“Growing a small business is hard. If it were easy, everyone would have a business,” says Tom Tarasiuk, who knows first-hand the difficulties that small businesses go through when they try to succeed at online marketing.
As president and owner of Discount Water Softeners, Tarasiuk has helped his company streamline its efforts to provide an outstanding user experience and increase sales. This undeviating focus on the customer and a willingness to take risks have enabled the business to grow.
Here are those all-important strategies he’s used:
Customer-centric product development
Tarasiuk says that a key tactic in his company’s growth has been the work by leadership to keep overhead costs low. One way that’s been done is by eliminating the usual middle men and purchasing water systems directly from the manufacturer.
But even more important has been the company’s customer-focused philosophy. The company keeps its overall inventory minimal and develops products and features that will meet the needs of its clients. It’s done this by avoiding stocking merchandise that won’t sell because people don’t need it.
As Tarasiuk told me: “Happy customers are a critical part of our growth. We base our additional or new products on what customers are requesting or what areas of the market need a void filled.”
Improving the user experience
The company’s emphasis on the customer plays out in its online marketing strategy. Case in point is when managers decided in 2013 to switch ecommerce platforms. They had been using Volusion and transitioned to Magento.
Tarasiuk says they wanted a framework that would allow them to customize various types of content (images, videos, etc.) on any of their pages. Their goal was to improve the user experience and increase conversions. They did have some concerns about the switch, he says. They feared Magento would be less user-friendly on the back end. But without taking risks, an organisation cannot grow. The result? After changing to Magento, the company’s sales nearly doubled.
And it saw its organic SEO increase noticeably with almost no additional effort. At that time, the company completely redesigned its website. Again, prioritising the customer was key. The location of optional items and upgrades on the site was improved, for instance.
This allowed customers, Tarasiuk says, to “customise their orders and learn what upgrades would benefit them the most for their needs.” The site redesign, he says, increased company sales by as much as 15 percent.
Saving time with email
Another major part of refining the user experience and cutting costs at Discount Water Softeners entailed enabling customers to resolve some of their issues through email instead of over the phone. At one point, customer service reps were taking 45 minutes to handle each call that came through. Tarasiuk says he didn’t have enough employees to handle the volume of the calls. And hiring more workers would mean increasing overhead costs.
Instead, he solved the problem by allowing people to ask their most common questions through email. Through Magento, the company added PHP forms for people to fill out and used Crazy Egg to determine the best places on the site to put the forms. The company also increased sales by driving traffic to the forms by using Google AdWords. This solution cut, by 30 minutes, the time that its reps spent on each call, Tarasiuk says. It allowed the reps to handle a higher volume of calls without adding more employees.
Google AdWords has been crucial to growth.
Google AdWords has been crucial to the growth of Discount Water Softeners. In fact, Tarasiuk goes so so far as to call AdWords “essential to efficient performance and high ROI for sales.” He says he believes every company should have someone who is skilled at leveraging AdWords to its full potential.
Tarasiuk’s business has been using Google AdWords for over 10 years, and he describes learning how to leverage this tool as “pivotal in our growth.”
When the company first started using AdWords, it wasn’t selling much and was spending only $20 per day on the tool. But then Tarasiuk found Gail Gardner, an AdWords advisor teaching pay per click strategies at the now-defunct SearchEngineForums, and the situation changed. The advisor told him that if he wanted his company to be “discovered,” he should be spending at least $70 to $80 on AdWords per day.
Following that advice, Tarsiuk says, has revolutionized his company’s online presence and has been a decision he’s never regretted. At one point, when Gardner changed her work and switched to managing PPC accounts, the company had to go without an advisor for a period and instead rely on Google support. That situation wasn’t ideal because it wasn’t clear whether Google was prioritising the company’s campaigns or focusing on its own interests, Tarasiuk says.
Google did help keep Discount Water Softeners going, but it also didn’t see a marked improvement in its campaigns at the time. The assistance of an advisor was what really made a difference in itsprofits. So Tarasiuk contacted Gardner and asked for a recommendation for a new AdWords manager.
“That original AdWords advisor was essential at not only jump-starting our internet presence, [but] she showed us how to use and manage AdWords,” he says.
While there is no formula for growing a business successfully, there are principles that can guide you along that way. Take smart risks, and make your decisions based on what will help your customers. Because of the time and money Discount Water Softeners saved on strategies it adopted, it has been able to use the extra resources it gained to launch a new line of high-efficiency water softeners.
The company has also been able to diversify its merchandise, improve its product and benefit the environment, Tarasiuk says.
“You miss 100 percent of the shots you do not take,” he says, quoting hockey star Wayne Gretzky.
This doesn’t mean you should be reckless. It means to get good advice, and then take a leap of faith based on that information. If you don’t, you’ll never know what you could be missing.
This article was originally posted here on Entrepreneur.com.
Need To Trim The Fat To Boost Profitability? Listen To Your Clients First
Jeff Bezos believed that once you win the client over by doing this, everything else will follow – not least profitability.
Finding the balance between offering the extras that set you apart from your competitors and keeping things ‘lean and mean’ to minimise wastage and maximise return on investment is a tricky balancing act.
I’ve noticed that many businesses try to attract or retain customers by offering what they think their customers want, rather than finding out what they really need, and then delivering that. That’s an expensive mistake to make – and it’s not going to achieve the business results you need.
I’ve also observed that now is the age of the new entrepreneur – the game changers who disrupt the status quo long set by big bureaucratic competitors who think that their customers will just accept an inflationary (or slightly larger) increase every year, just because they always have.
While Amazon has been around for a while now, there’s also an important lesson to be learned from its launch goal, which was to bring the price to the client. Jeff Bezos believed that once you win the client over by doing this, everything else will follow – not least profitability.
How have I applied these lessons in my business?
Firstly, we design our hotels backwards – we focus on the needs of our clients, very aware that what hotel guests wanted years ago is not what they want now. That’s why we don’t offer thing like a turn-down service with chocolates on the pillow. Nobody eats the chocolates, and nobody uses the toiletries – so why should we include the costs of these unwanted extras (and the cost of the staff required to implement them) in the final bill to our clients?
We do, however, offer free WiFi internet connectivity, free parking in our buildings, free laundry services and either bed-and-breakfast options or self-catering rooms.
Simply put, we’ve cut the fat that nobody wants anyway, and added the value that our guests have said they expect.
Our clients have said that they expect the whole hotel to be a workstation, and not just the business centre in a dark, unwanted corner. So, we’ve put a workstation in every room, with always-on access to the internet. Our hotels are designed with beautiful work spaces that cater for nomadic entrepreneurs and double up as comfortable meeting spaces, again – gone are days of boardroom only meetings, our spaces are primed for work and play in one integrated space.
Our clients have pointed out that they’re already paying for their room – so why should they pay for parking?
Many of our clients stay with us for days or weeks at a time, and have said it would be helpful if we did their laundry. So, we do that for them – and we don’t charge them for it.
It’s true that many of our old-school competitors offer a broader range of products and services than we do, but we’ve built a successful business on adding the value that our clients need, removing the costs and extras that annoy them, and keeping costs (theirs as well as ours) under control by cutting out unnecessary frills.
It’s an approach that’s worked for The Capital Hotels and Apartments as a disruptor in the hotel and long-stay accommodation industry, and I’m confident that its principles would apply to any other industry that’s ripe for disruption.
If You Want Scale, Fail Fast And Learn Quickly
Mindset, focus and an understanding of scale are essential if you want to build a highly profitable, growing business.
“The secret to scaling a business is increasing revenues without incurring a corresponding increase in operating costs,” says Tom Asacker, author of The Business of Belief, Opportunity Screams, A Little Less Conversation and A Clear Eye for Branding, all groundbreaking books that redefine business and communication for the new age of abundance. “The single most important challenge is to have a deep understanding of your value creation and customer attraction and retention process, as well as how the company will ultimately make money over time through the unique realisation of that process.”
According to Howard Sackstein, founder of Saicom Voice Services, scale used to be measured by the number of people you employed or the number of branches you opened. “Today, these questions have become irrelevant,” he says.
“When Whatsapp was sold for $19 billion the business had only 55 employees servicing 450 million users who were sending 34 billion messages a day – that’s a tiny company with enormous scale. So, today scale has come to mean something very different. In the new economy, scale is about scalable technology, how do we build software and apps that can cater for a billion users? The ideas of lots of employees and lots of offices has become old fashioned.”
The problem is that scale comes with costs and that’s why money is often the enemy of entrepreneurship. “Many of the great businesses of the new economy all began in garages, a small group of people, each with real skills each trying to bootstrap an idea to see if it worked,” continues Howard.
“Often people go looking for funding; there’s a problem there too though – they scale too fast once they receive the cash and ultimately they fail because they have too much money. Entrepreneurs need to start small and if they fail they must fail fast. They need to test the market and grow incrementally to prove their idea. Once the idea has achieved a degree of adoption and has ‘crossed the chasm’ of technology adoption, only then can you start thinking of scale. And today scale means few costs, few employees, and tech that can scale to a mass market.”
Your Mindset is Everything
Your mindset while scaling is critical. “Value creation, customer attraction and your retention process are the result of every decision you make as an entrepreneur,” says Tom. “Your mindset shapes how you make these decisions.
“Every rand spent should be to add value in the eyes of the customer, or to improve the process that delivers that value, through automation, distribution, channel partners and so on.
“If businesses aren’t hyper-focused on adding value and deepening relationships with customers, someone will come along who will. If that happens, whether or not that process produces rapid growth is beside the point.”
Howard believes that follow-through is also essential. “So many people really want to build empires,” he says. “But how do you measure your success? Is it the number of employees you have, the number of companies, your disruptive influence on the market, revenue or actual profitability?
“You really need to decide this up front and that will affect your strategy. I probably have an old school mentality, but for me profit is everything. I don’t really understand the idea of focusing on scale with no business model in the hope that on an exit someone will find value. I know that’s a common idea in the tech world and you could get lucky by following it, but I think there are few people with that degree of luck – build for profit and sustainability, build as lean as possible and keep your eye on the actual ball.”
Do You Have That 1 In 100 Business That Can Scale And Land An Investor?
Only 1% of businesses are investable, mainly because that’s how many businesses can 10x their growth. There’s an art to scaling, and it starts with you.
Only one in every 100 applications typically receive funding from venture capitalists. All 100 applicants believe their businesses are scalable and worthy of funding – and yet only 1% actually close investment deals.
“Most entrepreneurs radically overestimate their prospect of success and scalability,” agrees Jason Goldberg, founder, and CEO of 10X-e and co-founder of Edge Growth.
“If you really want to scale your business, you need to know that you are absolutely obsessed with solving a problem that hasn’t been solved before – so obsessed that you wake up at night with solutions buzzing around your head; so obsessed that your mind is always on the problem you’re trying to solve. The reality is that hunger is an incredibly important success factor – hunger, the hours you’re willing to put in and your level of intensity. How far are you willing to go and how many obstacles will you overcome?”
With this in mind, Jason and Vuyo Tofile, CEO of Entbanc Group, a fintech and digital support services firm share their top 3 secrets of scale.
1. You need to shift into a ‘scale’ mindset
Start-up entrepreneurs are focused on the hustle: More work, more energy, more sales. These are all important factors in building a business, but scaling a company requires a different focus. “Scaling up is all about architecting an enterprise and strategically putting in place the building blocks that will move you from working primarily in the business to working on the business,” says Jason.
“You need to minimise the work in the business so that you can work on the business and build a great company.”
This is easier said than done though. Often the biggest stumbling block to a company’s ability to scale is the founder. “The company founder or owner’s inability to really focus on solving an initial problem for specific target market, understanding what their business really does and is offering, and finally how to truly replicate that service or offering can be major barriers to growth, and they all lie with the entrepreneur,” says Vuyo.
The lesson is clear – you can hustle and make sales without clear structures and strategies in place, but that won’t get you to scale.
“A lot of entrepreneurs love the innovative and creative mind space of start-ups as well,” adds Jason, “which is great, but scaling is all about executing all those great ideas that you innovation and creativity helped you to come up with. If you can’t do that, you’ll never be able to scale.”
“Having the ability to execute on growth is critical,” agrees Vuyo. “Execution of the vision is far more important than having a strong vision. Vision without execution is meaningless.”
2. Get the right team in place
According to Vuyo, if you want to scale your organisation, you need the right people on board – and this too is a crucial skill the founder needs to foster. “You have to be able to build an effective team around the business,” he says. “You don’t need to be able to do everything yourself – in fact, in order to scale you mustn’t – but you do need to know who you need and where you need them.”
For Jason, the lead indicator of your ability to scale is whether or not you can build a sales organisation. “Can you shift from selling to becoming the architect of an organisation that sells for you?” he asks.
Alongside this ability is shifting from hiring who you can afford to who you need. “Start-ups hire talented ‘jack of all trade’ young high potentials (who are typically overworked and underpaid). This is an essential start-up tactic. Mature firms in scale-up mode need seasoned leaders who can take each part of your business to the next level.
“Having an awesome team is your most important ingredient of success. Every senior person needs to be pretty impressive in general, spectacular in their roles, and work well as a team.”
3. Understand if your business is scalable
Not all businesses are scalable – and that’s fine. Not all entrepreneurs want to scale their businesses either. However, if you do want to scale, it’s important to know if your business falls into the scalable or un-scalable category.
“There are three basic rules of thumb,” says Jason. “First, how big is the problem you’re solving? Is this a problem that lots of people have and are willing to spend money on the solution?
“Second, what kind of problem is it? Is your solution a vitamin pill or a headache pill? How does your client feel if you don’t exist? You’re not scalable if they don’t have a painful experience without you. In other words, do they have a headache if they haven’t seen or heard from you today?
Related: Is Your Business Ready To Be Funded?
“Finally, how different is the value you bring to your client than all their other alternatives? You need to be ten times more valuable than your competitors. If you’re not, there’s too much competition, and you’re unlikely to 10x the business.”
Vuyo agrees. “Scale is all about having a service or product that is of real, tangible value to your customer. All the resources and brand equity in the world won’t help you scale if you aren’t providing real value.”
Secrets of Scale Event #3
PART 1 – BUILDING THE AEROPLANE
This segment will be the majority of our focus and will cover practical “how to steps” for scaling your business. We’ll be revealing how to design a scale ready business and walk you through common pitfalls that all entrepreneurs will encounter as they “build the aeroplane” and how to avoid them. We’ll also reverse engineer how to design a scale ready business from a 150 strong team all the way down to a 5 person team.
PART 2 – BUILT FOR WINTER
This segment is all about how to ensure that you remain profitable as you scale. We’ll unpack how to bring different revenue streams, partnerships and products/services to together to help you weather any storm.
PART 3 – SCALE BLUEPRINT
In this segment we’ll explore the systems that can help you scale, how to automate repetitive processes and outsource non-essential tasks and how to design a business that makes more money while you sleep than when you’re awake.
Listen to the podcast here:
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