Every business wants to generate more revenue. More (and hopefully better) marketing is usually the solution to that, at least that is how most business owners see it.
What business owners don't see is the mountain of revenue that goes untapped each year in their business. Right in front of them, all around them, are opportunities to generate more revenue without gaining a single new customer or spending a dollar on additional marketing.
So why is the focus almost always on finding new business instead of maximizing the business they already have? In my opinion, it comes down to the complexity of the solution.
More marketing usually means spending some money on advertising to generate interest and leads. Pretty straightforward, spend some money and get some business. Yes, a super simple example but you get the point….it doesn't require a ton of planning/effort on the part of the business owner, only some money in most cases.
On the other hand, generating more revenue from missed opportunities in your business usually requires more planning/effort than money. Figuring out how to generate more revenue with existing opportunities requires evaluation, strategy, planning, and execution……who has time for that? Many internal opportunities lie in operational inefficiencies, lack of training and lack of managerial oversight. All things that pretty much place the responsibility and blame on the business owner.
Much easier to just spend more money on advertising than to confront these complex issues.
So while every business needs to generate a continual stream of new business in order to stay healthy, they also need to look at their existing business and figure out how to generate more revenue from the leads and customers they already have.
Below are some common places where businesses continually leave money on the table.
Your current customers are your most important source of additional revenue. You have an existing relationship with these people and they have already proven that they are willing to spend money on your business. You have already spent the time and money to acquire them, so why not make the most of it?
Look at your current customers and see what additional products/services you can offer them. Many of your current customers may have no idea what else you offer, it is your job to introduce them to these other offerings. If you sell a one-time product, like a home generator or HVAC system, you can offer a yearly maintenance contract to service it each year. Look at your current customer list and see who you can offer this subscription service to.
If you sell replenishable products, do you know when each of your customers should be running out of product? Timely reminders and discounts can entice customers to purchase more frequently from you. If they currently buy from you twice a year on average, imagine what your business would look like if you could get your customers to buy three times a year?
From additional sales to more referrals, examine your current customer database to find opportunities to grow your revenue.
Are you making the most of each sale? Why do you think supermarkets are full of candy, magazines, beverages and small ticket items in each checkout lane? Because these are impulse purchases that people make that they probably wouldn't have if they were sitting there in front of them. Better yet, train your employees (or build into your checkout process if e-commerce), to offer complementary products/services at the point of sale.
If you sell swimming pools, offer a discounted pool chemical package at the time of purchase, they will need it anyway. You can also offer upgraded filters, pumps, heaters, etc at the time of purchase. A customer may not even know these upgrades are available and won't know to ask unless you offer it to them. If you are a bakery, remind people that it's cheaper to buy by the dozen or offer a free pastry if they purchase a dozen, it can help push someone only wanting 6 pastries into buying 12.
Think about how you can bundle additional products/services at the point of sale to increase your average ticket size. The easiest time to sell to someone is when they have made or are about to make a purchase. The wallet is out, their wallet is out, make the most of it because you may never see it again.
I had a client that used to continually say that not getting enough leads was the one big bottleneck in their business. They would say they had a great sales team, support staff and everything needed to grow their business….except they did not have enough leads. Since transactions happened offline, it was difficult to see conversion numbers but I was told they consistently had a 30-35% close rate once they scheduled an appointment. That's a pretty impressive close rate considering they were selling services that cost between $8-30K.
Over 3 years we doubled the amount of leads they received each year, but the revenue was barely growing. So we instituted a new CRM/Marketing Automation package to closely track every lead that came in. And guess what we learned? Conversions are actually sitting around 7% and a good chunk of their yearly sales are coming from old, existing referral business where the sales were pretty much automatic. So much for a well-oiled machine.
With a dismal conversion rate, it makes no sense to spend more on marketing until you can fix your conversion issues. It's like having a shower with very little water pressure due to a leaking pipe and trying to fix it by cranking up the water pressure. Yeah, you had a nice shower but flooded your basement in the process.
Examine your conversions (if you use your gut, you are 100% always wrong) and your sales process and see where the leaks are. Increasing your conversion rate by only a few percentage points can have a dramatic impact on your bottom line. But like I said earlier, it's easier to spend more money on advertising than it is to repair a broken sales process.
Just like current customers, past customers can be a gold mine of additional revenue waiting for you to take it. Once people stop doing business with you, it's easy to forget about them or to place them on some generic newsletter until they finally mark you as a spammer.
It's hard work, but maintaining relationships with past customers can keep the door open to new business. People stop doing business with you for a variety of reasons. Maybe they no longer needed your services, or finances got in the way, or maybe they decided to try a competitor, the point is that they purchased from you once and some of them will purchase again.
Maybe you are offering new products/services from when they were your customer. Maybe their circumstances have changed and they are now ready to start buying from you again. You will never know unless you re-open the lines of communications again.
I have a client who has a corporate training business that wanted figure out how to generate new business as it was in decline ever since the recession hit in 2008. We went through his business and discovered he had run over 1500 corporate training events over the past 20 years. When I asked him what he did to stay in touch with these past customers and to get repeat gigs, you know what his answer was? Nothing. Yes, he spent all of his energy trying to figure out how to get new business and completely ignored 20 years of past customers. Shocking but true and there are many businesses out there that do the exact same thing.
Even if they don't need you anymore, maintaining a good relationship will keep the door open for referrals from them in the future. Go through and find some of your best past customers and start building a relationship with them again.
Do you know what your customers want? Have you ever asked them? For internet marketers, the most successful strategy going is to build a huge audience (leads for their online business) and then just ask them what they want. Once the audience tells them, they go out and make it for them and make lots of money in the process. They actually do the exact opposite of every other business, they build a relationship with their audience and then sell them whatever they are looking to buy.
Maybe you need to offer additional products or services to your business. Maybe you need to bundle your products/services or the opposite, breaking your product/service into smaller parcels for your customers. Maybe you need to do all of this.
Snack packs came about because some people didn't want to buy a giant pack of potato chips, they only wanted enough for a single serving. Costco came about because families wanted to buy in larger quantities (at a cheaper price) than they could get at the supermarket. Online tax services well audit protection services as an add-on because people who do their own taxes are afraid of the prospect of having to deal with the IRS on their own if they get audited.
Look at your customers and look at your current offerings and see where there is potential to offer them something new, something old just packaged and presented differently.
Go find that revenue
So now you have a few ideas where you can increase revenues without needing new customers or paying for more advertising. It takes more time and effort, but cashing in on these opportunities can have a huge impact on the financial health of your business.
Latest posts by Gary (see all)
- 20 Minute Google Adwords Account Audit Checklist - May 22, 2018
- How To Dominate The Local Search Results in Google - March 18, 2018
- 10 Things That Can Make Your Life as a Small Business Owner Better - January 31, 2018