If I told you that 10 + 10 + 10 = 33.1, you’d tell me I was wrong. When it comes to growing your agency exponentially, I’m 100% correct.
You may think that there are hundreds of ways to grow your agency and you’re correct if you are thinking about marketing tactics. As far as strategies go, there are only 3 basic, yet powerful strategies you focus on to grow your bottom line. Those basic strategies are:
- Increasing the number of customers
- Increasing the average amount of revenue from each customer
- Increasing the average length of time you keep a customer.
Yes, I know this may sound simple but let’s take a look at how the math proves this powerful theory
Let’s say you currently have 1000 customers who each generate $200 in revenue each year and your average customer stays with you for 10 years. Over those 10 years, you should receive $2,000,000 in revenue (1000 customers * $200 average revenue * 10 years = $2,000,000).
Now, let’s pretend that you focus on growing your customer base by 10% and now you have 1100 customers. Let’s pretend you upsell and cross-sell customers to increase average revenue per customer by 10% so now average revenue per customer is $220. Then you do what it takes to increase the average amount of time a customer stays with you by 10% so now customers stay with you for 11 years. If you would think that your revenue would go up by 10%, you are WRONG! Your revenue actually goes up by 33.1%. Those 1100 customers would now generate $2,662,000 (1100 customers * $220 average revenue * 11 years = $2,662,000). If you subtract $2,000,000 from $2,662,000 you get $662,000. Divide that figure by $2,000,000 and you’ll discover that your agency revenue grew by 33.1%.
As I mentioned, I know this sounds simple nut my challenge to you is what can you do to increase these 3 areas?