So it is clear: Survival and growth depends on more cash coming into your business than going out. Anything else is window dressing.
This means more revenue than costs, with revenue coming from acquiring and retaining more customers, so this article will focus on some key customer acquisition principles.
Here’s an example from my time at Virgin, an incredible learning experience.
Richard and I thought Virgin should take on the UK cosmetics and toiletries industry. We hired two top guns from The Body Shop and gave them a war chest of 20 million pounds and free reign to roll out a network of high street stores.
Millions were spent on product design, store design, branding and marketing plans. Elaborate store designs were rejected in favour of even more sophisticated ones; each made the Taj Mahal look like a block of council flats.
Marketing staff grew exponentially. Management failed to seek outside help and even when I took Richard to the office, they weren’t interested in his views. All staff was scripted, and this was all before Vie had made a single sale!
Fortunately, Richard and I had been adamant from the start that Virgin Vie should also be sold directly through Tupperware party style cosmetic evenings. So what happened? The stores crumbled and direct selling hit the roof.
Through experimentation, hard work and inspiration, even with a very limited budget (there is also a learning there!) Virgin Vie became England’s second-largest direct selling company. It boiled down to three interrelated techniques that I have seen applied in every successful business.
First technique: The pitch
A pitch is your clarion call to customer, a compelling call to action that resonates with the customer.
All marketing is a pitch. In retail this includes advertisements, the position of counters and point of sale material.
The trick: make sure you get the customer to do something. Your pitch cannot be wishy-washy: better to alienate some customers than be ignored.
Second technique: Applying the ’80:20 rule’
Once something is 80 per cent ‘perfect’, get on with it. This applies to pretty well everything in the business including product and marketing initiatives.
Why waste your time, money and effort waiting for the perfect solution when you don’t know what the perfect solution is?
Third technique: ‘Leap and learn’
Successful business leaders understand that they don’t (and can’t) know everything about their customers until they engage with them, so learn from genuine feedback from real life customers.
Take the learning then reload and try again. When it’s working, pull the trigger and spend big, confident of the results.
Brad Rosser is a serial entrepreneur who helps entrepreneurs build successful businesses and Sir Richard Branson’s former right-hand man for start-ups.
- Reader question: Can someone block the sale of my business?
By Adam Zuchetti
- Slashing customer response times no pipe dream
By Adam Zuchetti
- Legal view on dealing with errant employees
By Geoff Baldwin