How to expand your customer base in times of
trouble
Why is it so important to
cultivate new customers? At any time (but more particularly
during a period of recession, as that which we are currently
experiencing) expanding your client base is an essential
issue for all companies. First of all, during a recession,
available business tends to dry up more quickly. Of course,
the type of product or service which you offer is a key
factor: if it is a necessity, then you will see less of a
drop in demand. However, if you are in the luxury goods
market, then you can be sure that many of your regular
customers are simply going to cut you out of their budget
altogether, or keep spending to an absolute minimum.
Secondly, if your business sells services or goods which are
used infrequently (such as house purchase or wedding
dresses) then you can be sure that the vast majority of the
population is going to cross your threshhold not more than
two or three times in a lifetime. This means that you have
to have a steady flow of new customers to keep you busy.
Having established the necessity to build your business, how
should you go about this? Again, it depends on a number of
factors such as type and size of business, budget and
geographical location. Here are some suggestions:
Open new premises
This is potentially a valid strategy if it rewards you with
enhanced visibility for your customers and greater prestige
for your organisation, as well as guaranteeing valuable work
space/showroom. You should only undertake this type of
expansion if you have had a number of years of steady
growth, and the costs of the move and refurbishment won’t
outweigh the potential benefits. It also represents a good
opportunity to re-contact existing and new customers
inviting them to an inauguration of the premises.
Diversify
It is nearly always a good strategy to diversify into
different markets, which are linked in some way to your
existing business. Thus, a manufacturer say of fitted
kitchens could expand the range to include fitted wardrobes
or the furnishing of commercial premises. This
diversification can shield against seasonal or other drops
in business.
Company merger
On the face of it, a company merger offers many advantages
when two similar or complementary businesses come together.
You can immediately double or triple your capacity to
respond to clients and thus to generate greater income.
However, it has to be carefully orchestrated as there are
often many hidden problems which may come to the fore once
it is too late – employee disputes, insurance claims for
defective products/negligent services, unpaid debts and so
on. Do your homework here before taking the plunge. You
should certainly order up Company Reports/Credit Checks on
any company that you plan to merge with to ensure economic
viability and absence of adverse entries.
Global Expansion
If there is a demand for your product at home, then it
possible and likely that this exists overseas also. For many
companies globalization has become not a choice but a
necessity. This too needs to be managed with care; choosing
advisers who are familiar with the areas you wish to expand
into. It should be approached one area at a time,
consolidating the presence in that country, prior to further
expansion.
Optimization of Internet presence
This aspect cannot be stressed enough. Bill Gates announced
that at the end of 2002 there would be only two types of
businesses – those present on the internet and those with no
business at all. This is perhaps an exaggeration, but the
importance and influence of the internet cannot be
understated. Statistics also show that over 80% of visitors
to your site come via the search engines. There are
currently over 4 billion web pages and every 50 days traffic
increases by 50%
Obtain Highly relevant, Company Marketing Lists
Obtaining selective marketing lists obtained according to
your criteria is an excellent way of finding new clients in
the right geographical area, in the right field and with the
characteristics you require. It is possible to obtain lists
where any companies with adverse payments histories are
cancelled out, thereby ensuring a higher quality of new
clients.
In conclusion, you should aim to grow your business
steadily, consolidating each new expansion before moving
onto new areas. It is important to remember that
overexpansion is one of the main causes of business failure
and new expenditure should not be committed where the
existing income is insufficient to meet it.
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the field of commercial information since 1976.
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Business expansion during the economic
recession