Sometimes, the amount of revenue your business is generating may not be enough to sustain you and your employees. There are many reasons why you need to generate revenue, whether you want to relocate operations, making an important and costly purchase, or just keeping up with your business’ day-to-day expenditures. Whatever your reason, do not fret, it’s possible to boost revenue and here’s how:
1. Raise Prices
Price raises are one of the most common ways to generate more revenue, however, they need to be done strategically. Try your best to avoid a dramatic increase in price as it will turn customers away because your products or services will become financially unrealistic for customers to purchase. When raising prices, the concept of supply and demand needs to be considered. It makes more sense to increase the cost of a product or service that has a higher demand. If the demand for an item is high, the price increase will generate more revenue for your company. Therefore, there a few ways you can go about raising prices. The first strategy is raising the price slightly on a product that your business has been selling successfully. The second way is advertising to your customers, via email that your prices will be going up soon. Make it known that they will only have a limited amount of time to purchase the product at a lower price. This can boost revenue because customers will always get sucked into buying a product if they think they’re getting a deal.
2. Increase Promotion Usage to Attract Additional Purchases
Promotions are any form of communicating your product to a potential customer to entice them to purchase your product or service. Simply putting your product or service out there through advertisement can entice people who have not heard of your product or service to surface and purchase it. Additionally, providing promotions such as discounts, sweepstakes or rewards will also entice new customers. You may be thinking, “Why would I promote if everyone that wants to try it has already tried it?” While this may be true, there are many shoppers who cannot afford or do not have enough interest in certain products or services at its current price and wait for to go on sale to purchase. You can communicate promotion through emails, social media, ads, flyers or on-site locations.
3. Increase the Average Transaction Size
The average transaction size is the average amount of products that are bought by each person during a transaction. Increasing the average amount of products your customers are purchasing directly increases revenue. The key to this is recommending and suggestion products for the customer to purchase. For example, if a clothing store is trying to raise their average transaction size, the business can offer clothing suggestions that would go with the ones the customer has already picked out. If the store is online, there can be product suggestions based on what the customer has already chosen, similar to Amazon’s “frequently bought together” section.
4. Increase the Frequency Of Transactions Per Customer
When a customer is buying more frequently, it an is extremely beneficial for your company’s revenue. An avenue to increase the number of transactions per customer is by setting up a points system. For example, a points system entails the following: when a customer buys a product they get “x” amount of points for that item. If the customer accumulates enough points over a certain amount of time, they get a reward such as a discount or free product. A points system can act as a motivation for customers to spend more money and therefore increase your revenue!
Whatever your reason is for increasing revenue, it’s possible when using these methods. You can choose one or combine multiple. As long as the methods mentioned above are used correctly and are carried out with thought and effort, you’ll be making more revenue in no time!