3 Ways To Increase Your Business Revenue Right Now

by William Powell Writer/Educator

Sales are the backbone of any business, while revenue makes the venture sustainable and grow. Today, many business models can help you scale revenue. There is no right or wrong approach; it depends on your forecasting, budgeting, and execution. With that said, there are many pillars that you can focus on as your blueprint to increase your business revenue, including marketing and market expansion.

Here are the three most important focuses — and some steps you can take today to drive more revenue.

  1. Adjust Your Pricing 

Pricing is perhaps the biggest driving force in determining the revenue of a business. Many businesses make the mistake of determining their price model from the market. If they sell theirs for $100, I’ll sell mine for $99.99. 

Yet this can break your business. You do not know what factors your competitors consider before placing their price, and they may have volume, efficiency, or name recognition that you lack. While your competitor's pricing should be factored in, it should not be the driving force behind your pricing. 

To determine how to price your product or service, consider the variable costs of the product or service. Look at how much it costs to purchase your inventory, transportation, warehouse charges, and other fixed fees. The cumulative cost of these expenditures should act as a baseline. Add your profit markup according to your goal and your potential customer base. Are you looking to provide luxury items, low-cost alternatives, or somewhere in between?   

Pricing by itself can be used as a marketing tool. For example, if you target customers with expensive tastes, high prices can offer a sense of prestige. Louis Vuitton and other luxury fashion brands would rather burn or dispose of their unsold inventory than sell it at a lower price, as it would dilute the brand. 

Conversely, if you price your products low, you may get many customers resulting in higher revenue. Again, your pricing should be determined by who you are targeting and the type of goods or services you offer. 

Examples Of Businesses That Use Pricing To A Significant Effect

Walmart: The company was founded with one goal — to offer the lowest rates in the market. Though they have been accused of predatory pricing, where they price their competitors out of the market, there are few companies that are as successful as they are with increasing revenue using a pricing model. They believe in their pricing model so much that Walmart pulled out of Germany in 2006 when they were ordered to increase their prices in the country. 

Costco: Costco uses pricing in very interesting ways. Sometimes pricing selected items low is not bad, even if it loses your company money. This strategy is called The Loss Leaders Strategy, where a company deliberately loses money on selected items to drive sales to its other products. Costco sells its rotisserie chicken at ridiculously low prices. It is estimated they lose between $30 to $40 million from selling the rotisserie chicken. 

However, these losses do not seem to bother them because of how they drive sales. They do this by placing their rotisserie chicken at the back of their stores. Any time their customers walk in to buy the chicken, they have to pass by all the other isles, increasing the odds of them making additional purchases. 

However, Costco also displays expensive TVs at the front of their stores. They know very few people will buy them; however, they understand that once their customers see the TV prices, everything in the store will appear cheaper, increasing the odds of making a sale. 

What You Can Do Right Now

Run some experiments. Try A/B testing. Offer a lower price to one segment of your audience or for a limited duration, then try offering a more expensive premium product. See what performs well and adjust your pricing strategy accordingly.

  1. Increase The Bottomline

Many people often lump pricing in as part of increasing the bottom line. Though you can increase the bottom line by adjusting your pricing, it is not the only way to improve it. 

One of the best ways companies have used to increase their bottom line, especially after the COVID pandemic, is by working remotely and reducing the need for expensive office spaces. Others have opted to remove inventory that does not do as well while focusing on their most popular products. As a result, they can cut production and storage costs. 

Dropshipping is an interesting concept that small and large companies are exploring, where they do not store or manufacture anything in their own facilities. Instead, when an order is placed, the distributor ships the items directly to your customer’s doorstep. You do not need a warehouse, additional personnel, or offices.

What You Can Do Right Now

Ask a third party or unbiased observer to help you identify areas to cut costs. If you’re a solo entrepreneur, perhaps there are subscriptions you could cancel or daily expenses to scale back on. If you run a larger business, consider ways to downsize your space or simplify your product offerings.

Sometimes operating expenses are hiding in plain sight. For example, you could switch to a new payment processor that has lower credit card processing fees. This small action could save hundreds or thousands of dollars each month.

  1. Expand Customer Service

In most cases, customers remember the service they received more than the item that they purchased. Building a customer-centric company is a great way to retain customers. For one, it is cheaper and easier to market products to people who are already customers. By reducing your cost of acquisition, you can, in turn, increase your revenue. Repeat customers are also more likely to buy more products or services, increasing the transaction size. 

Examples Of Businesses That Are Customer-Centric In Their Approach

JetBlue: Most airlines are known for their poor customer service. Therefore, it is refreshing to see an airline offering donuts and water to customers waiting to check in. JetBlue is also known for being creative with its inflight entertainment, where they play trivia games with the customers. 

TD Bank: Banks also have a reputation for being snobby with their customers. TD Bank focuses on customer satisfaction by staying open 7 days a week. You will always be greeted warmly when you walk through the doors, and they even offer treats for your dog. 

What You Can Do Right Now

If you don’t already have a customer loyalty program, now is the time to implement one. Consider a referral program, too. Your most satisfied customers will also be your best evangelists. Their word-of-mouth recommendations will beat your own advertising.

Closing Thoughts

As you can see, you can use many ways and techniques to increase your revenue. With just a few small changes today, you can see great results tomorrow.

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About William Powell Junior   Writer/Educator

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Joined APSense since, July 14th, 2022, From Jacksonville, United States.

Created on Apr 25th 2023 14:27. Viewed 193 times.


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