After getting a business off the ground, the next step is working on how to increase revenue. When broken down, there are just four main ways to make this happen, and successful businessman and entrepreneur from Costa Rica, Jose Duarte, shares the secrets.
One method is by increasing your customer base. Expanding the number of consumers implies you’re attempting to get more individuals the entryway. This methodology is generally clear: more customers to your store, or to your eCommerce platform, means more traffic and, ultimately, more revenue.
“Use what you’ve learned about past customers to draw in new customers,” explains Duarte. “Review your customer base and determine how they were drawn to your business. If, for example, you conducted a speaking engagement and saw an increase in traffic, look for more, similar opportunities. If they arrived through a guest blog post you authored, try to create more posts.”
In addition, ask your customers for referrals. Give them an incentive to invite their friends and family to purchase with you.
Increasing the transaction size will also help increase revenue. Put simply, this means that each consumer that makes a purchase purchases more each time. This can be done through upselling or even offering discounts when making multiple purchases in a single visit.
This can be achieved by suggesting complementary products to those they are considering purchasing. Upselling an integral item or administration when you have just pulled in a client is a shrewd method to get more income without gaining more customers.
Creating an increase in the frequency of purchases will also boost revenue. If a customer makes a purchase once a month, for example, provide an incentive to convince them to purchase more often. Introduce retainer services that entice them to visit more often and don’t let past customers disappear. “Stay in touch through email campaigns or email newsletters so that the business will always stay fresh in their mind,” states Duarte. Remember, it costs less to keep a client coming back than it does to find a new client, so keep the communication open.
The last option is probably the most obvious – increase your rates. Prices need to be evaluated constantly to ensure that they remain competitive, but also to ensure that they’re based on market costs and expectations.
Raising your costs implies you’ll gather more income from each buy a client makes. Accepting your volume, normal exchange size, and recurrence remain the equivalent, raising your costs will result in more income for a similar amount of energy.
Increase prices when you’ve gained new aptitudes or more experience. When getting started, you may need to have lower rates to attract new customers, but, once they understand the value of your products and services, as well as your ability to provide outstanding customer service, raising prices will not only be justified, but will help you create a more comfortable margin.
Of course, you can’t, in most cases, arbitrarily raise prices. The products need to be marketed in such a way to produce better perceived value. Says Duarte, “Promote the prices in conjunction with the value the customer will receive for the goods or services they’re purchasing. Just as importantly, though, you have to consider what you’re worth as a company.”
The ideal customer is your target customer and has a strict definition. It is a consumer that buys early, buys often, spends the most and who is willing to pay a premium for value.