Are you currently running a business and hoping to boost your revenue?
Well, as it turns out, it’s not that difficult to do!
According to the Personal MBA by Josh Kaufman, there are four main ways you can increase revenue for your business:
1. Increase the number of customers
2. Increase the average transaction size
3. Increase the frequency of transactions per customer
4. Raise your prices
Let’s take a look at how you can make this work for you:
Increase the number of customers
This is the oldest trick in the book and it seems very straightforward. Want to make more money? Attract more customers to your business.
More customers means more transactions, and that means more revenue for you.
But that brings us to the next question:
How to attract more customers?
Believe it or not – the best way to attract more customers is through your existing customers.
That means through loyalty and referrals.
People love sharing experiences and making recommendations to their friends – and you can capitalise on that.
Make sure to provide your customers with an exceptional experience whenever they shop with you so they can’t wait to go back and tell everyone about it.
After all, we all know that word of mouth is the best marketing tool ever!
Another way to attract more customers is to make use of digital ads like Facebook and Google.
Through these ads, you will be able to target your ideal customers according to age, interests, gender, hobbies, and many more.
The right targeting will bring the right customers to your doorstep.
Now let’s move on to the next step…
Increase the average transaction size
According to Josh Kaufman, this means trying to get customers to purchase more.
You may be familiar with the term ‘upselling’ – that’s basically what this is.
You know when you order a meal at McDonald’s and the person always asks “large meal for you?” That’s the perfect example of upselling.
Some businesses get customers to spend more by offering incentives like a membership card, free gift, or by giving a discount on subsequent items.
Most online stores try to get you to spend a certain amount of money to qualify for free shipping.
Use these methods and adapt it to your business – and watch your transactions go up.
Increase the frequency of transactions per customer
This means encouraging customers to purchase from you more often.
Get customers to come in once every week instead of once every month.
The best way to do this is by engaging your customers through a loyalty or rewards program.
Through the program, you are able to get to know your customers better, what they like at your store, how much they usually spend and so on.
Based on these data, you’ll be able to send them personalised reminders and promotions – which will increase the chances of them visiting your store more often.
There is also a chance to foster loyalty by providing them with a personalised customer experience.
Now on to the final point…
Raise your prices
This sounds like the most obvious solution. The higher the prices, the more money you make for each transaction.
This is assuming that your average transaction size and frequency stays the same.
Studies have shown that customers don’t mind paying more – as long the product and experience is better.
However, if you raise your prices, you have to make sure that your products are worthy of that price tag.
Otherwise, your customers will run off to the next best vendor.
You have to make sure that customers feel like their money is being well spent on a high quality product or service.
Apple, for example, keeps raising prices for their products each year, and yet customers continue to line up for them.
This is because Apple has established their reputation as a brand that delivers – and customers are convinced that the money spent will be worth it.
Ideally, that’s the confidence you want to give your customers.
How will you be using these tips for your business? Share it with us in the comments below.