Do you want higher gross revenue in your company? How about higher gross revenue that correlates to higher profit? I think these sound like pretty great problems to have! Here are three main ways to increase sales.
- Increase the amount of customers you have
- Increase your prices
- Increase the amount of products or services you sell to your current customers
Increasing the amount of customers you have. This is pretty straight forward, your goal is to get more customers. You probably have a metric to know how much it costs to acquire a new customer. For example, I need to send 500 letters, to talk to 5 people about selling there house, to closing on 1 property. Now this is not a proven amount but if we averaged it out, it would probably be pretty close to this. So, how much did that cost me? (500 stamps, envelopes, ink, paper, list of properties, and time)
500 stamps= $250
Time and mileage= $2000
Total to acquire a customer: $2,510
So, I know, sending letters, I need to spend around $2510 to get another customer, along with 3 months of time to get a customer. We have other methods but this is an easy trackable one. So, the main thing to consider with getting a new customer is the time and money it takes to acquire a new customer into your pipeline. In this case, the cost is not the killer for me, its the amount of time I may be waiting to acquire a customer.
The second method is to increase your prices. If you are providing a quality product and you will not loose a lot of your customers, increase your prices. This correlates directly to profit! You know what it costs to acquire a customer and provide the service or product. So, by increasing price, that is immediate profit. If you can increase this even by 5%, you immediately are 5% more profitable.
The last way to increase your gross revenue is adding more products or services to your current customer. If you already have a good customer base and you have extra products or services that can benefit them, provide those to your current customer base. You do not have to spend the money and time to acquire a new customer, you already have a loyal customer. Do what you do best and provide value to those current customers. You will still have the cost of goods/service but you get rid of marketing and time cost.
Mike who helps my brother and I with flipping used to own a contracting business. He said 80% of his work was repeat customers, so he never had to advertise or market. He set up his work truck to allow him to provide an array of services to his customers when he was on a job site. For example, he would be at some ones house fixing a sink and they would say, “Mike, I also have a deck I was hoping to get repaired.” He did not have to spend time and money doing more marketing. He got to spend time doing the thing he is great at, contracting.
So, here are three tactics to increase your top line. Which one will work best for your company? I believe the 2 that will bring the most money to you is increase prices and provide more to your current customer base. You can probably only do one increase in price a year, however, you can add as many products or services as you want a year.
Analyze your company and see where you can get more income.
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