Female entrepreneurship is at an all-time high and will continue to thrive in the foreseeable future. The number of female-owned companies in the United States grew 45 percent from 2007 to 2016, while average revenue increased 35 percent since 2007.
But despite these gains, women-owned firms experience a “scale-up gap” when it comes to expansion, with only 3 percent of female-owned firms passing the $500,000 annual revenue threshold, compared to 9 percent of male-owned firms, according to the Kauffman Foundation. Only 27.8 percent of firms that break $1 million annually are owned by women.
Scaling up is challenging for all companies, and doing it effectively requires using smart scaling tactics. Here are three proven strategies you can use to boost your profit margins and grow your business.
1. Hone your brand
Marketing guru Jay Abraham teaches that one of the most effective ways to leverage your marketing is to improve your branding by adjusting your unique selling proposition (USP). Your USP tells your target market what your brand uniquely offers that sets you apart from your competition. Refocusing it can increase your brand’s appeal to your target niche and open up new niches.
You can improve your USP by changing your price, offering more quality, promising better service or focusing on a different target niche. You can also develop multiple USPs for different niches.
One successful company that has set itself apart with a unique branding message is Amway. Amway uses a direct selling multi-level marketing approach to franchising, empowering a small business owner to earn a percentage of sales from other sales representatives they recruit into their network to sell items such as health and beauty products.
Some people have confused this with pyramid schemes where no actual products are sold and there is no potential to advance financially in the network hierarchy.
To distinguish itself from pyramid schemes, Amway has worked to educate consumers that its business model is built on a partnership approach to entrepreneurship, where independent business owners cooperate to sell quality products for mutual benefit. Amway also allows its representatives to customize their USPs to focus on specific niches for a competitive advantage unique to their personal target market.
2. Multiply your marketing by retargeting your current customers
Another high-powered strategy Abraham teaches is multiplying your marketing leverage by retargeting your current customers. It’s much easier and less expensive to sell a second product to a customer who has already bought from you than it is to acquire a new customer.
A customer who’s already bought from you already trusts you and if you’ve delivered a quality product with good service, they’re more likely to buy from you again. A satisfied customer is also your best source of referrals to new customers.
You can retarget to current customers by offering them other products that complement ones they’ve already purchased from you. You can also ask them to refer you to others who might benefit from your products and services.
DeGreef Real Estate is one small business that successfully put this strategy into effect. The company faced the problem that most home owners only buy three homes during their lifetime, limiting the potential for repeat sales.
As a solution, DeGreef began providing its sales team with personalized magnets to give out to new clients quarterly and past clients annually, along with a request to like the company’s page on Facebook to stay updated on home values. The result was a spike in Facebook followers, shares and referrals.
3. Personalize your sales
An effective sales strategy made possible by new technology is personalization. By using technology tools such as customer relationship management software and big data analytics, you can develop customized marketing and sales tactics geared toward the personalities and preferences of individual customers.
One application of this strategy popularized by Amazon’s website is making product recommendations to customers based on past purchases. JD Sports borrowed this strategy by using the Barilliance product recommendations engine to suggest cross-sell and upsell purchases to its website visitors. The result was more product page views, more time spent per page and a 10 percent increase in conversions.