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Health & Fitness

Retailing is a Challenge

You own a small retail business and your customers love you.  You provide a good value and offer personal attention to every customer.  And yet, it is a constant struggle to pay the bills and have a few dollars left for yourself.  You need more customers.  Eventually, if you can keep the doors open, Word of Mouth Advertising will help you grow your business.  But, it can take a long time.  You need to be more proactive about growing your business.  So, how do you start being more proactive?

You begin by developing a promotion budget.  A simple way to do this is to analyze your unused capacity.  Ask yourself  “How many more customers could I accommodate?”  Your next question could be “What is the average amount each customer might spend?”  Multiple the number of additional customers you can handle by the average expenditure of a typical customer and you will have a rough idea of how much additional business you should be looking for.  Your final question for yourself is “How much am I willing to invest to pursue this additional revenue?”  Here is an example of how this could work:

      150            No. of add’l customers I can accommodate each month

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X  $25.00        Average expenditure of each customer

     $3,750        Potential add’l revenue per month

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Using this example, you might set a monthly promotional budget at $375 (10% of potential add’l revenue).  There are two things to remember.  First, if you acquire and retain a new customer, the revenue stream will be ongoing for as long as you keep the customer.  Second, have patience.  Your promotions are unlikely to have a lot of immediate impact.  Be prepared to persist for up to a year before you notice a significant increase in your revenues.

So, how do you invest your promotion budget.  The obvious answer is “Saturate your local area with low cost sales messages.”  If you offer a product or service which consumers purchase on a regular basis, such a beauty shop or restaurant, a discounted direct mail option such as Every Door Direct Mail could be a good choice for you.  On the other hand, if your products or services are only periodically needed, such as a plumber, low cost weekly ads in church bulletins can build your image, plus put you before the customer when they have a need.  Good luck!

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