Growing a small business is no easy feat. It requires a tremendous amount of perseverance, dedication and focus. If you want your business to bring in more money, this article contains methods you can consider. Imagine you are operating a boutique and you want to increase the amount of revenue that the boutique brings in, here’s how to apply these strategies:
- Increasing the number of customers means you are trying to bring more people in the door. This strategy is relatively straightforward: more visitors to your store will equal more sales, which (assuming the average transaction size stays the same) will bring in more money.
- Increasing average transaction size means that you are trying to get each customer in to purchase more. This is typically done through a process called upselling. The more of these items the customer purchases, the more they spend.
- Increasing the frequency of transactions per customer means encouraging people to purchase from you more often. The more frequently they visit your establishment, the more revenue your boutique will bring in, assuming the average transaction size stays the same.
- Raising your prices means you will collect more revenue from every purchase a customer makes. Assuming your volume, average transaction size, and frequency stay the same, raising your prices will bring in more revenue for the same amount of effort.
What more can you do?
Expand your market
Augment your existing client base with new products, new geographic territories, and additional sales resources. Many small businesses limit their marketing and sales efforts to the immediate area surrounding the central location of their business. Don’t assume another market is being served without investigation.
[READ MORE: A guide to identifying your profitable customers and improving your sales (1)]
Enter into cooperative sales agreements
Contact businesses that sell complementary products or services with a request to sell your products also. Many companies actively seek complementary products, as they add very little to marketing and sales expenses – it is just a matter of finding the right partner. Getting additional salespeople for no out-of-pocket cost is a sure sales booster.
Hone your pricing strategy
While a small increase in price may not seem significant when compared to the full price, the impact of the increase on profits is magnified since the increase will flow directly to the bottom line. Price is the single most important factor in a decision to purchase a product or service. A low price can represent a “bargain” or low quality in the buyer’s mind. Before implementing any pricing strategy, know how your customers feel about your product so that a change in price encourages the market behavior you want. Always consider your prices “temporary” and adjust them to meet the market and competitive circumstances. Knowing how your products compare with similar products from the buyers’ viewpoint, as well as the prices of competitive products, will allow you to best position your prices in the marketplace.
Bundle products
If you sell products that naturally go together, or are used for the same task or at the same times, consider selling them as a package.
Add, reduce, or eliminate shipping and handling charges
In lieu of raising the price of a product, consider adding a shipping and handling charge. The net effect on revenues is the same, while avoiding buyer backlash to a price increase. If you currently charge for shipping and handling, consider reducing or eliminating the charge for a specific time frame in order to stimulate sales.
Offer special discounts
Discounts, properly marketed, create a special buying opportunity in consumers’ minds, often spurring them to take action. The discounts can be applied to limited products, such as a single manufacturer’s brand, a limited category like school supplies, or all products in a store-wide sale.
In fact, you can create a sales environment for almost any reason:
- Quantity Discount: When two or more of the same product are purchased at the same time.
- Tie-In Discount (“Bundling”): When two or more different products are purchased at the same time.
- Seasonal Discount: When products are bought within a specific time-frame.
- Conditional Discount: When the products purchased are used or reconditioned.
- Stripped Discount: When the products purchased are “stripped” of one or more features.
Invigorate your sales collateral
The importance of sales collateral – brochures, presentations, product data sheets, pictures – is often overlooked by business owners. Your sales collateral, including your website, is a reflection of your company. A vibrant, bright-coloured document complete with drawings and pictures draws attention and generates excitement in its content; dull, boring materials are typically trashed without a second thought.
Review your sales materials, item by item, to see whether they convey the image and message you want to present to your customers:
- Do they include all of your products and their latest innovations?
- Do they adequately portray the advantages of your products by linking features to benefits?
- Do they convey a sense of urgency with easy instructions for purchase?
If your brochures, presentations, product data sheets, pictures, or website don’t simply and clearly present information which will spur your prospects to take action, it’s time to redesign them.
[READ ALSO: A guide to identifying your profitable customers and improving your sales (PART 2)]
Renew old relationships
There is a lot of chatter in the business circle about customer experience as a potential stimulant for revenue growth and this is simply because purchasers are now more empowered than ever before. It is easier to sell to an old customer than to find a new one. Products previously purchased wear out, break down, or become obsolete. Develop a marketing program to communicate with old customers and prospects, and contact them on a regular basis about your company and your products. Ask your old customers for referrals and written references. Make them feel as if they are a valuable component of your success. Downplaying old relationships is no longer an option for businesses, as the voice of the customer continues to get louder.
