8 Powerful Growth Strategies to Boost Revenue for Your Small Business
Armed with a plan, passion, and capital, you took the initiative to start your own business. However, growing a small business can present many challenges. You need to worry about your employees. Plus, you need to find ways to increase profits to keep the business afloat. To achieve this, it takes a lot of determination and perseverance, combined with organizational and management skills.
Unfortunately, the economy has been on a downward trend in recent years. It's becoming hard to generate enough sales, particularly for small businesses. According to a 2019 survey on small businesses by 12 Federal Reserve banks, only a small percentage of small businesses reported increased revenues in 2018. Moreover, a whopping 73 percent reported that due to high operating costs, they didn’t manage to get any profits.
As you are very well aware, sales are the core activity any company, big or small, can engage in. Without sales, your business has no future. So, boosting sales is the key denominator in business sustenance. Now, how do you achieve that? Below, we discuss 13 growth strategies to boost sales and profits.
How to Increase Revenue for Your Small Business
1. Drop Unprofitable Products and Services
Your business won't generate income if you keep selling unprofitable products or services. Choose what will offer the highest gross profit margin. You can start by reviewing the sales of your products or services, and identify the most profitable.
As for the unprofitable services or products, you need to determine if you’ll drop them completely or review what can be improved.
2. Focus on Existing Customers
Statistics show that “attracting a new customer costs five times as much as keeping an existing one.” Additionally, it's estimated that, globally, the average value of a lost customer is $243. That's why your existing customers need to be treated as the most valuable investment.
Spending money on existing customers has a better return on investment (ROI). However, this doesn’t mean that you shouldn't reach out to new clients. It means never undervalue your current customers in your marketing plan.
Remember, your current customer base already knows you. They already trust you and buy from you. By increasing engagement with existing customers, you’ll boost sales and increase profits. It's also a fact that poor customer service leads to the loss of clients.
To engage with repeat customers:
- Maintain a consistent line of communication.
- Update them on new launches through website updates and email campaigns.
- Find out if there exists cross-sell and upsell opportunities.
- Develop customer appreciation strategies, like freebies, special discounts, loyalty programs, and more. This will keep your customers satisfied and give them a reason to keep making purchases. That’s what contributes to increased profits.
3. Target New Customers
New leads can help boost sales and grow your business. As much as your current customer base is important, finding new customers should always be on top of your agendas. Undoubtedly, this can be an expensive yet necessary approach if you want to increase the number of clients.
You can acquire new customers by intensifying your marketing, increasing your geographical reach, and developing strategic partnerships. You can also motivate existing clients to initiate referrals for you. Word of mouth is still a powerful form of advertising.
4. Showcase Your Industry Expertise
Consumers always look for the best products and services they can afford. Showing off your industry expertise puts you in an advantageous position whenever a customer is looking for a good or service. You can send out newsletters with information relevant to your industry. Doing so will let you address questions or concerns that your audience may have, consequently keeping them engaged with your business. It's also a great idea to create blog posts on relevant topics regularly.
5. Review Your Pricing Strategy
Price is the topmost important factor that influences a customer’s decision to make a purchase. Remember that a low price might register as a bargain or low quality in the customer’s mind. Therefore, be wise when devising and implementing your pricing strategies.
First, you need to find out how your customers feel about your product. This way, you can predict their market behavior in case of a price change. Raising prices can be a sensitive issue, so you should be particularly careful if you expect a negative reaction.
You could also consider regularly increasing your prices. Consumers are more likely to overlook a slight price increase compared to a full increase. On the business side, a slight price increase can improve your profits.
6. Ecommerce Is Your Friend
If you’ve been following eCommerce trends, you know that a huge percentage of customers prefer shopping online for one main reason – convenience. Digital marketing is evolving every day. Now, as the competition for clientele heightens, so do the strategies to reach consumers wherever they are.
If you don’t have a website yet, you're neglecting a vast market segment that could bring you massive amounts of revenue. It's high time you consider taking your business online. Today, it's easier than ever to establish, enhance, and grow your online store with eCommerce marketing automation.
Apart from developing a professional website, you need to optimize your online persona. Be active on social media, start a blog, and advertise your products and services. Make it your mission to stay visible and connected to your audience to keep up with the competition.
7. Review Your Sales Funnel
Ask yourself the following:
Are there areas of your sales process that you can improve?
Are your strategies of catching new leads, bringing them onboard, and closing sales working?
To increase sales, you have to generate a reason to buy. You have to renew the excitement and enthusiasm for your product. There are several ways to do that:
Renew Old Relationships
It's easier to sell to an existing client than to a new one. That’s why it's important to engage old customers by communicating with them regularly about new products and services. Since you’ve already established trust with your current customers, ask for referrals and written preferences.
A report by Nielsen shows that 83 percent of customers say that they listen to recommendations from people they know and trust. This shows how powerful consumer referrals can be for the success of your business. However, this can only happen if your current customers are satisfied with your products and services.
So, your primary goal is to make clients feel valued, like a part of the business, and direct contributors to the success of your business.
Offer Coupons and Discounts
Making profit may be your main objective, but your approach matters. Sometimes, making less on one sale may help you make more on future sales. Take offering coupons to new customers, for instance. While this will slightly reduce your profits, it's an effective way of pushing new clients to buy.
Giving discounts to new and existing customers every once in a while can also drive more revenue. Your clients will more likely advertise your business to friends simply because of the discounts and coupon incentives.
Incentivize Your Sales Force
Like we said, sales drives profits. However, you have to approach your sales strategies carefully to avoid increasing costs that in the end, will reduce your profits. With that in mind, you need to find ways to boost employee motivation.
You can start by revising your commission structure.
Create a compensation plan that pays the highest percentage commission to the salespeople with the greatest sales volume. The promise of a higher income with more sales is a powerful way to incentivize your sales team.
Additionally, you can create a sales contest to temporarily boost revenues. For example, you can set cash prizes, vacations, or any other desirable rewards for reaching the targeted level of sales or new customer acquisition. If the contest is successful, make it a trend every few months.
Customers hate complications, and if they don’t like your payment methods, closing sales can be a hurdle. Accepting credit cards in your business is sure to make things easier for your customers.
If you don’t offer the service yet, consider visiting your bank and setting up the account immediately. The initial cost may be high but recoverable if you manage to increase sales.
Consider Adding a Subscription Program
If you offer a product or service that your customers purchase regularly, consider creating a subscription system. In addition to normal sales, a subscription service will generate cash before you incur a significant expense.
Additionally, adding complementary products or services can increase sales without consuming extra overhead costs. Customers usually associate bundling with savings. Even if the savings are small for the client, it can sway their purchasing decision.
8. Streamline Your Business
Managing a business, no matter how small, is no easy fit. There are so many areas that need your focus and attention, that it can sometimes feel overwhelming. Even so, it's not impossible. It all starts with ensuring that you have an efficient, effective, and reliable workforce.
Whether you're just starting out or are already established, find an automation system that will streamline your business operations. Take Traqq, an employee monitoring software, as an example. It allows you to track worker activities and monitor their engagement with client projects. The tool lets you measure their productivity and record attendance.
Traqq also doubles as a time tracker that collects accurate records of time spent on projects. This information is crucial if you want to calculate the overall costs of a project and compare it to what the project brings in. You can then determine if the project is worth investing in.
Additionally, by keeping track of employee productivity levels, you can gauge how long a project can take and find if there are areas for improvement. This program also helps to distribute workloads fairly, according to each person’s capabilities.
Business automation simplifies your managerial responsibilities, allowing you to focus your energy on business growth and sustainability.
To run a successful small business, you need to understand what motivates your customers to buy. Invest time to know their concerns, fears, and challenges, and use this information to meet your clients’ needs.
On top of that, seek to establish a personal connection with your customers. Ask questions to find out the inefficiencies in your business. Know if they are satisfied with the quality of products and the level of services that you're offering. Your main objective is to keep your customers happy and satisfied. These questions will help you know what you're doing wrong and what adjustments need to be made. In the end, you’ll find more ways to increase profits for your business.