Do you wish your business made more money?
Today we’re going to talk about increasing your revenue. I’ll begin with the good news, news. There are only four ways to increase your revenue. This means that everything that you hear about or think about or do to increase revenue comes down to these four strategies. The bad news? There is no secret solution to increasing your revenue. There is not a formula that you can implement that will create a shortcut. That’s also great news actually as you can stop falling for the ads that tell you otherwise. Look at that, you’re already saving money, reducing your cash flow, and increasing your profits!
All kidding aside, once you understand the four strategies, the work will come from implementing them and putting the time in. The four ways I will describe may seem obvious, but they work. Your success will come from showing up, day after day, and putting in the effort continuously and with purpose, not from crazy schemes.
Increase the number of your customers
The first strategy to increase your revenue is to increase the number of your customers. This can be done in a few ways. It might be that you’re not reaching enough people in your target audience. If you have a brick-and-mortar store in a neighborhood, perhaps you feel like you’re not reaching all that foot traffic that’s walking by somehow, or that you’re not reaching the people that live in that neighborhood who really are your demographic.
It could be by expanding your market and going into a new demographic. If you currently have a very specific niche, you could move into a second one. This would allow you to tap into a new section of people, instead of trying to get more from the people who you’re already targeting. This could be achieved by creating new products to reach new people. It could also be done by marketing to attract a different segment of people.
Increase the transaction size
The second strategy to increase your revenue is to increase your transaction size. This means that when people are purchasing from you, that the average transaction size would increase from let’s say $25 to $50. This could be done in a variety of ways, but upselling and cross-selling are fantastic ways to start. You can go listen to the podcast episode on cross-selling if you are unsure of what that means.
You can also look at ways that you can maybe bundle products or services. With products, they could purchase an entire outfit or collection at once for a slightly reduced rate and it could greatly increase the transaction amount. Maybe you are making it so that when people are purchasing from you, they sign up for a six-month amount of sessions instead of a single session.
Or you can encourage your customers that instead of purchasing your base service or the product, to upgrade and get a more luxury, more expensive version of that service or product. The idea of increasing the transaction size is basically saying when somebody is purchasing from you, that the transaction average amount would increase to a higher dollar amount.
Increase the frequency of transactions per customer
The third strategy to increase your revenue is to increase the frequency of transactions per customer and their CLTV (customer lifetime value). You could do this by creating a membership or subscription service or product. This would create a reoccurring paying for something. Or maybe you create a sales funnel where they go through one service or buy one product, and then you have them immediately purchase the next thing.
If it’s a service, when your client reaches the end of the time period, you would congratulate them for completion and then immediately introduce the next level. If you create products, you can introduce new offerings in seasons, giving them a reason to return with each quarter. If you sell consumables, like food or soap, you want them to continuously be coming back for both themselves and purchasing gifts for others.
To achieve this strategy, you will need to provide excellent customer service and nurture your existing customers and clients so that they are continuously coming back to you. You want to form relationships with your clients and customers for this reason. If people know, like, and trust you, they will want to continue working with you.
You will also need to make the process of working with you or purchasing from you easy and without barriers. You want them to love the smoothness of your online process or coming into your store and being in that environment. They should look forward to hearing about regular updates and new things that you have, or reminders of things via social media and email, as you are providing value to them. By paying attention to these aspects of your business, you will increase the frequency of the transactions per customer. This is my favorite strategy as we all know that in business, it’s cheaper to get an existing customer to purchase again than it is to get a new customer.
Increase your prices
The fourth and last strategy to increase your revenue is to increase your prices. This could mean that you are increasing your actual hourly rate, be it the price of your services or the base price of how you price your products. It can also mean that perhaps you expand your product or service offerings.
If you sell services, you can do more than just straight-up also increase the hourly price. There’s a lot of psychology between hourly prices and packaged offerings. Maybe you design and offer a program. Or offer a tier of services and programs with higher price points.
If you have products, it could be not just increasing the prices of your existing products, but bringing in products in a higher-priced option. For example, when I owned my jewelry company, I created a Luxe line, so I not only had my normal collection with price points from $50 to $175. I also had created the Lux line, which started out at $250. So those pieces and that collection allowed me to increase my prices without having to raise the base of the prices that my customers were used to. There are a variety of ways that you can increase your pricing without just straight-up changing the prices of your existing products and services.
Now get to work
If you are wanting to increase your revenue have a look at these four strategies and decided where you want to focus. You can increase the number of your customers, increase the transaction size, increase the frequency of transactions per customer, or increase prices.
You may be able to do one thing that actually touches on multiple of these strategies at once. The key is to create a plan, take action, and test what works. Then tweak until you are achieving what you want to achieve.
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