Sales are the single most important activity in which a business can engage. They allow companies to hire people, buy equipment, and manufacture products or deliver services. Without sales, there is no future for any business.
The economic challenges in recent years have hit small businesses particularly hard but large companies have also been struggling. Whether you’re among the affected companies or just want to boost your sales (and therefore revenue), use the following strategies to raise revenue.
Be aware though that your decision to implement any of them should be based upon the following factors:
- The compatibility of the strategy with your particular products
- Your understanding of the buyers’ motives when they purchase your products
- Your company’s willingness and capability to effectively implement the strategy
- Whether competitors will copy your strategy and dilute the impact of the change
- Your expectations of the future economy and its effects upon your business
Each of these strategies can be implemented alone but you could implement several of them simultaneously to boost revenue.
Expand Your Market
Augment your existing client base with new products, new geographic territories, and additional sales resources.
Have you clearly identified your target market? The more specific you can be the more easily you will reach them. Advertising will help but it's only effective when done in a very targeted way.
Customer expansion can be accomplished by taking your business to the internet. It’s easy to market customers and provide for them online. Competing in this marketplace can be tough because of the amount of competition but if your products are clearly differentiated it will make it easier.
Extend the Geographic Market Area
Some businesses are able to grow and prosper by outperforming their competition in a local niche market, or within a specific region. However, the majority of businesses look to expand into new markets to grow their business and one of the most common ways of doing that is to expand geographically.
Whatever your business plan is, when you are expanding your market into another geographic area move carefully. Before you expand:
- Develop guidelines, standards, and processes to make it easy to get started no matter where that new location is.
- Consider the impact the expansion into a new geographic area will have on your personnel and other resources.
- Assess how the geographic expansion will affect your revenues and your profit margin. Earning more revenue does not always translate to more profits. You may incur significantly higher operating costs, which could eat up additional revenues that were generated.
- Do your market research for the new location and make sure you do competitive analysis as well. You need to know if you can effectively compete in the new market
- You can grow your business in a new geographic area simply by targeting customers in that area. It doesn't always mean a physical presence in that location.
Enter Into Cooperative Sales Agreements
Contact companies that sell a complementary product or service with a request to sell your products also. For example, computer hardware companies often sell software, which facilitates the sale of their hardware. A further example would be pet food distributors offering proprietary vitamins and pet accessories
Many companies actively seek complementary products as they add very little to marketing and sales expenses – it is just a matter of finding the right partner. This is a way of adding additional salespeople without the expense of salaries.
Optimise Your Pricing Strategy
Before implementing any pricing strategy, know how your customers feel about your product so that a change in price encourages the market behaviour you want. Always consider your prices “temporary” and adjust them to meet the market and competitive circumstances.
In order to maximise your revenue and stay ahead of the competition you know you have to price at the optimum level. What your business needs is an accurate price management system and the modern, accurate and most efficient solution to all your pricing demands is to invest in a pricing software solution.
Things change so fast these days and if you're in a competitive marketplace, staying one step ahead of the competition is crucial. This is what pricing software is all about – to safely and speedily manage all your pricing data, allowing you to focus on what matters most to your business, maximising profits.
Raise or Lower Prices
The prices of products constantly change, so you should not be reluctant to adjust your prices to meet your objectives or the market situation. An immediate price increase will bring additional revenues and profits to your company if the price increase doesn’t negatively impact sales.
A price reduction will stimulate more sales and take market share away from other suppliers. Knowing how your products compare with similar products from the buyers’ viewpoint, as well as the prices of competitive products, will allow you to best position your prices in the marketplace.
Changing prices may well “shake things up,” so you should be particularly sensitive to the reaction of your current and potential customers as the new prices are implemented. If the reaction is not positive, you can make further adjustments, including a return to the old prices.
You may also consider regularly raising your prices. Consumers rarely react to small price increases and often overlook them. While a small increase in price may not seem significant when compared to the full price, the impact of the increase on profits is magnified since the increase will flow directly to the bottom line.
Offer Special Discounts
Discounts, properly marketed, create a special buying opportunity in the consumer's mind, often spurring them to make a purchase – and increasing your revenues at the same time. The discounts can be applied to limited products, such as a single manufacturer’s brand, a limited category like school supplies, or all products in a store-wide sale.
In fact, you can create a sale environment for almost any reason:
- Quantity discount: when two or more of the same product are purchased at the same time
- “Bundling”: when two or more different products are purchased at the same time
- Seasonal discount: when products are bought within a specific time-frame
- Conditional discount: when the products purchased are used or reconditioned
- Stripped discount: when the products purchased are “stripped” of one or more features
If completed carefully, expanding your market and extending into new geographical territories will definitely have a positive impact on your revenues. However, few decisions have as large an impact on the success of your business as setting the right product prices.
Your prices influence how many customers actually purchase your products, the types of customers you attract - and sales revenue. This all has a direct effect on your profit margins.
Every pricing decision you make should offer a win-win outcome where your customers get good value for their money and your business makes a healthy profit. So, start a review of your pricing strategy without delay.
Marketing: Concepts and Strategies, Lyndon Simkin and Sally Dibb, 2016
Pricing for Profit: How to Develop a Powerful Pricing Strategy for Your Business, Peter Hill 2013
So Why Do I Care? Management, Marketing and Innovation Insights for a Changing World, Tom Coughlan, 2006