You can also increase sales by finding new sets of customers to sell to. The benefit of new customers is that they are an entirely new, and as yet, untapped income stream (at least for you).
If you plan to expand your business, at some point you will no longer be able to rely on existing customers – after all, they only have so much to spend. You will have to venture out and find new ones. Four ways to find new customers are shown below.
Look in your Existing Market
If you already have a target market, it is unlikely that you have made a customer of absolutely everyone in that market. It’s likely it still contains ‘untapped reserves’ as well as your competitors’ existing customers. Some options for doing this are set out below.
Search Engine Optimisation (SEO) and Effective Websites
These days, the internet is the first place many consumers look to find businesses which offer the products they are interested in. It is therefore important that your business has some presence online so that it can be found quickly and easily. Given there are many businesses online these days, you want to make sure potential customers find yours. To do this, you need to think about Search Engine Optimisation (SEO) and what it means to have an ‘effective’ website.
SEO is a process to help improve your website so that it’s more attractive to search engines. If it is attractive, when people type in particular keywords for their search, your business will feature higher in the search results. Google is by far the most popular search engine in New Zealand, so it’s important to make sure your business appears high in Google’s search results.
On Google, people usually click on one of the first couple of search results – few click on a result that is fourth or fifth in the list, and hardly anyone ever looks at the second page of results. Being one of the top results means the person searching is significantly more likely to visit your website.
There are many things you can do to improve your likelihood of being near the top of relevant search results. Some examples are as follows:
- Identify keywords that people are likely to use when searching and use these words in your website content (especially in titles and headings, but also in the filenames you give to the images you upload to your site).
- Get other websites to mention or link to your business (and its contact information). When other websites link to you, Google takes this to mean that your website is more important.
- Make sure that everywhere your business appears on the internet, your name, address, and phone number are consistent. Search yourself and make sure that online directories have the right information.
- Ensure your website works well on mobile phones.
- Regularly update with quality content. Use text, images, videos, and links – the more quality content you post, the better. Again, ensure you include keywords in the content you post.
- Use Google My Business and encourage customers to review your business on Google.
- Use social media and try to get a lot of customer engagement. You want people to ‘like’ Facebook posts and tweets about your business.
Remember to check that your SEO is working. You can use Google Analytics to measure its effectiveness – e.g. that you’re getting more website visitors. Google Analytics can show you how many visitors your website gets, how long they stay on your site, how they find your site (including the keywords they use), and the path they follow when using your site.
Google AdSense and AdWords
You can also make use of advertising over the internet to attract new customers from within your target market. This works just like ‘traditional’ advertising: you choose a message, image, or video and pay to put it on someone else’s website. For example, you can pay Stuff to advertise on their website.
A more popular way of advertising online is using ‘contextual advertising’. This is where advertisements are automatically placed for you — the webpages where they are shown depend on who and where the person using the website is. This means that when one person visits a website, they will see different advertisements to those shown to another visitor to the same website.
There are various kinds of contextual advertising. Some, such as Google’s AdSense, place advertisements automatically on other websites. AdSense uses factors such as the content of the website, the user’s location, and the user’s demographics, interests, and browsing history to determine which advertisements to show each visitor to a website.
AdSense is priced through an auction system. That is, advertisers can bid different amounts. Where the ad is shown depends on the quality of your advertisement, the amount you bid compared to others, and the websites that Google thinks are most relevant to your ad.
Another type of contextual advertising is Google’s AdWords. This creates ads that appear on relevant Google search results pages and Google partner sites. Whether or not your advertisement is considered ‘relevant’ to a Google search depends on a set of keywords you associate with your advertisement. When users search using these terms or visit websites relevant to these terms, ads from businesses that have specified these keywords are shown.
You can also choose a geographical location in which website visitors must be for your ads to appear. So, for example, a bike shop might select keywords like ‘bikes’, ‘bike repair’, and ‘fixie’, and only want its advertisements to appear to people in the local area it serves.
Google Analytics can also be used to monitor the performance of your contextual advertising. For example, you can see how many people have seen an ad, how many have clicked it, how many times it was displayed, and so on. You can use this information to make your future advertisements more effective.
Google My Business
You may have noticed that when you search for a business on Google, you often get an information box in the top right-hand corner of the search results which features a business and its contact details. This is a ‘Google My Business’ listing. Google automatically creates a listing for any business it finds, and fills in information such as location and opening hours. If Google has not already found your business and created a listing, you can do this yourself.
Ensure that you claim your business listing on Google and check the information on it (such as your opening hours and contact details) is correct and up to date.
Getting reviews of your business is a good thing! Many customers look for reviews when deciding which business to use, and many trust online reviews just as much as personal recommendations.
Your presence on social media platforms gives customers one way to review your business, and other potential customers a place where they can look to see what people are saying about your business. There are also Google reviews which can be given through Google My Business listings – when your Google My Business listing shows alongside someone’s search results, the user can look through any reviews given. You may also have a place on your website where customers can submit and read reviews.
Finally, there are external review sites which customers can use to rate and review your business. A few examples of review sites are:
- Yelp! where users can submit reviews of local businesses using a one to five-star rating system. Businesses can set up a free account to post contact information, hours, photos, and other basic information. Users can place reviews, react to other reviews, plan events, and talk to each other, and businesses can respond to reviewers.
- TripAdvisor, where people can review travel-related businesses such as hotels, airlines, tourist attractions, and restaurants. A listing on TripAdvisor lets you write a business description, add photos, respond to reviews, and measure yourself against competitors. You may even allow people to book with you through TripAdvisor.
- Finda, a business directory, also lets users review businesses. You can get a free listing or a paid listing on Finda and can advertise and offer coupons on the site. The front page of the site shows ‘Latest Reviews’ and ‘Most Loved Businesses’.
- NoCowboys is also a business directory, but is for service businesses in New Zealand. Customers can rate businesses they have used in terms of reliability, value for money, quality of work, and communication. If your business registers with NoCowboys you get a personalised profile page. This can be tailored to suit your business and can link to any social media you use.
The key to making the most of all these review sites (and social media) is to ask people to give you reviews. If a customer is particular happy with your product, and tells you, ask them to write a review. Perhaps encourage customers to review your business through an online competition or in-store incentive. After a customer completes a purchase, you could send a follow-up email (provided they have consented to receive emails) which includes a link to a review site. If you send out a regular email newsletter, think about including suggestions that customers write a review.
Public relations (or ‘PR’) is where you create and maintain a good image of your business. It’s about managing information about your business, so it maintains a good reputation. There are many ways to do this and most are quite cheap.
Your communications with the public affect your business’s image. Social media, your website, and emails you send out to customers all count as part of your PR, as do things like public speeches and interviews on the radio, television, or in print media.
Getting involved in your local community is also good for PR. This can be as simple as attending and participating in community meetings. Or it could include lobbying for changes that benefit your local community.
You could even sponsor a local event, organisation, or cause. This does not need to involve giving away money: you might donate products or services as prizes for a fundraising event or for use by the person or group being sponsored. In return, they will promote your business. Hosting your own events is also a possibility. These could range from launching a new product to hosting a community ‘fun run’ event.
Another common PR method is giving charitable donations. This could be in the form of money, but it could also be providing products or services, or simply time, to charities that need them. Taking this further, you could become part of a non-profit partnership. This can make your charitable donations more prominent and greatly improve the public perception of your business.
PR also includes things like creating an awareness campaign that promotes your business or industry. You could talk to your local small business association and develop ideas to raise public awareness of local retail stores and services. Work with other businesses to host events or awareness campaigns. En
tering industry competitions is another way to build PR. Many industries have an annual award ceremony or competition. For example, the pie industry has pie awards for small and large bakeries. Many local business associations hold ‘Best Shop of the Year’. There are also several regional and national business awards, such as the David Awards for small and home-based businesses. Competing in and (especially) winning such a competition draw attention to your business.
Another form of PR is publicity. This is when people in the media (in a newspaper, on the radio or TV, or online) talk about a business. You may get publicity when, for example, you do a radio interview, sponsor an event, win an award, or make a charitable donation, and so on.
You do not have to rely on the media finding out about your business – you can go directly to the media. For example, you can write ‘press releases’ and provide these to the media. Your local newspaper will usually publish articles about events and activities of interest and benefit to your local community, so if your press release meets their criteria it may be printed free of charge. You could also invite them to write an article about your business.
Targeted Promotions and Remarketing
Rather than general advertising, a targeted promotion is aimed at a very specific group of people. This group is often those people who are close to becoming your customers, but just need a little ‘push’.
In a sense, many small businesses already do targeted promotions. For example, most tradespeople will restrict their promotional activities to their local area. However, just focusing on location will not be an effective strategy for many businesses. If you know your target market, you will want to reach out to those people based on other characteristics. The internet offers small businesses many low-cost opportunities to do this. For example, you can use email marketing, social media marketing, or even contextual advertising to target very specific groups of people.
‘Remarketing’ is getting back in touch with people who have already had some kind of interaction with your business, even though they have not yet bought anything. For example, someone might have come into your place of business, left a phone message, or simply visited your website or one of your social media accounts. Remarketing is just getting back in touch with them, often with a promotional message designed to tempt them to become customers.
The internet has made remarketing much more sophisticated. For example, you can include a Facebook ‘bug’ on your website that tracks anyone who is logged into Facebook when they visit your website. These people can then be automatically targeted for advertising messages through Facebook. The same thing can be done with other online advertising services. You might have noticed that when you visit a business’s website or look at one of its products online, you start seeing more advertisements from them – this is not an accident; it is just them remarketing to you.
Encourage Word of Mouth
Referrals from friends and whānau are one of the most effective forms of marketing. People trust their friends and loved ones far more than they will ever trust paid advertising. If you can get satisfied customers talking to their friends and whānau about your business, it will be an easy way to increase sales. The best way to do this is, of course, to provide an excellent customer experience. That way when anyone is asking one of your customers who they recommend, it is sure to be you.
Having said that, word of mouth is a passive method of marketing – you will have to wait for someone’s friend or relative to ask them before you will get the referral. On the other hand, if you have memorable promotions, this will encourage your customers to start talking to others. Sometimes you can do a bit of both. For example, how many times have you seen businesses host face painting for children? Inevitably, people who see the face painting ask where it was done, which means free promotion for that business.
There are also various ways you can encourage word of mouth. For instance, you can encourage people to share your social media posts, give customers free samples of products which they can share with others, or suggest that customers bring a friend to an event or appointment.
Find New Distribution Channels
Sometimes you will be able to reach new customers just by selling in a new place. You will be expanding the range of people that your business markets to, and thus expanding your potential customer base.
Selling via Social Media
You can acquire new customers by selling on social media. As well as for promoting sales, social media can be used to sell your product or service directly. While you can link from social media to your business website, you can also sell directly on sites like Facebook and Instagram.
Whatever option you choose for selling via social media, make sure the process of buying is easy. Customers should not need to work hard to purchase what they want.
- Facebook’s Marketplace. This allows users to buy and sell in their local area. You can use it to sell your product in your community. Using the Marketplace is easy – when logged into Facebook, you simply click on the Marketplace icon and follow the instructions to sell something. When someone sees your post and decides they want to buy from you, they can click to message you. You then work out a sale together from there. Buyers and sellers interact directly with each other.
- Shopify’s Facebook Sales Channel. Shopify is an e-commerce platform. You can use Shopify to create a shop section on your Facebook page to allow you to sell through Facebook. You can do this even if you do not have an online store with Shopify.
- Instagram’s ‘Shop Now’ Button. On Instagram you can post pictures of your products to get people interested. With this button, people can buy the item, not just like your post. When a user clicks this button, they are taken to your website to buy the product.
- Yotpo. This is another way to sell through Instagram. Yotpo links your Instagram pictures to an online store which has the look and feel of Instagram (a ‘shoppable Instagram’).
- Buyable Pins. These allow you to sell through Pinterest. When users click on pins they are taken to your website to purchase your products. Right now, Buyable Pins are only available to businesses which have a website created through Shopify, and which ship to US addresses and sell in US dollars using select payment gateways. However, this could soon change.
Auction and Sales Sites
You can sell through online selling channels – ‘online marketplaces’ – such as TradeMe, eBay, or Amazon.
- Trade Me – the most popular auction site in New Zealand
All three offer channels for small businesses to sell their products in New Zealand and overseas, although sales through Trade Me are limited to users in New Zealand and Australia. Selling through an online marketplace is something you may want to do even if you have your own online store. It is a cheap and easy way of getting new customers. Once someone has purchased from you through an online marketplace, they will know your business exists and may choose to buy direct from your website in the future.
Factor to Consider
If you decide to sell through an auction site, be aware that the Fair Trading Act 1986 requires all businesses that sell online to identify themselves as being ‘in trade’. This is so customers know that you are a business, not an individual, and laws such as the Consumer Guarantees Act 1993 apply to anything they buy from you.
The typical way of using an auction site is to simply list your good or service for sale and give buyers the option of bidding for the item or paying a ’buy now’ price (or both). Once an item is sold, the buyer makes the payment and you arrange shipping. However, there are other options. Both Trade Me and eBay offer you the ability to open ‘Stores’ on their sites: for a monthly subscription fee, you can display all of the items you have for sale and tell buyers more about your business through a customised page. You also get a unique Trade Me or eBay web address to promote.
Although selling through an auction site seems a low-cost option, be sure to build in the cost of fees to your product price. This includes both listing fees and success fees (fees charged when an item sells). If you need to list an item several times before it sells, ensure you account for this.
Other points to be aware of are:
- You may not have access to some overseas markets.
- You do not own the site, so cannot make changes that you might want to make – you must agree to their terms and conditions and ‘make do’ with the functions of the site.
- You cannot link to your website or provide contact details in your listings – this stops you from getting customers to contact your business and buy your products outside the auction site.
- You have no control over the look of the site, which makes it hard to keep a consistent brand identity across all points of contact with your business. In fact, using an auction site may not be suitable for some brand images.
- You may find it difficult to sell products that people are not directly searching for.
You may be able to sell through a distributor. Distributors are mainly wholesale businesses that specialise in selling to retailers. They don’t sell directly to consumers. Getting a distributor to on-sell your products to retailers can provide your business access to much greater numbers of final customers and, hence, potentially much higher sales.
Since distributors sell your products for you, they can save you money on staff for marketing. Plus, having a distributor may mean you don’t need to maintain a retail location – which costs rent and other overheads.
The main disadvantage of using a distributor is you will need to sell your products at a price which is low enough for the distributor to make a profit. Given that any retailers they sell to will also need to make a profit, the price you charge distributors may need to be less than a quarter of the retail price charged to the end customer.
Selling on Consignment
When selling on consignment you basically offer your products to a retailer for them to try and sell for you. The retailer displays the items and includes them in their line of products. If the items sell, the retail store owner pays you the sales price less an agreed percentage and any other costs. Some retailers find it attractive to accept goods on consignment as it allows them to get inventory without having to pay, others may prefer to purchase outright so they can make more profit on each sale.
Some of the benefits of consignment selling are that it:
- Saves on overheads and rent
- Gets the product in front of customers
- Gives retailers an opportunity to see how well your product sells before committing to purchase them on a wholesale basis
- Allows you to ‘test the waters’ for new products or new sales channels
- Allows you to reach different locations and markets
- Enables you to keep a higher proportion of the final sale price than if you sold on a wholesale basis
The main disadvantages are that it can be time-consuming to manage and problems can arise with stock control. You will need to have systems in place to be able to monitor product sales and a clear agreement with the retailer.
Regardless of whether you already have a physical store, you can also make use of ‘pop-up stores’. These are temporary physical stores — they often last only a day or two. It may be in a rented retail space, a small kiosk, a cart, a van or truck, or even just a small stand, and could be in an empty retail store, on the side of the road, in a mall, or at a public event.
A few examples of pop-up shops include:
- A jewellery maker hosting a pop-up at the premises of a local clothing retailer to help her products reach new potential customers.
- An online gift store running a pop-up store in a kiosk in a shopping mall over the Christmas holidays to increase sales.
- A clothing retailer offering a new line of products opens up a pop-up shop in an empty retail store to introduce the line.
- A donut store with a mobile (van) pop-up which visits different locations.
- A specialist juice producer teams up with a local chef to host a pop-up diner featuring their drinks.
The benefits of doing a pop-up (especially for an online business) are:
- Being able to test a new revenue stream. It is a lot cheaper to trial using a pop-up store than to set up a permanent retail store.
- It gives customers the chance to engage with your product offline. Being able to physically touch a product before buying is still important to many customers.
- It creates a ‘get it while it lasts’ sense of urgency in customers. This is especially true for new or limited products.
- It enables you to take the opportunities offered by special occasions such as a season, holiday, or even a sale. For instance, a pop-up shop could be set up to sell costumes for Halloween or flowers for Valentine’s Day.
- It provides the opportunity to demonstrate the benefits of a new product to customers. This could be live demonstrations to encourage early adoption or pre-orders before starting bulk production.
- It allows you to test several locations to work out which is best for your customer base before committing to a retail store.
- It creates brand awareness through engaging with customers. Giving customers a good experience can help you develop new customers and encourage customer loyalty.
To make the most of a pop-up, make sure your marketing gives it a boost. Build buzz beforehand through your social media (you could for example, create an ‘event’), email marketing, and other forms of promotion. Also remember to put some time and effort into ‘day-of’ marketing—many shoppers will decide to visit your pop-up on the day. So, for example, handing out flyers on the day of the pop-up can attract customers who are walking through the area and who would otherwise not have visited your store.
Think about marketing even after a pop-up store closes. Share pictures and stories on social media. You want people who visited your pop-up to remember how much they enjoyed it. You also want people who didn’t visit to think about coming to your next one.
Markets, Expos, and Events
Attending markets, expos, or special events is often a good way of finding new customers to sell to. People who go to markets often do so with the intention to buy, however, sales are more likely for low-priced items.
Markets in locations away from your primary location can be a useful way of testing your product or service in new areas. They do not require a huge investment of time or money and can give you useful information that you might then use to expand permanently into those locations. However, to use a market as a gauge of demand in the area, make sure that the market is one which will be attended by people who are likely to be in your target market.
Expos are usually industry-related (for example, farming or travel) or related to an area of interest (such as parenting or lifestyle). People who attend expos are often also looking to make a purchase, and may be prepared to buy larger value items than they would at a market. One of the advantages of selling at an expo is that the people who attend like to see new products and services, and may expect to be ‘pitched’ to.
Unlike markets and expos, special events need not be focused on buying or selling themselves, but potential customers will still attend and will often be looking or willing to buy. For example, some towns hold mid-winter festivals where the council and local businesses put on all sorts of winter activities. Similarly, large sports events can be an opportunity for businesses. Many people attend these events, either as spectators or competitors, and enjoy visiting stalls to see what businesses have on offer.
Find New Markets
Another option for increasing sales is to find a new target market. In some rare cases a business might want to switch target market entirely, but it is more common for a business to find a new target market that complements its existing target market.
Changing your Target Market
In some cases a business might want to start selling to a whole new group of customers, because the existing target market is not profitable enough.
For example, a business might decide to move upmarket by selling its product or service at an increased price (and perhaps in a higher-quality version) to wealthier consumers. Just raising the price on its own will be unlikely to succeed: you will often need to change other parts of your marketing mix to appeal to wealthier customers. For example, you might have to start selling in more upmarket areas or use different promotional strategies and channels. If you already have a well-established brand image, you may need to use a different brand to appeal to the new target market.
Focusing on wealthier customers does not necessarily mean more profit – especially if there are not many members of this target market. A business may find that by lowering prices and / or providing a more basic version of a product or service, demand may increase enough to offset the lower prices and increase profits.
Finding a new target market may be necessary if a business has been selling a product that is now starting to fall out of fashion. People who were prepared to pay a premium price for something fashionable are no longer prepared to pay that price – the business will then have to look at moving to a target market who is less concerned with having the ‘latest’ items. This may include people who have always wanted to buy the product or service but could previously not afford to.
Finding an Additional Target Market
It is quite common for businesses to start selling into additional target markets as they grow and as society changes over time. Good examples of this are the skincare, cosmetics, and jewellery industries. Historically, these industries catered mostly to only one gender: women. These days, however, men are becoming more concerned about their appearance and it is no longer rare for men to use skincare products, cosmetics, or wear an expensive ear ring or piercings.
Businesses that had been producing these products for women had an early advantage in this new market because they already had most of the experience and capacity to produce the required products. Of course, the industry could not utilise the same marketing mix it used to sell products to women: it had to be modified to suit male consumers. For example, new products with new kinds of branding had to be developed, and the promotional channels and campaigns that worked well for female customers were mostly unsuitable for selling to men.
Expanding locations is a typical strategy for small businesses which are regionally-focussed to reach a new target market. For example, a tyre business usually serves a specific location because it is not worth people coming from far away just to get new tyres. Opening another branch in a separate location is a way to target a new group of customers. Even so, you may have to change your marketing mix depending on the location. For example, the product mix of a tyre business in the far north will likely not include a large selection of snow tyres, whereas one in the far south of the country may.
When trying to find new markets to sell to, consider:
- Emerging trends which might affect who purchases your product or service.
- Where in the product lifecycle your existing products or services are.
- The ways in which an existing product might be repurposed for new customers.
- How you might rebrand existing products to appeal to new sets of people.
- Any opportunities you may have to modify existing products for new groups of customers.
- Whether your business would have a competitive advantage in a new location.
- If your branding might be seen as new, interesting, and fresh by people who have not yet heard of your business.
Your business may also consider finding new markets through exporting. There are many ways in which you can do this, with the less risky options being simply selling via your current website or having a website specifically targeted at an overseas market. Higher-risk options include selling to a distributor in the overseas market or actually setting up a physical store overseas.
Another option is to use the Fulfilment By Amazon (FBA) service, which makes it easy for small businesses to export, and more importantly to experiment with exporting at a low cost. To use FBA, businesses send their products to one of Amazon’s warehouses (called ‘fulfilment centres’) and list their products for sale on Amazon. When items sell, Amazon handles all shipping and returns. You pay Amazon for inventory storage and the orders Amazon fulfils, and the cost of shipping is included in your fees.
You can also use Amazon fulfilment centres to deliver products sold through other channels (such as eBay or your own business website).
When exporting, even via Fulfilment By Amazon, make sure that your products comply with local laws.
Improve Your Sales Process
An effective sales process has five basic steps (see below). To increase your sales, you can work on improving each step in this process.
The Sales Process
A summary of what the steps involve is as follows:
- Make a Personal Connection with the Customer. Don’t just launch straight into a sales pitch: start a conversation with the customer. Make them feel valued and establish a bond with them. This can help you make a sale later on.
- Learn about the Customer. Find out what your customer needs. They will not buy your product or service if they do not want it or think they do not need it. By finding out what they need, you can decide which product or service is the most suited to them.
- Provide the Right Solution for the Customer’s Need. Once you know the customer’s needs, you can offer them the solution. This solution may involve a different product or service to that which the customer had enquired about.
- Make the Sale and Deliver the Product. This is when you ‘close the deal’. It may involve responding to objections or questions and, if so, your responses need to be honest. Always deliver what you say you will deliver. This is good for your reputation and customer loyalty.
- Maintain Rapport and Turn them into Advocates. Try to maintain a good relationship with your customers. Loyal customers benefit you in the long term. Show them you care about their wellbeing. You can do this by, for example, sending them a ‘thank you’ email after a major purchase or a voucher on their birthday.
Some suggestions for improving your sales process include:
- Develop the sales process beyond payment – make sure the customer’s after-sale experience is just as good as their pre-sale experience.
- Encourage customers to follow you on social media – this helps you maintain a rapport with the customer and to get their interest when you post about new offers.
- Upselling – offer customers additional items to purchase at the point of sale. It is important not to be pushy, and it is a good idea to make the additional offers relevant to what they are already buying. For example, if a customer is buying a new television, perhaps you could upsell a surge protector as a way of protecting their purchase.
- Staff incentives – the quality of your customer experience depends in a large part on how well your staff interact with them. Happy, motivated staff will do a better job. Therefore, it can be a good idea to motivate your staff so that they will always be doing their best. Incentives are one way of doing this.
- Loyalty schemes – offering customers a special deal for continued custom is a good way to get them to come back to your business.
- Getting to know customers better – customers appreciate it when you take an interest in them and remember them: it makes them feel that they matter. Take the time to establish good relationships with your customers and keep in mind that they will likely remember their interactions with your business better than you will.
- Invest in a customer relationship management (CRM) system – this can be used to guide customers through the sales process and ensure all leads are followed up in a consistent manner. It also holds customer information, making it easier for you to ‘remember’ what customers like and promote to them more effectively in the future.