- Contest Factory
- November 2, 2022
When it comes to your business, revenue matters most. It doesn’t matter how good your ads are or how pretty your storefront is—if your business isn’t generating revenue, you won’t be able to keep things running for very long. The team at Contest Factory is here with some useful strategies to increase revenue.
1. Set Realistic Revenue Goals
Like every other part of your business, setting actionable goals is crucial. Having tangible revenue goals helps you align your strategy and keep tabs on your progress. For instance, your first revenue goal should be to generate a profit. Later revenue goals should be to accrue enough capital for growth and expansion. You should rethink your long-term revenue goals after reaching each progress milestone.
You also may forecast your revenue by backing into your sales goals with necessary revenue to generate the sales. You need to run ads and post on social media – how much exposure will this get you? Now multiply average response rates to get the clicks you need. And then calculate the average conversion rate to see what you will need to get a sale.
2. Focus On Repeat Customers
Generally speaking, acquiring new customers costs significantly more than retaining existing ones. Repeat customers typically spend about two-thirds more than new customers. In 2020, small businesses reported that over half of their annual revenue came from repeat customers.
You can do several things to incentivize repeat purchases, including offering discounts, rewards programs, and free merchandise. Referral rewards are also a great way to keep existing customers and bring new ones to the platform in one fell swoop.
3. Explore Pricing Strategies
Price increases can generate additional business revenues – not often recognized that an increased value can actually increase response. Research your competitors to hone your pricing strategies to find a better position in the market.
Another way to generate revenue is to slowly increase prices over time rather than jack them up all at once. Customers will feel more compelled to stick with a company through incremental price changes rather than a single price hike out of nowhere. This also matters whether your product is a onetime purchase or an item that is refilled again and again – if it’s a consumable, price increases are not recommended. However, core products that are purchased once do not typically have customers looking back.
4. Upsell Products
Upselling products involves recommending more products after the customer has already committed to buying something. Upsells are a good idea to increase revenue because they rely on the fact that people are more likely to buy something when they are already making a transaction, especially when they are repeat customers.
For example, you can recommend products related to the customer’s cart on the checkout page. You can also push upgrades and add-ons that provide additional features.
5. Increase Payment Options
Increasing payment options can significantly boost revenue by giving customers more options on how to pay for things. Companies offering at least four different payment options generate nearly seven times more annual revenue than those offering less than four.
Credit and debit cards are still the two most popular payment options, but companies should consider integrating electronic payment options like PayPal, Amazon Pay, Stripe, or Google Pay. Research competitors so you can determine which kinds of payment options are the most prevalent in your industry.
6. Retool Your Marketing Strategy
Marketing is one of the best ways to increase product revenue. Collecting data on customer preferences and buying behavior will let you fine-tune your marketing efforts to reach potential customers most likely to buy from you. Businesses have several options for creating compelling marketing campaigns, including:
- Email marketing
- PPC advertising
- Social media advertising
- Blog posts
- Flyers and billboards
It helps to analyze trends in your industry to see which kinds of marketing materials are best at increasing revenue.
7. Offer Sales Promotions
Discounts and other sales promotions are great tools to incentivize customer purchases. You can offer discounts on products with limited inventory, those that customers commonly buy together, seasonal items, or leftovers from Christmas and other major holidays. Discounts lower the price for individual products but help you sell more products, increasing your revenue in the long run.
8. Allow Deferred Payments
Another potential strategy to increase revenue is to allow deferred or delayed payments. Layaway services and installments are popular as they allow customers to break payments into smaller pieces rather than a single lump sum. For instance, you can split a $200 purchase into four payments of $50 each.
9. Expand to New Markets
Small businesses that operate in a specific geographic area might be kneecapping revenue potential by not expanding. Extending services to new markets is a powerful method to generate revenue because it allows you to take advantage of markets where your direct competitors do not have as strong of a foothold. New geographic areas offer new opportunities for marketing and promotions to entice a new customer base.
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Increasing revenue should be at the top and any business’s priority list. Contest Factory offers platforms for increasing lead generation, brand awareness, and customer loyalty. Our products can improve customer engagement and set your business up for success! Contact us today to discuss options for gamification marketing!