Want more revenue for your business? You've stumbled upon the right post.
These revenue strategies are so simple, it's surprising how so many businesses miss implementing them.
Fret not. By the end of this post, you'll be increasing your revenue. Let's get started.
1 – Increase # of customers.
Get more customers. A no-brainer.
But acquiring new customers is difficult and expensive. Here's how acquiring customers would look like for a typical modern business.
- Build a landing page with a 'lead magnet'.
- Run ads to the page.
- Collect leads.
- Call leads and attempts to close.
- Run more ads.
You can see how this becomes quickly unsustainable. Competitors eventually begin running ads as well. The cost of ads continues to increase. Soon it becomes unprofitable.
What if there were other ways to increase revenue?
2 – Increase AOV (Average Order Value).
Let's use an example of a cafe business.
Ahmed runs a coffee kiosk by the MRT train station. He receives about 200 customers a day. A customer typically spends RM5 on a cup of coffee.
Ahmed's revenue: RM1,000 per day.
What if Ahmed increased his average order value? A strategy he could use is to implement an upsell, with a combo deal – where his customers can get a sandwich on top of their coffee for only RM4 extra.
Of course, not every customer would buy the extra, but let's say 30% of them do.
Ahmed's new revenue:
That's an additional RM240 revenue with the same amount of customers! Ahmed didn't have to find new customers. All he did was to look at ways to optimize his AOV.
OK, how can Ahmed further increase his revenue?
3 – Increase purchasing frequency.
To get his customers to purchase more frequently, Ahmed decided to introduce weekend specials – where he would brew exotic coffees. He made sure to make them available only on weekends, so he could attract his customers to visit again.
With this strategy, his customers went from visiting an averagely 4 times a month to 6 times a month.
Let’s look at the numbers:
Before optimizing his revenue:
- Customers: 200
- AOV: RM5 average per order
- Frequency: 4 times a month
- Total revenue per month: RM4,000
After optimizing his AOV & purchasing frequency:
- Customers: 200
- AOV: RM7 average per order
- Frequency: 6 times a month
- Total revenue per month: RM8,400
That’s a cool extra of RM4,400! That is more than double his initial monthly revenue – with the same amount of customers.
Now, imagine the possibilities if Ahmed's customer base starts to grow as well with a referral strategy.
How to implement the 3 revenue multipliers in your business.
- Increase # of customers.
- Increase average order value (AOV).
- Increase purchase frequency.
Most businesses only think about getting more customers. But when you optimize the 3 levers, you'll see exponential growth in revenue.
The next thing you might say is – OK, this sounds great. But how do I actually implement them in my business?
So I want to share with you a few strategies.
Strategy to increase average order value (AOV)
To increase the AOV of your customer, you need to increase the value they receive. This is known as upselling.
McDonald's does this ALL the time. The script is embedded in each McDonalds' staff.
Would you like to upsize? It's just RM1 extra.
Would you like fries with that?
From the McDonald's example – you'll see that upselling is NOT a negative thing. The customer receives more value (fries) and happily pays for that RM1 upgrade.
Upselling only becomes negative if you don't give enough value to your customer, or try selling them something they don't need.
Here’s an upsell example from Exabytes:
When purchasing a domain name from Exabytes, you'll see an upsell for an email and hosting.
Upsells do not have to just be at the point of purchase (POP) or through funnel software. If you run a physical business, you can simply offer an upsell upon your customer purchase or project completion.
- A photographer could provide album printing as an add-on service.
- A software company (SaaS) could offer to provide customized service on top of a software subscription.
- A clothing store can provide more value by upselling bundle deals.
- A designer who designs logos can add value by offering rebranding services.
Strategy to increase purchase frequency.
What is your customer's recurring need?
For example, people who go for skin laser treatment might have a recurring need for facial treatment.
People who buy a PS5 will have a recurring need for new games.
- A marketing consultant can offer RM1,000 support access, after completing a one-off project.
- A web designer can offer an RM500 retainer fee to maintain a client's website.
- A supermarket, can offer a membership for their customers to get better deals.
Most businesses can create a retainer model. It comes down to thinking about your client's recurring needs.
Of course, implementing these revenue multipliers is easier said than done. It takes creativity and effort. A lot of the time you'll spend will be on researching your clients and finding out what they need.
That's why students in Breakthrough Marketing, our digital marketing course don't just come out with one or two strategies. They would figure out a few strategies and test it with their clients.
How will you increase your business revenue? Let us know in the comments below.