A powerful formula that directly links your marketing to your growth and profitability

The now famous ‘3 ways to grow your business’ formula was developed over 30 years ago by Chris Newton, the founder of Results Corporation. However, it is still as relevant today (if not even more so with so much more competition) as it was when it was first developed.  

This formula is so powerful (yet deceptively simple) that it should be central to how you understand, manage and grow your business. 

Much copied and even claimed by others (they say imitation is the best form of flattery), this simple yet powerful business growth formula has withstood the test of time and is an excellent tool for quickly identifying the best, quickest, most effective ways to grow your sales revenue. 

It gets your focus on the things that matter most. 

The 3 Ways to Grow Your Business Formula 

There are only 3 ways to grow your business and increase your sales revenue. 

1. You get more clients or customers 
2. You increase the average value of an order or invoice 
3. You increase the frequency of purchase (your clients buying more regularly) 

Today, your sales revenue is already a function of this formula… 

Clients x Value x Frequency = Sales Revenue 

For example, if you have 1,000 clients, who on average spend £1,000 per order, and on average order twice per year, your business will have a sales revenue of £2,000,000. 

Clients x Value x Frequency = Sales Revenue 

1,000 x £1,000 x 2 = £2,000,000 

The numbers for your business will be different, but whatever your numbers when you multiply your number of clients, by your average order value and your average purchase frequency – the sum will match your current annualised sales revenue. 

How do you use this to grow your business?  

The first step is to examine the effect of applying an increase in each area of the formula. In this example we will assume that you can increase your clients, value and frequency by 10%… 

Clients x Value x Frequency = Sales Revenue 

1,000 x £1,000 x 2 = £2,000,000 

10% 10% 10% 

1,100 x £1,100 x 2.2 = £2,662,000 

The net effect is not a 10% increase in your sales revenue, but because of the compounding effect, the increase in sales is 33.1%! 

For you, if you have a new fast-growing business in a new industry, 33.1% may be far too low. 

On the other hand, if you have a well-established business in a mature industry, 10% may be more than you can handle. 

Whatever your ambition level, the formula will work and you can plug in your own growth percentages. 

How can you relate this formula to the specifics of growing your business and why this formula is so powerful?

In addition to the dramatic compounding effect, the formula forces you to consider more ways to grow your business than just chasing new customers. 

While almost every business needs new customers, most instinctively always drive for new customers as the only way to increase sales revenue, ignoring the vast untapped potential of existing clients.

Existing clients are a huge opportunity. They are: 

• 5-7 times more likely to buy than the cold market 
• Easier to sell to 
• The cheapest marketing for you to sell to 

And one final point… 

You should NOT look for one way to get 10% more clients, another way to get 10% more average value and another to get 10% more purchase frequency. 

Rather, break it down to bite sized, achievable chunks. Over the next twelve months, find… 

• 5 ways to get 2% more customers 
• 4 ways to get 2% or 3% more value per order or invoice 
• 3 ways to get 3% or 4% more purchase frequency 

This means you just have to find one 2%, 3% or 4% improvement each month – easily achievable even when you are running a busy and demanding business and when you begin testing and applying the strategies outlined in the articles you can find in the Results Academy. 

To find out how Results Corporation can help you get more for your business, contact us online or call us on  01536 747 310.