Increasing revenue helps you to increase profit, and allows you to reinvest in your business and expand. Increasing revenue is a sign a business is in good financial health.
Whether you’re trying to grow, or just want to boost your sales, below are six tips that will help you increase revenue in your business.
6 ways to increase your revenue
1. Grow your customer base
More customers usually means more revenue. A bigger customer base can come from growing your geographic reach, such as opening a shop in a new location. It can also come from increasing your online reach, potentially achieved via advertising, or driving traffic to your website using search engine optimisation (SEO).
It can also come from more organic means. Maria Jones, chair yoga specialist and founder of Yuva Yoga, set up the 'Chair-Based Yoga Teachers' group on Facebook to better understand the types of products people are discussing and searching for.
By establishing a social media group that acts as a community, posts free content and answers queries, Jones attracted members that later became paying customers. Setting up the page resulted in two fully-booked yoga workshops with a turnover of £5,000.
“It also opened up a bunch of opportunities to collaborate with others," she says. "It meant my business did better in 2020 during the lockdown than the year before.”
According to Jones, knowing, growing and nurturing your customers and what they need is the best strategy for revenue generation.
2. Focus on retention
Once you have a healthy customer base, you need to work hard at keeping them. Customer relationship management (CRM) technology can help businesses build and manage relationships. For example, CRM can be used to offer exclusive discounts at optimum times.
Mark Oxenham, a business adviser and founder of Oxenham Associates, believes that in terms of targeting satisfied customers, a personal approach and delivering goods on time and at the right price are key.
“Winning back former customers is more difficult if there have been problems," he says, "but a personal approach and keen pricing with ‘service or quality guarantees’ can sometimes be effective when it comes to winning back lost customers."
3. Customer service and support
Good customer service is vital to customer retention. Four out of five customers would leave a brand to which they are loyal after only two or three bad customer service experiences [1].
Exceptional customer service can lead to repeat business – as well as free marketing if the customer then recommends you to friends.
For Oxenham, the issue of customer service comes down to integrity. He gives the example of one of his clients, a window manufacturer and installer, that had a tricky time replacing the windows for a customer. “The customer was demanding but the problems were resolved quickly using a pre-planned options matrix with definitive processes to be followed in difficult situations.
"The customer later moved to a much larger house and asked for some doors to be replaced for increased security. My client told them it was not necessary to change them, even though they could easily have agreed. The customer was impressed with their honesty and previous service and has recently ordered over £100,000 of new glazing.”
4. Data-driven engagement
Businesses have a huge amount of customer data at their fingertips - such as purchase history, birthday, location and previous engagement - to create bespoke communications. The message, timing and promotional offer can all be adjusted based on customer preferences.
Furthermore, you can also use analytics data to see which of your products are most popular. This can help you identify areas of your business to grow and invest in, as well as which products might benefit from higher marketing budgets. For an unpopular product or service, you might consider reducing its price, offering a discount or removing it from your offerings altogether.
You can also use data to map your customer journey, move the customer through a funnel and grow revenue. Identifying areas of your website funnel where churn happens more often helps you address underlying problems. For example, if you notice a lot of customers leave your website when viewing their shopping basket - perhaps they're unhappy with the shipping costs, or they hadn't realised that VAT wasn't included in the upfront price. Testing and learning using customer analytics tools and metrics is an important part of eCommerce and online sales strategy, so it shouldn't be overlooked.
5. Refine your pricing strategy
Raising or dropping your prices can have a big impact on revenue. If you're able to raise your prices and retain sales volume, then clearly your revenue will see a boost.
But struggling businesses could also lower their prices to attract more sales, take market share from competitors, and enhance overall revenue.
According to Oxenham, it’s vital to constantly review pricing – both in terms of costs and profitability, but also competitors’ pricing.
“A business must ensure they are completely up-to-date with the market position and what their competitors charge and how their pricing structure compares," he says. "Regular negotiation with suppliers is important to ensure you are getting the best price on raw materials and other costs. "You can then decide how and when to offer discounts and adjust pricing.”
Managing cash flow alongside vendor and supplier payments can be a tough balancing act -- especially when the end of the month draws near and bills are due. With an American Express® Business Gold Card, you get up to 54 days¹ to clear your Card balance, so you can keep your money in the account for longer and get more flexibility in your cash flow².
6. Find new revenue streams
Creating new revenue streams, seeking areas to add value, and identifying key products or services to increase profit should grow your revenue.
Jones, founder of Yuva Yoga, discovered a new income stream when she self-published a book. In the first week of publishing The Chair Yoga Handbook for Yoga Teachers, she made an extra £2,000 in revenue and acquired some speaking gigs and new yoga classes.
1. The maximum payment period on purchases is 54 calendar days and is obtained only if you spend on the first day of the new statement period and repay the balance in full on the due date.
2. If you'd prefer a Card with no annual fee, rewards or other features, an alternative option is available – the Business Basic Card.
Sources:
[1] Emplifi, 11 key things consumers expect from their brand experiences today
