Friday Factory - An Entrepreneurs Insight

“Growing” vs Finding Customers

21 July 2023

In this week’s edition of Friday Factory - we’re going to take a detailed look at a 3D printing business model that is scalable, profitable and resilient.

This kind of straight to the point, years-saving information probably shouldn’t be disclosed for free in a newsletter, but...

I’m gonna be spelling this out because I see so many people doing it the hard way, so if I can save a few people from that hassle (regardless of if they’re interested in my program or not) at least that’ll be something.

So, what is this revolutionary model, you (probably) ask?

It’s the difference between those who build sustained, long term growth in their business taking it to 6 figures and beyond and those hitting a cap at a few thousand per month level.

And it’s all to do with who you sell your products to.

I’m gonna illustrate this point with a non-3D printing example and then explain how this relates to any business shortly after, followed by specific examples for products similar to what you might be creating with your business so bare with me a moment.

...it’ll all make sense a lot of sense by the end...

I have a friend who has a wedding venue. Pre-covid, this was doing well - they were getting booked up nicely. It was their first business, and after a while, they decided they wanted to expand.

So they had two options to build the business:

The first, was to scout out another location and open a second venue somewhere else.

Near identical business, but reach a new audience in a new location. Sounds simple enough, this is a very traditional route to expand.

But, there are many problems with this; the new location might not be as successful, it might be less densely populated or those people might have different tastes.

Most obviously, they’re starting from scratch all over again. They’ll need to find new ways of attracting additional customers for the new venue.

There are also other factors, like that they might be giving a single customer two options (a choice of two venues instead of one) which might lead to confusion and hesitation.

Definitely not what you want when people are about to drop an eye watering amount of money for a wedding.

Now often the highest expense in business is acquiring, or getting a new customer. Yes, more than rent, staff, raw materials, product costs etc - above all else it’s customer acquisition.

That's why many businesses offer amazing cheap deals to get peoples foot in the door, in the hopes of building up the relationship and selling them more stuff.

It's why we offer an insane amount of value in our learn to 3D Print Bundle. That'll save many frustrating hours learning to print, for about the price of a sandwich.

Next keeping a customer for longer, or increasing their value is far more profitable for a business than just finding new customers all the time.

Basically, taking better care of the customers you've got is better than just trying to jump to the next one. Same can be said for any relationship really - who'd of thought?

So IF my friend had expanded into a new venue, her revenue might be able to double, but her customer acquisition costs would definitely double. She’d need twice as many customers to make twice as much revenue.

Not a bad situation necessarily, but this isn’t a hugely scalable model unless your systems are seriously on-point (kinda like McDonalds - except can’t imagine many want a “BigMac” wedding…)

Instead, my friend expanded her business vertically. Keeping those same customers she already had, but creating off-shoot businesses that allows her to better serve those customers she’s already serving.

She did this simply by thinking about what else people need when planning a wedding.

So, she opened a bridal dress shop close to the venue, so that a large chunk of customers that booked a wedding (£7000 - £15,000) were now spending an extra £1000 - £4000 with them on average.

This move added an average of ~20% to their customer value, but without raising their cost to acquire those customers - because they were the same existing customers.

Then, they thought about what else people spend money on when planning their weddings. So they opened a rental business, for events furniture.

Then a remote florists and flower arranging service.

The beauty about all these businesses, is that not only have they on average increased her average spend per customer by over 50% on average, without increasing the cost to acquire a customer - they also work in reverse.

Meaning each of these businesses operate on their own, and act like fish nets for the very type of customers you’d want for the events business.

So when people by a dress after stumbling upon the dress store, some naturally end up booking a wedding at their venue.

This is called cross-selling in business, and it’s surprisingly easy because you already have a relationship and trust with the customer.

You can further increase the likelihood of it by giving incentives when people by multiple things from you.

This can work with all kinds of businesses. For example a mechanics that specialise in servicing. They may wish to setup a mobile tyre service (easy as they likely have the equipment and customers) and then expand into aftermarket warranties for cars, which is a high margin product.

Now for 3D printed products, you don’t need to think in terms of what’s similar to the product, like a bigger or smaller version or different colours.

Yes those can be good options, but what you’re looking to do is not replace your existing product, but to provide options so those people that purchase your core product also then purchase other products.

Like one of my clients, David.

He’s created a brilliantly simple, much needed accessory for a niche group of people that have a specific medical device.

And it’s doing well - there’s clearly a need for it.

Now he’s looking to expand his business - but instead of repeating the process in a whole new market, for a different product solving a different problem.

Which is tempting, because there’s so much opportunity out there.

He knows he could create some shiny new thing and get wildly passionate about that, too.

But he also knows he’s onto a good thing, so he’s played a much smarter move...

David knows that virtually everyone that buys this accessory from him, will have this specific medical device.

Therefore all he has to do is get super clear on what this audience, who have this medical need - what other things they have in common that would make their lives easier.

I should clarify here; he is not printing medical devices - often too much legislation around that.

But accessories that make the use and storage of such a device easier, that’s a different story.

Without giving too much away, he’s now working on releasing his second product to those same customers, which addresses another uncomfortable side effect of the aforementioned medical device.

A product that those customer’s aren’t likely to choose instead of his original product, but more often than not, they’ll buy them as-well-as.

Especially if he chooses to offer them as a bundle for a small discount for example, making the offer a no-brainer to the customer.

It’s a win-win for everyone 🎉

The customer loves the convenience AND the fact more of their needs are being met, WITHOUT having to search for a new business to deal with.

And he’ll likely continue to build this brand over the next few products he’s launched.

Each one creates a stronger line of products that compliment each other, increase his average order value per customer and building a stronger relationship with his customer base.

All of these factors are helping building resilience into his business.

Hopefully you can apply these lessons to your business as you plan for the future.

And if you don’t have your own business yet, here’s a fun exercise:

Next time you deal with a company, find out what other products or services they (or their sister companies) might offer.

You might be surprised how many successful companies approach this method of “growing” their customers.

And it works just as well for the little guys, too.

If you've enjoyed this read, you can get my Friday Factory newsletters straight to your inbox every week - click here to sign up.

Ed Tyson

Founder of The Institute of 3D Printing

Share this post on:

Ed Tyson

Having successfully scaled multiple ecommerce businesses on a variety of platforms & been featured in online 3D printing publications, he's now looking to help you increase sales of your 3D printed products and identify higher-margin product opportunities to build your wealth.