The Main Levers of Business Growth (and How to Influence Them)

I've read about many methodologies and frameworks around the elements and levers business growth. RACE by Dave Chaffey (one of my old-school, timeless favourites) which is centred around growth from digital marketing. The Ansoff Matrix - which looks at growth through market penetration, market development, product development and diversification. But then, one simple yet effective one popped up on social media a few years ago, and it was so simple that it just stuck. I spent hours mapping it out, consuming it, working out how I could apply it to different clients and industries.

Guess how many elements there are? Three. Doesn't sound like much, right? Let me take you through them.

1) Number of customers

This one is obvious. If you increase your number of customers, your business grows. If only it were that easy! The question you're probably asking is what's the most effective way to increase your number of customers. My answer and recommendation? Digital marketing.

We live in a heavily social and phone-dominated world. And as annoying as it may be at times, being present on the right channels and your digital approach is no longer a nice-to-have. All it takes is one post or piece of content to "blow up" (perform really well or go viral) and you have potentially thousands, or even millions, of eyes on you.

But which digital marketing, you ask? I'd say a blend of well-executed organic social and paid advertising. Organic social helps you build the brand foundation, and paid ads help you amplify it, with the ability to target exactly who you want and need, when, and with the right messaging.

2) AOV - average order value / average transaction value

So you have a collection of customers, and if you've been in business a while, there's likely a trend of averages - how much people are spending. This is your average order / average transaction value.

But what if you can influence this by minor amounts? Even influencing it on a small scale can have a huge impact on overall revenue, over time.

So, how do you increase average order / average transaction value? My go-to move here is to upsell. Add a final nudge to someone before they check out or complete a purchase, and make sure it's affordable, relevant and personalised.

3) Frequency

Frequency is the last lever. In simple terms frequency is how often a customer returns to you in a set time period. This one can be a little trickier to find. Typically you'll need anonymised card data, loyalty programmes, or customer data platforms and CRMs.

But if you can find it, small changes in frequency can also amount to huge effects on revenue.

How do you influence this one? My recommendation here is offers. And I don't mean large, blanket discounts across your entire customer database and everyone you can possibly contact. I mean small, personalised offers that do just enough to move the needle on frequency slightly. For example, a generous offer to your lapsed customers, to encourage them to return. Or a lighter-touch offer that entices someone to come back again if they visited recently.

But how do these all tie together, and what can the effects be? Below I'm giving an industry example to help tell the story. However, before I start, a quick honest note: these numbers are simplified to make the maths clear. Real businesses have tax, staffing, stock and a dozen other variables at play, so growth like this takes time, care and testing - but the principle holds.

Restaurant Industry

100 customers, visiting once every two months, with an AOV of £20 each = £20 x 100 = £2,000 per visit cycle

Over a year, that's 6 cycles = £2,000 x 6 = £12,000 in revenue (yearly)

Now let's double your customers with some digital marketing = 200 customers = £4,000 per cycle, £24,000 yearly

What if you now increase the AOV by £2 per customer, by adding a small side to your menu, and sell it to all your new customers? £22 x 200 = £4,400 per cycle x 6 = £26,400 yearly

And now, what if you also double the frequency, on top of that slightly increased AOV from the upsell? £22 x 200 = £4,400, but now visiting monthly instead of every two months, so 12 cycles = £52,800 yearly

Can you see the jump from £12,000 to £52,800 there? That's a 4.4x increase in revenue. From three carefully planned, small, deliberate nudges.

Of course, these are all small changes you'd need to implement slowly, carefully, and with a lot of testing. You'd likely need to invest some time and money to get there.

But this is why I love the three levers of growth so much, and why I still use it with clients to this day. You don't need a huge budget or a growth hacker on retainer. You need to know your numbers, and nudge them - carefully, one at a time.