discover enough about to know whether they might be a likely future purchaser, a Prospect. In other words, we don’t know yet if they fit within the definition of ideal customer we have determined.

The rest of the graphic is fairly self-explanatory. Prospects are, of course, people or businesses who fit within our ideal customer definition but have not yet purchased from us.

So, looping back to the earliest quotes above, we must focus sufficiently to ensure we are leaning our ladder against the right customer wall — we must target those who fit within our ideal customer definition.

But, how do we use this ladder? Well, first of all, it helps us understand where our customers (or customers-to-be) are on their journey with us. This then enables us to focus (that word again) our efforts on helping them move up the ladder — which by default means more sales.

What does this look like in practice? Well, based on our knowledge of our ideal customer, we know what it is the customer needs, and how they like it presented to them. We also know how they like to be rewarded for their loyalty. Consequently, we develop strategies such as Lead Generation and Lead Conversion to bring Prospects onto the Customer list.

We also use our knowledge of customers and their needs to get them to come back — to buy again (so they become Clients). And again…

Then we use this knowledge to give Clients the opportunity to try new products — and become Supporters. So we continually keep them close — warm, if you will — and use our knowledge of them to make them feel part of the business, willing Advocates.

As Steve Jobs puts it:

“Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.”

As you can see, each of these steps/rungs will have a plan associated — the plan by which we will assist our customers to climb.

As you can see, this all ties in rather neatly with the first three of the four ways to grow a business:

1. Get more Customers;
2. Get more Sales;
3. Get Higher Average Sales; and
4. Improve Business Process Effectiveness.

Pretty obvious, don’t you think? Yet, so often lost in the busyness of business.

Some Clarifications

1. Obviously, the “more Customers” must be more Customers of the type you want to have. So, not tire-kickers, but Customers willing to pay your prices. In fact, willing to pay! And promptly at that.
2. More Sales may not just mean Customers buying more when they pay a visit, but could also mean they come back more often.
3. Number 3 is there to make it clear the focus must always be on profit. So, you don’t want sales at any price — e.g. at next to no margin — just to say you got more sales!
4. Improving processes refers to every process in the business — the processes Customers see, and the ones they don’t; the processes that affect what the Customers receives, as well as the ones that don’t seem to do so. In short — all processes.

Needless to say, the business needs a strategy in place for every aspect of these.

That’s how you grow sales using the ladder.