It’s universal – businesses want to bring in additional revenue. Besides increasing sales from existing customers, there are other ways to increase income. Most importantly, the strategies to increase revenue must be compatible with a company’s products, services, and target market(s). And, whatever a company takes on, it must be able to execute well, so plan for growth carefully.
1. Expand the market
Adding to the market for products or services may take several different forms: extending geographic area, adapting for additional target markets, or forming strategic alliances for complementary products or services.
- Extending geography – Do some research to see if the company’s product or service is offered in smaller cities outside the primary sales area. If it looks reasonable, weigh the costs of additional geography with revenue projections.
- Adapting to new target markets – If a company primarily serves consumers, is it reasonable to serve businesses also, or vice versa? For example, landscaping companies, or any repair business, may focus on businesses or residences, but these companies have all of the ‘tools’ in place to serve consumers and businesses.
- Forming strategic alliances – Consider the business’ product/service line to identify opportunities for non-competing complimentary businesses to sell to their customers. Joining together extends both companies’ reach.
2. Add a VIP revenue stream
A VIP revenue stream provides additional benefits to clients who want special treatment or more convenient access. Some customers are willing to pay a premium for the benefits, and such a revenue strategy brings benefit without a lot of additional expense. Examples of a VIP revenue stream include:
- A doctor’s office creates an annual fee for a select number patients who want benefits such as personal care, priority appointments, cell phone access. Those who don’t want or need extra attention still get medical service, but perhaps from a physician’s assistant or nurse practitioner. Charging $2,000/year for 250 patients would net an additional $500,000/year without dealing with insurance companies.
- A consultant has a couple of clients that want to have access to her 24/7. She sets up a special retainer of $1,500 per month for these clients and provides her cell number. Since they are busy CEOs, they only call a few times a year, but when they do, she drops everything to be of service. With four clients on retainer, it’s an extra $72K per year for a few days of work.
There are always a few customers who demand extraordinary service and are willing to pay extra for it. Capitalize on this need by adding such VIP offerings as:
- Increased access to the business owner
- Special service, perhaps via another phone line or checkout lane
- Invitation to exclusive events or sales or previews
- Free gift wrapping
- Free shipping
- Special gifts
- Complimentary access for friends and family
- A richer experience
- Birthday acknowledgement
3. Review/adjust pricing strategy
Markets are always changing. Compare competitor’s prices and offerings to see if it is necessary to lower or possibly raise prices. Another option is to consider bundling an offer to sell more products together. Pricing incentives and specials may also drive sales in a strategically-chosen direction. Remember, the goal is to drive sales and increase revenue, not reduce profit. Before lowering prices, run the numbers to determine the anticipated effect on sales and profitability.
4. Keep sales materials up-to-date
A company’s Website and collateral must be current to support the sales teams’ efforts. Collateral that makes it easy to make a decision facilitates sales by positioning the company as meeting customer needs. Consult with sales people and selected customers to get feedback about what’s working, what’s not working, and what is missing that needs to be included. If it’s not possible to update everything at once, determine which of the marketing materials will provide the greatest return on the investment.
The most successful companies keep a constant watch on business dynamics. Be ready to shift as necessary to keep growing and moving forward.