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by | Sep 11, 2015 | The Workplace

As a small business scraping to get by amid tough competition often the best use of resources is doubling down on what you already have got.

Times are tight. Business is rocky. And you need a sales bump. When it comes to growing your business, often the best place to start is with those who know you best—your current customers.

It is damn near impossible to think of growing market share in an economic environment such as the one we are experiencing now, especially if you are a small or mid-sized business catering to a local or regional marketplace. Most businesses are just trying to stay above the water line, cutting costs wherever possible, holding off on long-range plans, and hoping to ride it out. But that would be a big mistake.

The fact is there is a competitor somewhere in your market that isn’t sitting back, rather they are innovating and testing new strategies, creating new products and services and coming after your existing customers.  That’s where the idea of the Ansoff Matrix comers from. Used in business schools for decades the Ansoff Matrix breaks down growth strategy into four options based on level of risk. The four options with the least risky listed as number one is as follows:

1.    Existing products to existing customers
2.    New products to existing customers
3.    Existing products to new markets
4.    New products to new markets

As you can see, the least risky option is to increase the amount of sales of the products and service you already offer to the people that already deal with you (ie existing customers). This seems like pretty common sense, yet if you take a second and look at your current situation you will likely see that you are leaving opportunities on the table all over the place.

In a recent Inc.com article, author John Warrilow tells a simple story that shows this in practice:

When I was sixteen, I worked in a hardware store. My boss, Greg, was an enterprising entrepreneur who understood Ansoff’s Matrix (although he certainly didn’t call it that). We cut keys for people in the store and made more than 150 percent mark up on each one. The problem was, our key cutter was hidden in a corner and nobody knew it was there. As a result, we didn’t cut many keys. One day, Greg decided to move the key cutter and position it directly behind the cash register so everyone paying for their hardware could see the machine. Customers started seeing the cutter and realized—often to their pleasant surprise—that we cut keys. Not surprisingly, we started selling a lot more keys to our loyal customers.

Warrilow goes on to suggest that you should make a simple chart with your best customers and your current products and services, to find where those opportunities for added sales occur.

Now just to be clear, I am not saying bombard your current customers with an onslaught of promotions, as that will likely alienate them. Rather, you need to be smart and target those customers with products and services that they will find most useful. This may mean you also need to beef up your customer data collection and analysis, topics we will discuss another time. But for now get that sheet of paper or spreadsheet open and start growing your business.

Robert Westfall

Robert is a writer, behavorial researcher and decision-making consultant. He is the founder of Instinct, a firm specializing in helping organizations be more human focused and planet conscious.  You can learn more about his work at www.TheHumanInstinct.com and follow him at twitter.com/WeAreInstinct

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Remember when things just seemed to work? Yeah, neither do we.

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