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You are here: Home / Marketing / Three Big Levers to Grow Your Business and What We Can Learn from Starbucks, McDonalds, and AMC

Three Big Levers to Grow Your Business and What We Can Learn from Starbucks, McDonalds, and AMC

May 19, 2010 By Jeremy Shapiro

There are a billion different ways to grow your business, but there is a particular set of three “levers” that you can use to make game-changing increases in cashflow.

Your businesses cashflow is basically defined by:

Cashflow = Number of Customers x Average Ticket Sale x Frequency of Purchase

This means that if you can increase any of these three variables, you can grow your business.

Let’s look at each of these variables in detail and go through a few examples.


Growing your customer base is often the most obvious variable you can change. In fact, that’s what all of your sales and marketing is meant to do. Another way you can increase your customer base is to leverage your exiting customer base by implementing a Refer-a-Friend program.

Increasing how much your customer buy from you each time is best exemplified by McDonald’s infamous  six-word question of “Would you like fries with that?” That simple question has increased sales tremendously. Take McDonald’s later upsell of asking if you’d like to “supersize” your fries / drink / meal. What started as a transaction under $1 for your hamburger, suddenly jumped to $5+ when you add on the large fries and drink. All from asking a simple question…

In the movie theater industry, there’s not much (if any) profit in the actual ticket sales. The major profit center is in the concessions. When you go to pick up your popcorn at an AMC, you’ll see a notice by the register that says if the employee doesn’t offer you a drink, that you get a free popcorn. Why? They want to make sure that every customer is asked if they’d like a drink, instantly adding $4-7 to the transaction.

Lastly you can focus on increasing how often your customers come back to you. Starbucks has done a great job of this in a few interesting ways. In the summer time, they’ve run a promotion that if you bring back your coffee receipt from the morning that you can get $2 off a cold drink in the afternoon. Now your morning receipt is burning a hole in your pocket encouraging you to come back in the afternoon and make a second purchase – in the same day!

The Starbucks Gold Card Program that rolled out a year and a half ago originally gave card holders who were to pay $25/year 10% off all of their purchases. They got rid of that program a few months ago in favor of giving you a coupon for a free drink for every 12 drinks you purchase with the Gold Card, but making the card free. This instantly expands the card holder base AND keeps customers coming back to rack up the points towards a free drink. (Think loyalty programs here. What big business can you think of that doesn’t have a loyalty program? Do you have a loyalty program in your business? Could you?)

The most recent Starbucks frequency campaign was their Frappuccino However-You-want-It program that started last week and their introduction of Frappuccino Happy Hour. Suddenly – and for a limited time – you could get half off any made to order Frappuccino at Starbucks. This got customers into the store daily (yep, I did it) and started to form a habit. Stores that were used to having a regular volume of traffic suddenly had lines out the door with repeat customers coming back for more.

Adjusting any one of these three levers in your business – number of customers, amount of transaction, frequency of transactions – will make a dramatic impact on your business.

Your exercise is to determine what you can do to:

  1. Increase your customer base
  2. Increase how often your customers buy from you
  3. Increase how much your customers buy from you each time

Filed Under: Marketing, Sales

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