You didn’t start your company to lose money. However, you also don’t want to break even. Ideally, you want the best possible profit margin. And one way to do that is to increase your revenue stream.
As a reminder, revenue is the cash that goes into the business. Usually indicated at the top of your organization’s income statement, revenue varies widely. Some years it may increase; some years, it may be down. Ideally, you want your revenue to be as strong as possible to cover variable costs.
Of course, increasing your sales usually doesn’t happen without a little tinkering. Sure, you can get lucky and enjoy unexpected spikes from time to time. But you cannot rely on luck. Instead, you need to come up with some measures to drive higher and higher sales.
1. Win back old customers.
Chances are you have information about your previous clients. These are the people you spent money to acquire and the people who spent money on your brand. Instead of accepting that they’re gone forever, why not take steps to rekindle their interest?
For example, think of all the customers who came back, filled a digital cart, and then left. According to Retention.com7 out of 10 buyers are in this category. Your goal is to use the data you already have about them to encourage them to reconsider. You can send a text, email, or even a direct message as a reminder. Or, you can try a retargeting campaign.
While you won’t get back everyone who left, you will bring some back into the group. As a result, your revenue will be stronger than before. In addition, you will have the opportunity to renew your relationship with these “boomerang” buyers.
2. Increase your product or service line.
Much companies strive for a revenue boost invest in expanding their product or service. The trick to making this work is to make sure that the new services are relevant. For example, an electronics store that sells winter leisure goods to adult consumers would not want to add wedding gowns to its product line. The disconnection would be too great.
On the other hand, the company itself may want to consider adding outdoor pet winter supplies and gear. Many people bring their dogs (and some cats) with them on hikes, trails, and other excursions. Therefore, it might make sense to offer customers the opportunity to keep their four-legged companions comfortable.
Be sure to do your research and don’t just follow your instincts if you’re going down this revenue-generating route. After all, you’ll be spending upfront, and you want to minimize your risk as much as possible. The easiest way to do that is to do your homework and expand intentionally.
3. Reduce sales friction point.
A typical sales funnel is reversed for a reason. As leads move deeper down the funnel, some start to flow out. This is natural, normal and expected. However, it doesn’t give much of a head start to your revenue.
Sit down with your team and go through all of the customer journeys that make up your sales funnel. Cross-reference those journeys with the data. Where do you see the main drop-off areas? Those are the gaps — and if you fix them, you’ll see a corresponding spike in conversions at the bottom of the funnel.
If you’re not sure how to fix your mismatch, consider working with a marketing professional. It’s worth spending the money to get things right the first time. If you want to do everything yourself, make small changes that can be tested in real time. Don’t try to fix all your vulnerabilities at once, because you may not know which strategy is working.
4. Work harder in cross-selling and up-selling.
Consumers have had a statistically good experience spend 140% more on purchases compared to their dissatisfied counterparts. However, they won’t automatically know what else to consider buying from your online store or catalog. You have to help them by recommending them items through cross-selling and upselling techniques.
Cross-selling is selling something that is compatible with what the customer is buying. For example, a consumer buying a sofa might want a chair, a couch, a small table, or a floor lamp. Upselling is the sale of something more expensive than what the customer originally chose. Adding cheese or sautéed mushrooms to a burger for a fee is an example of an upsell.
The good news is that there is a lot of software out there to help you automate cross-selling and upselling. Software — often augmented by predictive ML and AI technologies — can “fetch” cross-sell and up-sell options. When done well, cross-selling and upselling can have a significant impact on your sales rates.
5. Consider the subscription model.
Another way to give your company some reliable income is through registration. Nearly any product or service can have a subscription element. That’s why an ordinary person pays $200+ monthly subscription. It’s important to ensure that your subscription has enough value for consumers to keep paying.
Part of the reason subscriptions are profitable is that most consumers book them and then forget about them. People rarely use their subscriptions the way they think they should. That’s why no one canceled their gym membership in February even though they stopped going in mid-January!
You can be as creative as you want with your subscription. Anything goes. Who would have assumed that clothing became a subscriber’s joy? Or do people want to deliver men’s hair care products? StitchFix and Harry’s Razors, who is that. Therefore, be open to trying something out of the ordinary.
6. Explore other objects.
Chances are you haven’t explored all the possible audiences for your brand. These could be niche branches of your regular audience, or completely different audiences than the ones you sold before. Being able to conquer another target market can bring new life to your revenue.
Not sure how to reach a novice audience? Doing some social listening can be a good way to start. Find out what your customers are saying about your products online. Then find out what they say about your competitors’ products. You may discover some hidden audiences that you never marketed to.
Lucky Charms went through this when the brand realized they weren’t marketing to a large segment of buyers. Turned out, adults like happy marshmallows almost as much as children do! This is why Lucky Charms has been making its ads more adult-friendly for a decade. Undoubtedly, its sales reflect its sweet revelation.
7. Improve your brand presence.
People can’t give you hard earned money if they don’t know you exist. Promoting external content marketing and public messaging can get your company name in front of consumers. The more popular your brand becomes, the more synonymous it becomes with the products or services you offer.
A quick way to establish your brand presence and reputation is through social media. Staying active on social media sites that are popular with your target buyers will give you a little boost. You just need to make sure you post and comment regularly. Social media is about engagement, not just sales. The more you give and take, the more buzz you create.
You can amplify your social media presence through influencer marketing and paid advertising. Used in tandem with the implementation of organic content, influencer marketing and advertising will strengthen your credibility. In the end you will get a nice boost that will translate to your sales.
8. Adjust your price.
Your price point will affect your revenue. Even if you are worried about a price increase or decrease, consider it. Never assume that you will lose customers if you move forward. Many customers who like what you have to offer will have no problem paying a little extra. As noted by The New York Times, Consumers rarely jump ship as long as your price hike is not overzealous.
One caveat, though: Be careful about raising prices without warning, especially if you have regular customers. A customer who buys from you every week or month will notice the price increase faster than a customer who buys occasionally. Make an announcement that your price will go up Show your customers you’re thinking about their needs. Also, it makes them feel like you’re not trying to pull fast.
However, feel uncomfortable going higher? Give your best shoppers the chance to keep buying at the same low price for a limited time. Or, keep prices the same for items purchased in bulk.
Your company’s revenue is a line item over which you have more control than you might think. If you want to see it grow, act now. With a few changes, you can have ample revenue and be more profitable than you think.
First published on due date. read here.
Featured image credit: Monstera’s photo; Pexels; Thank!