Three ways to increase your revenue.
When my husband and I started our own business, we had our backs against the wall – we had just embarked upon the recession that our Prime Minister at the time, Paul Keating, said we had to have, we had a large mortgage, were facing serious health challenges and had a newborn baby to care for. We had tried and we had lost, so it was time to change things up. We had no other choice but to make our business work, and the key to our success came down to having total financial clarity and understanding our numbers.
Through my experiences as a business coach, I often have clients come to me with cashflow challenges; they want to do more with their life and their business but they don’t have the money to do it. They can’t understand how they’re working like a bull at a gate in their business but still have no money in the bank. They certainly don’t have the foundations in place to create long-term wealth.
If your business isn’t adequately providing for your needs, or is in fact taking more away from you, it is never too late to make the necessary changes. No matter what stage of business you’re at – start-up, growing or a well-established business – it is always a good time to get clarity over your numbers and adjust your business model to make it work for you.
A few simple questions to ask yourself are:
- Have you got clarity of where your revenue gaps are?
- Have you mapped out the cash you need for the next three, six, 12+ months to meet your business needs?
- Are you making regular profits in your business, allowing you to save for your retirement?
A common mistake I see, when people are looking for more money, is that they go straight to trying to increase their number of leads. By default, and lack of business education, lead generation is where most business owners consider they can make the biggest difference in their business profits. They think that if they have more customers, surely they will make more money, right? Not necessarily. This is normally the last place I recommend focusing on because it generally costs money to generate more leads and it doesn’t guarantee a higher profit in the business.
There are often many other potential areas overlooked that can bring more cash to the bottom line first, before you look at increasing your number of leads. Strategies that can be implemented once and produce great results the first time, are great strategies to begin with – because they will continue to give you results over and over again.
If you know you need to increase your revenue but you’re not sure how, here are my top three ways to build your revenue that I have seen successfully implemented in my own business, as well as with the businesses I have worked with.
- Increase your conversion rate
Do you know how many leads you’re getting in – per day, per week, per month? How many of those are successfully converting to sales?
The first step to increasing something is knowing where you’re currently at, so, if you’re not tracking and measuring your leads, this is the first step.
Next, look at what you can do to improve your conversion rate. You might want to look at improving your phone script, implementing a better quoting system, being more efficient or timely with your sales process, sending out better educational material, or training your sales team.
Consistency is key; if you consistently market your products and services with a consistent message, if you consistently follow your sales process and deliver the same great customer service, and if you are solving your customers’ needs, you will build rapport and improve your reputation. A better reputation = a higher conversion rate.
- Increase your average dollar sale
Of the sales you’re currently getting, what strategies do you have in place to increase each customer’s average dollar sale? There are many different opportunities to do this: through upselling, educating your team and customers, and providing something superior to your competitors’ products or services.
Upselling is about offering something else to your existing customers when they purchase from you. McDonald’s well-known phrase, “Would you like fries with that?” is a famous strategy that would have increased their average dollar sale, increasing their total revenue by millions and millions of dollars all over the world. Most businesses have fries of some kind – a little extra “add-on” their customers can buy with their purchase that will enhance the product they’re already buying.
What “fries” do you have in your business? What can you suggestively sell as an add-on to what your customers are already buying, which will increase the value of the sale?
If you can upsell to the clients who already buy from you (and trust you), it’s far easier than getting brand new customers. For every sale you make that is higher in value, your average dollar sale will increase and your revenue will grow. A small increase to each sale, compounded over one year, can make a huge difference to your bottom line.
Again, tracking your numbers is key.
- Increase the number of transactions
Having a repeat business culture will help your business to continually generate consistent sales revenue in the future. How can you get your customers to come back, over and over again? The more times a customer returns, the more revenue you will make.
What do your customers want, and are you doing everything you can to provide that? Is your customer service up to scratch?
Are you providing friendly service to your customers and treating them like royalty? (After all, they pay your wages!) Building relationships with your existing customers will mean they’re more likely to come back as they build trust with you.
Another (often forgotten) method is following up with your customers. Were they happy with their product or service? Do you have a follow-up system? Do you follow up their buying cycle? If you know your client is likely to run out of their product in 90 days, do you send a reminder to them at 80 days to remind them to repeat-order? Better yet, do they have a regular shipment of their favourite products?
Just imagine if you increased your number of transactions by just one per cent, how much would this increase your revenue long term?
The three strategies I have outlined can each dramatically impact your bottom line, without any additional marketing, leads or customers through the door.
However, if you don’t map out and track your financials, you won’t be able to identify the gaps, ascertain the actions required to bring you closer to your targets, or see where your actions are resulting in the desired outcomes.
Financial success doesn’t happen magically – you have to plan it, strategise it and work for it.
Suzzanne Laidlaw, business reformer, entrepreneurs’ mentor and author of “What’s Your Plan?”
This story first appeared in issue 29 of the Inside Small Business quarterly magazine