The Four Ways to Exponentially Grow Your Business

Lead generation. This is finding and delivering new revenue to new people. As a business owner, we think of this as the way to grow, right? So you could look at your business and say, okay, how do we take our existing business in our offering and we add another high value product or service to our existing customers? Pricing strategy is the easiest way to grow your business and maximize the impact of the bottom line. Profitability retention strategy is essentially thinking of those holes in the bucket, right? Those holes in the bucket are leaking out faster than we've turned the faucet. Never fill the bucket. Hey everybody, and welcome to the Wealthy Entrepreneur Podcast. My name is Bob Govro. I will be your host for today. And this is the place where we dissect the elements that contribute to entrepreneurial success, from mindset leadership to profits and revenue. This episode we're going to focus on the four ways to grow. And this is probably one of my favorite topics. This is something that I love and typically incorporate to most presentations that I do. Because for us as entrepreneurs, we're growth minded and we're focused on how we can take our business to the next level. If you focus on these four elements, you will take your business and continue to grow and continue to be successful. Now, we recently had an episode with Alex Scherfen. Alex Charfen, or Simple Operations, talks about processes and systems and, and at some point in our business, we have to incorporate these in here. But if we're looking at how we continue to add revenue and add growth, or at least sustain it, these are the four ways that we can do that. Now for those of you who have been hanging around me a little bit, you know, I've had the opportunity to work with greats like Tony Robbins. And when I worked with Tony, there was a really great, maybe even arguably one of the world's best marketing minds, Jay Abraham. And Jay Abraham talks about the three ways to grow. Now, I've built off this, so this is really credit to Jay in his three ways. But I found a fourth way that, you know, if we don't have this fourth element in here, we are not going to continue to grow. So I've added a fourth element. I've built off the three from Jay Abraham and I want to share those with you today and I'm going to jump right into it. So the very first thing that I want to talk about is lead generation and this is finding and delivering new revenue to new people. Now this is typically, you know, as a business owner, we think of this as the way to grow, right? We're Doing our marketing, we're then marketing to getting new leads in. We're then reaching out to those leads to set up sales calls. And then we're selling to those people that we've had the opportunity to. Whether it's our product or service, we're going to sell them that and maybe a certain percentage of those will continue all the way down to closing. And you might find that, you know, as far as the percentage goes, you might only get 5% of those original leads or even maybe less, depending on how your lead quality is. All the way from leads in to meeting booked, to quoting and pricing and to them actually buying. So the idea would be that there's a formula for this, right? The number of leads that we get in and the number of people that we sell times the price equals revenue. So number of people in which goes again, lead in meeting booked. From meeting booked, we do proposal, proposal to actually selling and closing the deal and collecting the cash. So all of those things times price equals revenue. Now this is our new revenue growth. So if we want to have, you know, focusing specifically on the first way to grow, which is lead generation, if we want to focus on this, all of those elements have to come together. But we could put a projected growth plan on here and we can actually calculate it out as a formula to say, if we have enough quantitative data, we can say, well, we know from, you know, top to bottom, we've got 5% close rates. So we need X amount of leads per week to hit a 10% revenue growth goal in new lead generation. And I think that's fairly reasonable, right, to look at something like a 10%, because this is not the only way that we can grow. It's the first way, but it is really the most difficult because if we're marketing to a new group, right, they need to know who we are, they need to like us, they need, they need to then trust us enough to pay us money to deliver a product or service for them. So it does take quite a bit of time to warm these leads up and get them ready to buy so that they know like and trust us and then we get that revenue. Now, I want to talk about the second element of how we grow because it's much easier. So the first one, again, lead generation, no, like trust, lead in, meeting booked, proposal out, sale close. This is a new consumer where we don't really know their buying behavior or patterns yet either, right? So maybe the most challenging area of growth, the second area of growth that we jump into is going to be on Selling additional services or upselling our existing services to our existing customers. So we already have a relationship with them. We already know that they know like and trust us. It's maybe offering a new product or service to them. So, for example, we're in the CPA business. We also opened a law firm in house so that we can now take our existing CPA clients, offer them legal services. This is an ability to create more revenue and support our clients better by offering an additional service. So you could look at your business and say, okay, how do we take our existing business in our offering and we add another, you know, high value product or service to our existing customers? Why is this great? Well, and there's a second component to this. There's a part B. But the, the real main reason is they already know like and trust us. We've already got a relationship. We actually know if we like them as well. So if we like them as well and we want to continue working with them, we can upsell them into other areas that we can support them. Now, I had a mentor, you've probably heard me talk about him before. His name was Rob Nixon. His name is Rob Nixon. Really good friend of mine. I worked with Rob way back in early 2009, 2010 on, and he was my first business coach. Really helping understand where we could take our business and what the potential opportunities were for us. But he said something to me back then that is kind of stuck with me. And he said, Bob, you know, when you're looking at your existing customers, when what other services can you offer them? Can you offer, you know, someone who you do accounting and tax work for, can you offer the bookkeeping services? Well, yes, we can. Well, have you told them that you can do that? Because if you're not telling your customers, your existing customers who are happy with their experience with you, if you're not telling them about the other services that you have and that you can offer them to support them, you're doing them a disservice. Because if that would improve their life or help make their life easier or have a greater appreciation or enjoyment in their life and you're not offering it to them, that's on you. And that's actually a downfall. And you know, I took that as a perspective, right? Because we think, oh man, we don't necessarily want to always be asking our clients for more money and more services or products to sell them, but really we're doing them a disservice if that's something they're looking for. And we can make it easy for them and it makes their life better by having that or experiencing that and then really we're letting them down. So I loved that perspective. So the idea would be, when we get a customer and this great opportunity for email marketing or, you know, SMS text marketing is to have a CRM platform where we can communicate with our clients and we can make sure that they're up to date on our offers. And maybe they don't necessarily need it now, but we want to remind them of these different offerings. And I can tell you from our experience, we always ask for customer feedback. A lot of times when people give feedback about proactive related services, people aren't aware that we actually have a coaching program that proactively helps them run and be more successful in their business. So, you know, we need to do a better job in communicating that with our existing customers to say, hey, you know, if you want assistance and support in growing your business and coaching you to the next level in your business, we can actually offer that. And if we haven't put that out there, then that's on us. And we're maybe letting our clients down because they need that support and maybe they don't, but maybe they do. And I would say, you know, looking at this alone, you likely could offer, you know, additional services to customers and get another 10% revenue growth just by making sure that everybody's aware of the products and services that you offer. But there's a part B to generating more revenue by your existing customer base and part B is a retention strategy. So I would challenge all of you that if you've got 10 customers, you could have a hundred customers or a thousand. But let's think of 10 customers. If you have 10 customers, could you get one person to send you someone just like them as a referral? So if you reached out to 10 people and said, hey, you are our favorite customers, we would love for you to share your experience with someone you know that may be looking for a similar service. Would you be willing to do that? And there's different referral based strategies that we could look at. Now that's outside of the scope of this, this session today, this podcast, but just know that there's opportunities to review your referral strategy and implement a system, maybe even an automated system to make sure that when you have a happy customer that you're asking them for a referral. Now, if you have 100 clients, likely you get 10. If you have a thousand clients, you could likely get 100. There's 10% of new revenue growth Just by asking for referrals, there's no cost in marketing. Their know, like and trust factor is high because they're being recommended by someone they know, like and trust. So the marketing efforts and the sales process becomes easier. Referrals are a great source of new revenue. So whether it's taking your existing customers and offering them all products and services that you have and or looking at an opportunity to get referrals, I would suggest that it would be an easy 10% growth strategy in there. By looking at both of those, you know, I would say you could probably do 10% each. That's an exciting one. I really love that. Now, my favorite one of all is number three. And the reason that it's my favorite one overall is because the first two require our company to deliver more. Right. Whether we're getting new leads in and we're doing all our marketing, we're closing a sale. But we have to deliver more. So that means more volume. We have to have more capacity in our business, likely unless we have available capacity. So to deliver that revenue, it's more work to get a referral, more work to sell an additional service to an existing customer, more work, all good. That's part of a growth strategy, and we want to continue to deliver more. But number three doesn't require us to do any work or any more work than we're already doing. And number three is related to pricing strategy and pricing increases. So if we think, for example, you know, you sell $1,000 product, let's say your gross profit, let's say, for example, where we're selling a deck and it's $1,000, it's a small deck. And material cost in there is $300. The payroll cost is $200. That leaves us with $500 gross profit on there. Now, if we were to increase our pricing from $1,000 to $1100, our cost is still 500, but now we're making $600 of overall profit. That's increased from 500 to $600. We're not doing any more work. We're just pricing it differently. And there's a lot of good pricing strategy discussions out there. One of my favorite books that talks about how to value pricing in a great way as Alex Hormozy $100 million offers. He talks a lot about in their pricing strategy and making sure that the value you're relaying to the customer is higher than what you're charging. So if a consumer is feeling like they're receiving something at a discount. So if they Think they're receiving a $2,000 deck and you're going to charge eleven hundred dollars. And. And by relaying that information, you're showing testimonials and you're showing examples of the quality that happens. You show examples and case studies of how it's happened on time and you've delivered and how you answer the phone when people call you. All of that value is much higher than anyone else's offering. Even if your price is higher, people will be willing to spend it because you're showing more value than what it is you're actually charging. And I would also say, you know, I've got a great story, and for those of you again, who've been around a little while, you'll know this story. I've got a coffee shop owner. They were struggling with their coffee shop business, and one of the ways that they could make it sustainable was to increase their prices. Now, huge hesitation in price increases, like a lot of us have, right? If we increase our prices, our clients will go away. I can tell you that is not going to be the case 99% of the time. And you might be thinking, I'm the 1%. Fry it. Okay, so here was the example. Really competitive coffee shop market. In fact, there's coffee shops all over the place. There's one right across the street. And we went in there and the coffee shop wasn't making money. Now, if they did a 10% price increase, it would have them making profit. It didn't require them to get any more customers in a competitive market. They offered a super value add service. It was attached to a whole other business, which is where there was all these other complimentary services. So for them to increase their price and their ambiance was way better than everywhere else. It's not a huge discrepancy in value offer versus the price that they charge. Now, the business owner thought it wasn't going to work. And I said, well, we don't really have much of a choice but to try it because you're losing money. And this is a really easy way to test out the pricing strategy across your business. So she tested it. She put in 10%. And I follow up the following week. And I said, okay, you put Your price up 10%. What has happened? Well, nobody said anything. Everybody paid the 10% more, and away we go. She said, except one individual customer. One individual customer brought exact change in, and he was a senior, and he came in and he was, you know, 10% short. Let's say it was $2 for coffee it went up to 220. He was 20 cents short. So I said, well, what happened? She said, well, my staff said, no problem. Here's your coffee for $2 today. But just so you know, next time bring 220 instead of $2. And I said, did he come back? She said, yes, he was back the next day with 2:20. No issues. Now, this is in a very competitive environment where that price sensitivity in that spot, especially with people who are bringing cash in, it could have been a challenge. But because there was more value offered in this transaction than the 220, that individual is going to come back. He likes to come in and sit in the cafe, ambiance, music is playing, the people are wonderful. Everything is great. The complimentary services are huge. There's more value in there than that increased price. So there's still a discount felt because they're able to relay the value to that customer more than they're charging. If you can do that, the price increase strategy is not going to be an issue. Now, again, let's look at this pricing strategy. If we increase, if we're $100,000 business and we go to $110,000, that $10,000 is pure extra profit that hits the bottom line. If you're, you know, a $10,000 net income, this new $10,000 that you're adding with this 10% price increase doubles your net income. You know, and I know I'm using $10,000. It's not that substantial, but it could be a hundred, could be a million. Pricing strategy is the easiest way to grow your business and maximize the impact of the bottom line profitability. It is my favorite, and I can tell you again from numerous case studies across our business every single year, there is little to no resistance in pricing. And I'm sure if anybody is listening to this episode, you've tried it in the past or you're going to try it, please leave a comment in there of the response because I want everybody to know how little sort of response there is to a pricing increase strategy. And I can tell you for myself, and sometimes, you know, I was just talking to a friend and a colleague about this. Sometimes I don't always take my own advice. But this year we did a price increase on some services that we hadn't increased since 2008. Now my staffing costs has gone up substantially since 2008 to the point where I was actually losing money on these transactions. Not a very smart business decision on my end to be able to not increase those prices over that period. Of time, but we had to get it up to speed. Now, we did have a bit of resistance because it wasn't a 10% increase. In some cases, it was 100% increase. To get it back up, and it wasn't even up to market value is just to an increase where we weren't essentially losing money. We were making a little bit of money off of those transactions. Now, we did have a few people that left, but I can tell you they left. But because we offer so much value in this transaction, we've had almost all of those people come back over a period of four months. And they're not coming back at the price we offered there. They're coming back at a price that is the new market value price. So their price increase might have been 200 or 300% since we offered that. So I can tell you, you might get some resistance. But if you offer that value as part of that product or that service and people can see it, they will continue to buy from you. And maybe it's not today, but they will be back and they will continue to support you. Okay, so those are the three, and those are the Jay Abraham three ways to grow. Now, here's where I want to differentiate this, and I want to talk to you about my metaphor. So my metaphor of the four ways to grow is the bucket, right? So you've got your hose, you've got your bucket, you've got your lead generation. You know, that's a first level of turning the faucet on. So you're dripping in there. It's growing at a 10%. Right. The water is starting to rise. We then get our additional service offering to our existing customers or, and. Or we're asking for referrals. That's the second level of the faucet. The water's starting to come in faster. And then we've got the third piece, which is the most explosive side because it leaves so much more water in the bucket because our profit margins increase. That's our pricing strategy. We crank that faucet up and the water is starting to rise. Now, here's where the challenges as we continue to grow, if we don't have really good client experiences, we're going to be losing clients on the other side. And so for me, the fourth way to grow is to maximize our retention strategy. And a retention strategy is essentially thinking of those holes in the bucket, right? If those holes in the bucket are leaking out faster than we've turned the faucet on, we will never fill the bucket. In fact, our Bucket could go dry, aside from the very bottom, because there's so much water draining out. So the idea would be to fix the holes. And even if we fix the holes and the faucets turn down a little bit lower, the compound impact of that growth will continue to rise and eventually we'll hit the top. Now you might ask, okay, Bob, so what do we do about a retention strategy? How do we maximize our retention? Well, first and foremost, we need to make sure we're doing what we said we were going to do. We need to answer the calls, we need to deliver the product or service on time. And then, and this is the key, guys, and this is where we find out where we're missing or where we could do better is we send out client surveys and a net promoter score survey that says, how likely would you be to recommend this service to someone else? And if we get a 9 or a 10, those are our promoters. So these are the people. The promoters are the people who. We actually go back to our referral strategy and we say, can you refer people, please? Because you guys are the ones shouting from the rooftops how great your experience was. Huge. Brand recognition in those moments, those are your case studies, those are your testimonials, those are your great referral sources. And likely those people are primed to buy additional services from you because their experience has been so great and they're excited about continuing to work with you again. Then you get sevens and eights. And in a 7 and 8 out of 10, what that is is a passive, right? So passive, essentially meaning that they're not shouting from the rooftop, they're not unhappy, they're just kind of meh in the middle. And what we want to look at is the feedback in those individuals, how we can quickly get them to a 9 and 10. What is it? What value add? Could we go back to them and offer them or what, you know, slight issue or variation in what they were expecting? Could we go back in and solve so that they become a 9 or a 10 and they become a promoter? And this is an opportunity when we get that feedback, to address it quickly and go back to our customers and find out how we make them a promoter? Because they're going to be the most primed. They're giving you the feedback, they're ready to make this work. And if you go out of your way to make sure that you're resolving any misunderstandings or any challenges that were faced in the delivery of your product or service, these people will come back and be like, you know, what this happened, but they fixed it. They made it right. Super excited about it and very happy about the experience. And then you've got anyone who is 6 and below, and these are what we refer to as detractors. Now, obviously, a 0 detractor and a 6 detractor are a little bit different. We want to address this because this is where any of our negative reviews come in. This is where we have people sharing their displeasure for working with us. And we don't want that because that's bad for a reputation. We definitely don't want to ask those people for a referral because that will open up the opportunity for them to share their displeasure and to say, don't work with this group because they haven't done a very good job. Now, the opportunity with this is one, you're getting the feedback to fix this. In the future, you might be able to resolve this situation. And I can tell you that we have in the past, if there's been a miscommunication, we've reached out and we've talked to the individual business owners and we've resolved it. And they not only were upset and then were, you know, a 5 or a 4 or a 3, and we moved them to a 9 or a 10 because we fixed it, we resolved it. We came up with a plan for the future. We delivered, as we said, the next time they're a promoter, there's a huge opportunity in there to convert people into return business. That's 50 fixing the hole. And some people have maybe decided at this point, you know what, we don't want to work with you anymore. And it's going to happen along our business journey. And unfortunately, we have to accept that. But their feedback is invaluable to preventing this sort of circumstance from happening again. So, one, I think we need to reach out to the individuals, share our support for and their understanding of how the circumstances caused this, make it right, even if they don't come back. Now, we also use that feedback to make sure that that same situation doesn't happen with anybody else. And when we do that, we're fixing another future hole. Yes, it may not get back some of the water that spilled out, but it's fixing a hole so that as our tap is on, the bucket will continue to fill. Those are our four ways to grow. And I can tell you, you know, this is something that Tony Robbins that teaches at his Business Mastery event. Obviously, Jay Abraham talks very highly about this. I'm a huge advocate for this. One of the strategies that you can put into your business. You know, aside from a retention strategy, this is going to be slightly different, but a 10, 10, 10 strategy, 10% new clients, 10% upsell or referrals from existing customers, and a 10% pricing strategy. If you do that, you actually get a compound effect of about 3,35% growth during the year. So this is an opportunity for you to look at how your business can continue to grow. And I can tell you I've got one individual client, his name's Scott. He's an electrician. He's continued to pursue this as a strategy and one of the challenges that he's had is finding new staff and maybe some people can relate with that. But he's been overwhelmed with the demand for his services because they do such a wonderful job in delivering high value to their clients. Now, because he's got a challenge in getting more staff, but he's overwhelmed with demand for his service, there's a huge opportunity and there has been a huge opportunity for him to raise his prices. And I was just chatting with Scott last week and I asked him what's been the feedback. He continues to increase his prices. His profit margins are over 50% in his business. That's somewhat unheard of. And he's like, nobody is saying no because of the value that they're offering on the other side. And that is a really great strategy for him to. Because he's challenged in finding, you know, really good quality people to come join their company. So look at the strategy that's in place. Look at the opportunities that are in place. Maybe marketing is a great one. Low hanging fruit for sure is a referral strategy. If anything, you can introduce a strategy in your business from these four concepts that will at least help you move the needle forward in growth in your company. Listen, if you've got any comments, feedback. This has been on the four Ways to Grow. Make sure you like this episode. Follow it so that you get access to the next release. They'll notify you. Put any comments in here. Questions? We would love to answer any questions you have. Please feel free to share this out. This is information that your fellow business owners need to understand about the strategy for growth. My name is Bob Govro. This has been the Wealthy Entrepreneur Podcast. So excited to see you. Next time, thank you for joining and have a wonderful day.