How to grow revenue and increase profits is a very common topic of conversation with my clients. More than often than not, there is no quick answer with one easy way to achieve it. So, here are seven systemised steps you can look at that will have a positive effect on your income:
- Increase the number of leads
This is down to marketing. Are you saying the right thing to right people at the right time? Can you decrease activity in an area that might be distracting you from the most beneficial activities? Do you have a strategy in place that keeps a consistent flow of enquiries coming in?
- Improve your conversion rate
Are you clear on how many leads become sales and at which point on the customer sales journey the leads convert? There may be steps along that customer journey that you could improve or extend with touchpoints. Take a look at ‘Using your sales process to improve your customer’s journey’
- Grow the number of sales
Easier said than done admittedly, but when your customer is in ‘buying mode’, can you introduce the idea of a package or bundle, cross-sell to something complementary or offer an incentive for introducing a friend?
- Can you improve the average value of a sale?
This looks at the cost of your products or services and is often the quickest way to grow your income, but it’s not always the easiest path to take. You may lose one or two customers as a result, but those who stay will maintain your revenue line by paying the higher rate, and you will improve your bottom-line expenditure by saving the time spent on activities you deliver to lower paying customers. Again, packaging or bundling will improve your average sale values.
- Improve your profit margin
Are you regularly reviewing your costs to maximise your return on investment? Can you reduce costs of production by increasing your own productivity to maximise the use of your time, or streamline the supply chain? Are you sure that all the expenditure in your business is an investments and not a cost? You might find additional value in ‘Stop focusing on the wrong numbers in your business’.
- Encourage repeat purchases
This step asks you to consider your after-sales processes. To continue the customer journey on to the stages of loyalty and advocacy. Is there direct follow-up marketing messaging once a sale has been completed? Perhaps consider how to incentivise a repeat or complementary purchase, recognition of an anniversary, birthday, or a seasonal occasion such as national days or months. Are you reminding your customers that they can buy again either the same thing or something new?
- Improve customer retention
What is your customer turnover like? Why are they leaving your business and how can you make them happier? It can be the case that it’s easier to take care of existing customers than it is to find new ones…
These seven steps are linked to the ‘marginal gains philosophy’, which demonstrates that by increasing your profits by a small percentage at each of these steps, the result would be significantly greater with the cumulative effect.
If this article has been of value to you and you’d like to discuss these steps in more detail, with your own business in mind, then please do get in touch for an hour of free business mentoring, or download my free e-book, ’51 more proactive ways to win more customers’.
Wishing you all best with growing your profit – Mike.