If you want to bring in more money to your business, then you will need to boost your revenues. When you look deeper into this process, you will find that there are only really 4 ways for you to boost your revenues, and these are:
- Broaden the number of clients you serve.
- Boost their average transaction size.
- Increase the frequency of transactions per client.
- Raise your prices.
Let’s now dive into each of these a little deeper…
1. Increase Revenue With More New Customer Sales
Of the four ways to increase your revenue, this is the one most businesses focus on. There are two ways you can increase new customer sales:
- Sell your services to more people, or
- Convert more leads.
These may seem to be the same but there are slight differences. And, they both revolve around your conversion rates.
Do you know your conversion rates?
What I mean here is how many of the prospects you meet to become a new customer of your business?
If you don’t know this number, then you need to learn how to record and review it. Unsure how to calculate this, then let’s look at an example…
If you have 10 people attend a sales consultation with you and 4 of them become a new client, then your conversion rate is 40%. If you want to double your sales based on this, you’ll need 20 consults to make 8 sales.
Pretty simple, right?
The other option open to you is to increase your conversion rate. If you don’t want to work on getting more consults, you should work on your sales skills so that you can increase your conversion rate from 40% to 80%.
By improving your sales close rate you will create those 8 new clients.
It’s important you’re measuring these numbers and that you understand the dramatic difference any small changes will make to your bottom line. If you have any questions, feel to reach out to me.
[divider style=’centered’]
2. Increase Your Average Sale Per Client
Now that you’re converting more leads into sales, you want to next see how you can increase the amount each client spends with you.
More often than not, I find that businesses have no systems in place to maximize the revenue per client. Often there’s a fear of offending your new client (spoiler alert: you won’t, but it’s a common fear).
I want to make it clear that I am not suggesting you sell something more to a client just for selling’s sake, I’m talking about providing more value.
Prior to moving into my consultancy business I used to be a persona trainer and as a fitness professional, I knew my client’s needs and wants to evolve.
In the beginning, they might not have understood the importance of supplements. But as they learned more and saw progression towards their goals, they became more emotionally invested in sustaining and accelerating that progression.
So, it was natural for them to evolve into more educated consumers and look for other services and products that supported their goals and accelerate their achievement.
The bottom line is if they can’t buy it from you, they’ll buy it somewhere else. And the more they buy from you, the more comfortable (and dependent) they become using you as their primary “source” for everything based around whatever service you offer.
In my example, they would but nutrition supplements, exercise equipment and accessories. If you run a hair salon, perhaps they might buy hairdryers and other hair products from you.
McDonalds are the masters of maximising the amount they receive from each customer.
They do this two ways.
First they ask if you would like the Meal Offer. Then, the server asks you if you want to “go large”.
They create an Illusion of value and in doing that, they’ve increased the average sale of you, their client.
So, what can you do to increase your average client value?
[divider style=’centered’]
3. Increase the Frequency of Client Purchases
What are you doing to get clients to buy from you more frequently? Do you mail or email your customer often enough? I hear you thinking to yourself:
“I don’t want to spam my list!”
Or:
“I don’t want to pester my contacts, they may unsubscribe or tell me to stop mailing.”
Okay. These are valid points. But, let’s look at it this way…
What if you generate more money from those that stick around? Would it be worth losing the complaining part of your list if you create a few more happy customers?
I hope you said “Yes!”
Naturally, you want to provide value so you aren’t seen as a greedy business owner.
And you will do this through delivering fun, informative content when you communicate with your list plus if you segment your list into Active Clients, Inactive Clients and Prospects then you are able to send offers to a specific segment of your list as opposed to your whole list.
You can offer discounts, workshop tickets, upsell or bring a friend offers to existing clients or reactivation offer to inactive clients to have them come back to you.
Repetition of your offer will also increase curiosity and desire in your product. A discount can give them that extra nudge to move ahead and invest in your offer.
If you only offer one or two services, how can you increase buyer frequency?
[divider style=’centered’]
4. Raise Your Prices
This last method to boost your revenues is the one that strikes fear into most small business owners. So, let me ask you this question…
When is the last time you raised the price your client pays for your products or services?
Last month? Last year? Ever??
Whenever I ask this question the answer most of the time is “Too long ago”.
Why is that?
I believe it’s because it makes you feel uncomfortable. There is a fear that by doing so you will upset your clients – that they will reject the price increases, be outraged and take their business elsewhere.
Is this the case with you? If so, think about it this way…
By avoiding raising your prices regularly, you’re setting yourself and your business up for problems down the line.
Here’s why…
Every business owner wants their clients and customers to see them as Professional – that goes without saying. But to be seen as a respected Professional means to value yourself and your services properly.
When you don’t increase your prices for months or years upon end, what impression do you think that gives to your clients?
It gives the impression that you don’t value your time and expertise to charge enough for them, and if you give that impression to clients, why should they feel any differently?
Increasing your prices on a regular basis – and I’d suggest this be at least annually – sends a message that you work with those who respect your time, experience and expertise, not just those who are looking for the cheapest deal.
[divider style=’centered’]
Price increases are expected
Regular price increases may not be welcomed by individuals or businesses in any walk of life – but they are expected. And they are a key way to boost your revenues.
Think about it, your utility providers – such as Electricity, Gas and Water – increase their prices every year.
Your Broadband and Telephone provider does as well.
Do you like this fact? No.
Do you accept it?
Absolutely – you expect it!
Plus, the annual rate of inflation means that any business that is not increasing its prices – even if only by a few percent to stay in line with inflation – is effectively offering an unsolicited discount to its clients.
If I flipped the question from “Are you comfortable letting your clients know about a price increase?” to “Are you comfortable offering a 5% discount across your entire client base this year?” – which question makes you more uncomfortable?
For most sane business owners, it’s the 5% discount which will reduce turnover and profits.
Yet by not increasing your prices regularly – at least in line with inflation – you’re effectively offering an unsolicited discount to your clients.
Are you happy about your turnover and profits to fall this year?
Are you happy to do the same work for less than you charged last year? If not, you need to increase your prices.
So, there you go – if you want to make more money for yourself and your business – there are only 4 ways to boost your revenues, where will you start?
If this post has resonated with you but you still have some questions and might be in need of help in finding ways to boost your revenues, then why not take advantage of a free strategy call? You can book one by clicking here
