How to Increase Revenue in a company.
The number one way to increase revenue is to increase the Average Purchase Value.
This is easy to understand in practice. According to Thomas Hogg, a famous german business consultant, the other great way to get more income is that, instead of getting 19.95 euros of average purchase every time the customer says yes, we sell for an average value of 29.95 euros.
How do we ensure that every time a customer buys from us, they do so for a higher value than usual?
Offering “cross products” at the time of sale
That means that if they are taking a radio, I offer them batteries or another product related to the main purchase. Do you take that mobile? Take a look at this case, because we all know what happens, it is very beautiful and scratches looking at it.
“Interesting hammer that you have in your hand, do you want to take these sale nails too?”
The point here, as with the following tactics, is that we must actively offer those related products. As always, we can’t expect the buyer to be the one to take the lead.
Selling is our job, not the customers.
We also have to take advantage of the fact that one of the times when someone is most receptive to buying is precisely when they are already buying. To best apply this strategy, here is what works best for cross-selling.
Including more additional quantity of the product at the time of sale
Similar to the above, but I am not offering you something related, I am offering you more of the same offer.
In this case: “The one you have in your hand is an interesting hammer, do you want to take another one at 50%?”
This tactic works especially well for McDonald’s and the like and is the famous “Supersize me.” When someone asks for chips and soda, they are offered to enlarge it for a little more.
The key is again that we must actively offer it.
I will never tire of insisting on the importance of this. The customer always had the option at McDonald’s to increase their chips and soda for a little more, there was even a sign well in sight that reminded them. But it wasn’t until tellers were instructed to actively offer it that sales figures skyrocketed.
Raising the price of our current offer
This is the fastest and most direct way to increase the value of the average sale of our company, as it will increase automatically if we increase the price.
Of course, we cannot raise the price just because, although there have been success stories in which this has been enormously successful.
In order not to risk, we will preferably want to start by increasing the value of the offer that we have already seen. That way, we can always justify that price increase.
Likewise, with the price increase, we should try to target customers of higher economic “quality”, as they tend to be the ones who leave the most money and have the fewest complaints in our company.
Which connects to the next point.
Offer Premium products
That is new products at a higher price than we are used to.
This will also help us to detect which current customers are the “cream of our coffee”, those who consider us the best and the most satisfied are among those we have already collected.
Here we must take into account what we have already said about creating a new product and trying it in a limited way before we get 100% involved.
Creating add-on product packages
The so-called bundling strategy.
Here what we do is simple, if you take a hammer it costs you 5 euros and if you take nails it costs 2 euros. Well, if you take the hammer plus the nails in this pack that I offer you, it costs you 6 euros.
Here’s in more detail how to apply the bundling strategy to increase total revenue and average revenue per sale.
Discounts for large purchases
This is another classic of the promotion, which does not stop working well.
If you buy me a hammer, it costs 5 euros, but if you buy 5 hammers, I’ll leave them at 4 euros each, or I will discount a percentage of the total.
No matter how we organize it, offering discounts for larger purchases tends to increase the average value of each purchase that the customer makes since they have an incentive to make it larger.
We have already seen the main tactics to get new customers and that anyone who buys something from us does so for a greater value. Now we go to the third fundamental way to increase income.
It is probably the most important.
Ways to increase revenue: Getting more repeat purchases
In other words, customers who have trusted us to come back to do business more often and buy from us again.
The fundamental basis to achieve this is …
Offer a customer experience that is absolutely superior to the rest
There are no more tactics that are going to work in this section if we don’t get this going first.
True entrepreneurs know that the game they are in is not a matter of selling products or services, but of offering a complete experience.
That is what we must aspire to and what we have to optimize.
The customer experience encompasses the context in which the transaction occurs, the product itself, the deal before, during, and after, etc.
All the details must be focused to provide this experience in the form of delight because if not, I do not know how we are going to expect them to repeat purchases with us. We wouldn’t do it ourselves, so we can’t expect them to.
Here’s, for example, a simple trick we can use to improve that customer experience.
Increasing our offer for current customers with more products
Expanding the offer not only serves to attract more new people who until then did not consider us, but it also helps us to offer it to customers already obtained.
We already have a list of clients (hopefully satisfied thanks to the above tactic). Well, offering them a new product is the fastest way to earn income.
Take a look at these results from a marketing campaign in Resources for SMEs a while ago. An identical campaign was used on a group of clients already obtained and on a list of contacts that were not yet clients. Look at the numbers with a yellow background and do not worry too much about the specific concepts, they are specific names of that campaign and the way of working.
As we can see, current customers are, without a doubt, the great secret to increasing the income of a business.
Improving the relationship with customers
I’ve always said that the relationship is the great multiplier of the sale.
It is something I always try to instill. If my brother is in the business of marketing a product and offers it to me, I will probably buy it even when I don’t need it.
Because he is my brother, and the relationship with someone is a thousand times more powerful than stacking all the marketing tricks that we know.
Obviously, we do not want them to buy products that they do not need like in the example I have given of my brother, but that gives an idea of the enormous power of the relationship.
How many times have we talked to a client to ask him how he is doing, without wanting to sell him anything?
How many times have we worried about how our product has done without it being an excuse to endorse another brochure?
Because that’s the way to improve a relationship, which connects in passing with the following tactic …
The relationship with a client or with a contact grows cold over time. It’s normal, it was based on a commercial transaction and has thousands of other things in mind, thousands of other competitors trying to get you to buy something else.
That’s why we fade out of his mind soon after and the relationship cools off.
To temper it, it is necessary that we communicate frequently with them. It is the way to stay on their radar, so that they do not forget us, that they think of us when they need something new related to what we do.
There is a part of that communication that we can automate. However, at the bottom of it all, automated or not, we have to meet the main requirement: that we really care about our customers and their success.
Because without that, we have nothing and, above all, we will never have those new purchases that we crave.
In addition, communicating frequently also serves to create and detect more opportunities.
Much of the success in business is based on being in the right place at the right time. The best way to do that is to drop by those places more often, communicating frequently.
Special events for clients only
A powerful way to persuade customers is to show them that they are special. One way to do that is with customer-only events, materials, or products.
We will improve the relationship and we can offer you something new. We can do it in a more Premium way, offering something of greater value and connecting with the tactics of the previous way to increase the average sale.
Continuity products and services are ideal for the profitability of a company. At the end of the day, it is a way of applying the strategy of focusing on already achieved clients.
So, if we can offer a continuity product or service, we should do it without hesitation.
It can be a basis for our profitability, without having to always be immersed in the search for new clients.
Loyalty programs and points
A classic that you will have seen in many places, from supermarkets to workshops.
The point is to offer incentives for the client to return to us rather than exploring other options.
Now, many loyalty and point programs don’t work. That is why we must take into account how those who, in the real world, have been successfully applying them do it.
To do this, we can refresh our memory with this material on how to establish an effective loyalty system based on data.