To increase revenue for your small business, you should focus on your customers, boost your marketing and sales efforts, review your pricing strategies and expand your market.
No matter your budget, there are a number of strategies that small business owners can use to increase profits and improve the bottom lines. The key to increased revenues and success is maintaining a balance between short-term and long-term goals.
What this article covers:
- How to Increase Revenue in a Business
- How to Increase Revenue Streams
- How to Increase Revenue from Existing Customers
How to Increase Revenue in a Business
To keep your business running, you need to increase revenues. Increasing revenues are a sign of good financial health of a business. The basic operational marketing and service tactics below can help small business owners cut their costs and boost their business revenues.
DETERMINE YOUR GOALS
You must start with a clear strategy that is aligned with your revenue goals. You need to identify what success looks like and develop the route to get there. Defining your revenue goals is important in each stage of your business.
For example, during the start-up period, your initial revenue goal is to achieve profitability. However, once the business survives the perilous start-up stage, the next goal is to grow your revenues to be able to fund the company’s strategic growth, exceed gross and net revenue targets and build reserves for your business.
Once you’ve outlined your goals and have identified what actually drives sales and revenue, you can focus on the activities that will help you accomplish them.
FOCUS ON REPEAT CUSTOMERS
Instead of spending resources trying to gain new customers, small business should focus on upselling or cross-selling current customers. This is significantly more effective and cost-efficient as your current customers are already acquainted with your products and services and are therefore more likely to do business with you.
A customer appreciation gesture such as special discounts and freebies will lead your past customers and clients to their next purchase. This gives them the impression that you went the extra mile for them because they are important to you.
Connecting with your existing customers can also be an excellent way to acquire new customers to boost business growth. Since people are inclined to connect with others like them, giving existing customers a strong referral incentive can be a big win for your business.
ADD COMPLIMENTARY SERVICES OR PRODUCTS
Bundling complimentary products and services can lead to an increase in sales without additional overhead costs. Bundling is usually associated with savings. Even when the savings is nominal for the customer, it’s still a much easier and cost-efficient sale for you.
HONE YOUR PRICING STRATEGY
Price is the most important factor in purchase decision making. An adjustment to the product and service prices should be in line with your market situation and the revenue goals.
A sudden increase in price will bring more revenues and boost business profits only when it doesn’t negatively impact sales. You should try to understand how the price of competitor’s products and how your product stacks up against similar products from the buyer’s standpoint This will allow you to best position your prices in the marketplace.
Instead of a dramatic increase in price, consider regularly raising your prices. While a small price jump may not seem important when compared to the full price, it has a direct impact on the profit margins and the bottom line.
OFFER DISCOUNTS AND REBATES
When discounts are properly marketed, they create an incentive for consumers to start buying. The discounts can be on limited products such as quantity discounts offered on two or more products, seasonal discounts or discounts on all products in a store-wide sale.
A rebate also known as a deferred discount is issued after the purchase of the product as a percentage of the price in cash. The publicized discount generates additional sales while the lower redemption rate reduces its cost.
USE EFFECTIVE MARKETING STRATEGIES
An obvious way to improve sales and boost revenue is through marketing. Analyze data on customer purchases and product preferences. Based on strategic plans, then develop targeted promotions to hit specific customers with ad messages and promotional offers.
There are a variety of marketing strategies and channels you can use to get your product or service noticed. This includes:
- Pay-per-click advertising
- Social media
- Email marketing
- Public relations
- Content marketing
- Traditional marketing through flyers and billboards
It can also be useful to review and analyze marketing data from previous years to see what strategies and channels work best for you.
INVIGORATE YOUR SALES CHANNEL
To energize your sales channel, you need to generate enthusiasm and a reason to buy. This can be done by introducing vibrant, bright-colored sales collaterals that include all your products and services and convey a sense of urgency, incentivizing sales partners and adding subscription sales.
REVIEW YOUR ONLINE PRESENCE
It’s vital to review your online presence periodically. Review your websites and see how they are being viewed on different devices. You can use analytics to review your website traffic and develop plans to improve the customer’s online experience. Use a combination of organic and paid search engine marketing efforts to reach your customers.
How to Increase Revenue Streams
Revenue streams are the sources from which your business earns money. Some examples of revenue streams are proceeds from the sale of goods usually to one-time customers, revenue earned from short projects and recurring revenue such as subscription fees or brokerage fees.
- To increase your revenue streams and gain more customers, market your business well and list it in more places. With the advances in technology, you’re no longer limited to the physical listing. Listing your place on an online marketplace, a website or on social media can help you reach more customers.
- Collaborating and bundling items helps in increasing your average transaction size by collaborating and packaging items.
- Retargeting your customers helps in increasing the frequency of transactions. This is easier with email marketing tools such as MailChimp and Campaign Monitor. You can re-target existing customers, track if they have opened your email and clicked on any of the newsletter links. Don’t forget to offer something for free such as a great tip that they might be interested in. For example, if you own a catering business offer free recipes.
- The best way to increase your revenue streams is by raising your prices. This, however, can be a problem when you’re in a highly competitive market. Consider the business situation and competitor pricing before raising prices for your products and services.
How to Increase Revenue from Existing Customers
An efficient way for any business to drive a short-term boost in revenues is by investing time in their current or past customers. It’s easy for businesses to get caught up trying to find new customers. In reality, it’s our past and current customers who can offer is the most return on investment.
- Create a list of your customers and clients along with a list of services and products that you provide.
- Analyze this customer list for cross-selling opportunities
- Identify the customers that are not utilizing all your services or products and make a list of those additional services you could offer them.
- Communicate with these customers and offer details of the related products/services that would be a good fit for them.
- Stay in touch with your customers by sending them newsletters, holiday cards, or reminder emails. After every visit, do a follow-up with your customers. This way your business stays at the top of their mind.
- Update your client and customers about new launches and special offers through website updates, specific email campaigns and mailers
- Use attractive referral programs to gain new customers
Instead of focusing on adding new clients, consistently looking for opportunities to grow your revenue without the increased costs associated with new client acquisition.
Content’s source Freshbooks