4 ways to increase revenue – and how the Nashville Chamber can help
Increasing revenue is one of the most important aspects of growing your business.
This article will break down the simple ideas behind revenue growth and give you some concrete tips for how to implement a revenue growth strategy.
There are four ways to increase your business’s revenue:
- Getting new customers
- Increasing purchase amount
- Boosting purchase frequency
- Raising prices
Getting new customers
This is probably the strategy that comes to mind first when you think about increasing your business’s revenue. Getting new customers can involve increasing awareness of your business’s products or services among your existing target market, finding previously untapped markets or even expanding your offerings to attract new customers.
The Chamber can help you find new customers, and increase revenue, by helping boost your visibility with the following benefits of membership.
- exclusive advertising and marketing options
- visibility on our website to thousands of website visitors
- digital and event sponsorship opportunities
We can also help you create relationships with new customers, or referral sources, with some of the best networking events in Nashville. Read more about how a Chamber membership can help you get more customers here.
Increasing purchase amount
Another way to grow your revenue without getting new customers is to increase your revenue per customer. In other words, making more money per sale. There are two techniques your business can employ to achieve this goal – upselling and cross-selling.
The first way to increase revenue per customer is to offer more expensive options when a customer is making a purchase. For example, a fast food cashier asking if you’d like to upsize your order for just a dollar more, or a car salesman showing you a newer model of the car you’re interested in. Even service-based businesses can take advantage of this technique by showing the benefits of higher-level service packages to customers currently using entry-level options. Statistics on ecommerce upselling show a 4% increase in clicks and sales on more expensive products when customers are shown these options on a product page.
Cross-selling involves offering related or complementary products or services to customers. This technique has become particularly popular on ecommerce sites that show “related products” or “customers also bought” sections on product pages to encourage customers to purchase more. Amazon has reported that 35% of their revenue comes from this cross-selling strategy. However, cross-selling is also effective for businesses that offer services. For example, a bank may offer special rates on mortgages or loans to existing customers with a checking or savings account.
Both of these techniques for increasing average transaction value will only be successful if the products and services you are attempting to upsell, or cross-sell, actually offer additional value to the customer.
If the more expensive product will not actually meet your customer’s needs, you run the risk of alienating that client. Furthermore, if you attempt to cross-sell a product that is not related or complementary to the products the customer is already buying you could be seen as tone-deaf.
Boosting purchase frequency
Another way to increase revenue from existing customers is to increase their purchase frequency, which also measures customer loyalty. Encouraging customer loyalty through a loyalty program is one way you can boost this metric.
Customer loyalty programs are sometimes difficult for small businesses to implement. We have published a guide to creating a customer loyalty program that works for your small business that you can read here.
Increasing purchase frequency through remarketing efforts is another strategy you can explore. Remarketing, also known as retargeting, directs targeted messages to people that have already visited your website.
By using analytics tracking on Google, or installing a Facebook pixel on your site, you can then craft ad messaging that is targeted specifically at people who have shown interest in your product or service. Existing customers can also be uploaded as customer audiences into most advertising platforms. These ads can show products that these customers have bought in the past, encouraging them to purchase again, or services they might be interested in based upon previous behavior.
Lastly, show your existing customers your appreciation. If you deliver value to your customers, and show genuine gratitude for their business, you can great lasting business relationships that can also translate into more transactions.
To show appreciation for existing customers, try offering exclusive discounts, sales or content that only they can access. One option is an exclusive newsletter for existing clients.
Knowing when to raise your prices is not a black and white decision, but prices that are too low may be the reason your business is struggling. However, raising prices without losing existing customers can be a tricky tightrope to walk.
The first step to a successful price increase is to make sure your existing customers are satisfied with the products or services you are offering them. If you are already struggling to deliver on promises at a lower price point, it will be very difficult to justify a price increase to clients. On the other hand, happy clients may be more willing to accept a price increase.
If you do have happy customers, consider one of the following options to roll out a price increase:
- Find small ways to add extra value for your customers in ways that don’t cost you a lot of money. For small businesses, this could be as simple as heartfelt, personalized thank you messaging to clients, free gift-wrapping or shipping over a certain purchase amount or a free piece of content, like an e-book.
- Bundle products and services together. If you need to raise prices across the board, offer packages that provide discounts when items are purchased together.
- Offer more discounts. When you raise prices, you can avoid alienating some customers by offering more frequent discounts or sales.
- Make the price increase worth it. By this, I mean consider also increasing quality in some way along with price. If customers see that the product offers more value to them, they’ll be more accepting of a price increase.
There are other ways to increase prices, like reducing size or number of products while keeping prices the same or creating arbitrary products and services specifically to mask price increases. However, these options have a bigger chance of backfiring than being honest with your customers. If clients see you as dishonest, you’ve got a bigger problem than losing some price-conscious consumers.
Increasing revenue is a multi-faceted goal that should include pieces from each of the four ways to increase revenue outlined above. Joining the Chamber is a great way to boost your business’s visibility and find new customers.
Learn more about the benefits of joining the Chamber by filling out the form below to download our free guide to membership.