Selling is the most important activity in which a business can participate. They allow businesses to hire people, purchase equipment, and manufacture products or provide services. Without sales, there is no future for a business.
The poor economy of recent years has hit small businesses particularly hard. Whether you are one of the businesses involved or just want to increase your sales, the following strategies for increasing revenue are effective in most situations. However, your decision to implement any of them should be based on several factors:
- The compatibility of the strategy with your products.
Your understanding of the motivations of buyers when purchasing your products
- The willingness and ability of your business to effectively implement the strategy.
- So the competition will copy your strategy and dilute the impact of the change.
- Your expectations on the future economy and its effects on your business.
While each of the strategies can be implemented on their own, you can implement more than one at the same time to achieve greater impact on revenue.
Develop your market
Expand your existing customer base with new products, new geographies and additional sales resources:
1. Add complementary services to existing products
Adding complementary services or products can help you gain new customers, as well as keep existing ones. For example, a lawn mowing or landscaping company might add pool maintenance for a small additional cost. Neither service is technically complex or difficult to provide, both require regular home visits, and each is a burden on the owner.
Likewise, a home repair business can easily serve the commercial market with the same teams and equipment that it uses in its normal residential business. Future maintenance contracts or extended warranties can be sold with almost any capital equipment. Review your competitor’s products for ideas. If someone, even a competitor, has a “plus” that attracts customers, copy it.
2. Expand the geographic area of the market
Many small businesses limit their marketing and sales efforts to the immediate area surrounding the central location of their business. A Dallas playground equipment dealer found that none of his competitors had business in several suburbs surrounding the city, likely because there were no dealers in those communities. The additional cost to cover the larger market was minimal and more than doubled potential sales. Do not assume that another market is served without research.
3. Enter into cooperative sales agreements
Contact companies that sell a complementary product or service asking them to sell their products as well. For example, computer hardware companies often sell software, which makes it easier to sell their hardware. Additionally, pet food distributors carry vitamins and pet furniture, and home improvement companies also sell landscaping.
Many companies actively seek out complementary products because they add very little to sales and marketing expenses; it’s just a matter of finding the right partner. Adding additional vendors at no additional cost is a sure hit for sales.
Perfect your pricing strategy
Price is the most important factor in the decision to buy a product or service. A low price can be a “good deal” or bad quality in the buyer’s mind.
Before implementing a pricing strategy, know what your customers think about your product so that a price change encourages the market behavior you want. Always think of your prices as “temporary” and adjust them according to the market and competitive circumstances.
4. Increase or decrease prices
Product prices are constantly changing, so you shouldn’t hesitate to adjust your prices to meet your goals or the market situation. An immediate price increase will bring additional revenue and profit to the business if the price increase does not negatively impact sales. Lowering prices will stimulate more sales and take market share away from other suppliers. Knowing how your products compare to similar products from a buyers’ perspective, as well as the prices of competing products, will allow you to better position your prices in the market.
Price changes can “shake things up”, so you should be especially sensitive to the reaction of your customers and prospects when new prices come into effect. If the feedback is not positive, you can make further adjustments, including reverting to previous prices.
You can also consider increasing your prices regularly. Consumers rarely react to small price increases and often neglect them. Although a small price increase may not seem significant compared to the total price, the impact of the profit increase is magnified as the increase will pass directly to the bottom line.
5. Group products
When I was young, I sold women’s shoes at a shoe store in Austin. The shoes were intended for the mass market and came at a price that appealed to women who wanted a pretty look without the cost of a designer label. The store also carried bags and hats designed to complement each pair of shoes.
Store management often “packed” the shoes, bag and hat together for 25% less than products purchased separately. The result: more than half of shoe sales were combined with a higher overall profit margin. If you are selling products that naturally go together or are used for the same task or at the same time, consider selling them as a package.
6. Add, reduce or eliminate shipping and handling charges
Instead of increasing the price of a product, consider adding shipping and handling charges. The net effect on income is the same while avoiding the buyer’s reaction to a price increase. If you currently charge shipping and handling charges, consider reducing or eliminating the charge for a specific period to drive sales.
7. Offer special discounts
Discounts, properly marketed, create a special buying opportunity in the minds of consumers, often prompting them to take action. Discounts can be applied to limited products such as a single manufacturer brand, a limited category such as school supplies, or all products in a store-wide sale.
In fact, you can create a sales environment for almost any reason:
- Quantity discount: when two or more of the same product are purchased at the same time
- Bundling discount: when two or more different products are purchased at the same time
- Seasonal discount: when products are purchased within a specific period of time
- Conditional discount: when the products purchased are used or repackaged
- Discount removed: when the products purchased are “stripped” of one or more features
8. Offer a refund
A discount is a deferred discount, which issues a percentage of the cash price after the product is purchased. Popular with consumers, they are often associated with the sale of new cars. Refunds typically have reimbursement rates of less than 50%, according to John Courville, professor of marketing at Harvard Business School. This means that the advertised discount can be effective in driving additional sales, while the lower reimbursement rate lowers your costs.
On the other hand, not quickly exchanging a refund can lead to poor customer relationships. Due to the increase in complaints, some companies have discontinued rebate programs.
9. Participate in coupon programs
Distributed in newspapers and magazines, coupons have long been an effective way to advertise products and increase sales. The Internet introduced electronic coupons and further reduced distribution costs. Daily deal websites like Groupon and LivingSocial aggressively seek out companies willing to offer their products at a discount in return for exposure to their vast coupon user markets. Local coupon aggregators combine offers from different companies on books, which are then sold or given away to potential buyers. Research the market and find a coupon issuer for your products.
Revitalize the sales channel
If you want to increase sales, you have to generate enthusiasm and a reason to buy. There are a number of tips you can follow to change current market dynamics and rekindle enthusiasm for your products:
10. Strengthen your sales guarantee
Business owners often overlook the importance of sales guarantees (brochures, presentations, product data sheets, images), although the sole purpose of warranties is to make the sales effort easier and more efficient. As a result, the information presented to potential buyers becomes outdated, inaccurate and misleading. Websites often suffer from the same discomfort and visitors decline.
Your sales guarantee, including your website, is a reflection of your business. A vibrant and vividly colored document with pictures and images attracts attention and generates enthusiasm in its content; Boring and boring materials are often thrown away without a second thought.
Go through your sales materials, item by item, to see if they convey the image and message you want to present to your customers:
- Do they include all of your products and latest innovations?
- Do they adequately represent the benefits of your products by linking features to benefits?
- Do they convey a sense of urgency with easy buying instructions?
If your brochures, presentations, product sheets, images or website don’t present simple and clear information that will inspire your potential customers to take action, it’s time to rethink it.
11. Encourage your business partners
Revise your commission structure to “shake up” the sales force. Most commission programs are staggered in which the seller receives a lower commission rate as their sales increase. If you use this approach, change the incentive ratio from high to low making the higher commissions apply to the higher sales volume.
For example, instead of paying the highest commission percentage at the bottom tier, reward top sellers with higher commissions at the top tier. Such a compensation plan aligns the interests of the company and the seller. The promise of even greater income as sales increase is a powerful incentive to make more sales.
For a temporary increase in income, create a sales competition in which sellers compete for cash prize, luxury travel, or any other desired perk if they reach a target level of sales or new accounts. If you are successful, follow one contest after another with a different prize each time.
12. Renewing old relationships
It is easier to sell to an old customer than to find a new one. Products already purchased wear out, break or become obsolete. Develop a marketing program to reach old customers and prospects, and communicate with them regularly about your business and its products. Ask your past clients for references and written references. Make them feel that they are a valuable part of your success.
13. Accept credit cards
Accepting credit cards for payment is a benefit to your potential customers and a proven method of generating sales quickly. If you don’t currently accept credit cards, go to your local bank or financial institution and create an account immediately. The initial installation costs will be recouped quickly and the small handling charges can be factored into your retail price.
Find out if your customers can have other sources of credit. Franchises, for example, can sometimes be funded through programs of the United States Small Business Administration. Financial companies and manufacturers can provide funds for the purchase of larger real estate or fixed assets. There are many independent sources of credit available to buyers; Your role as a seller is to identify these sources and facilitate the presentation between your buyer and the lender.
14. Institute a reserve program
A layaway program, another way to provide credit to customers, is a way to allow your customers to pay on time without incurring financial risk. Layaway was a popular retail strategy before the widespread growth of credit cards, and it seems to be picking up steam as consumers resist borrowing.
As a seller, your only concern if you implement this program is to ensure that the layaway product is not perishable or unique, which could limit the number of new buyers if the original buyer does not respect his purchase.
15. Add subscription sales
Newspapers, magazines and other commonly used products are prepaid in exchange for a series of future deliveries of the product. In addition to securing future sales for the business, an underwriting system has the advantage of generating cash before incurring significant expenses. If you have a product or service that your customers buy regularly, consider setting up a subscription program.
Many business theorists claim that a business is growing or declining. Successful businesses continually reinvent themselves by listening to their customers and adapting their products, sales strategies and processes to meet an ever-changing paradigm. Each of these strategies are powerful sources of income in the right circumstances, but the optimal options for your business will depend on your understanding and knowledge of the customers you serve.
What other methods can you suggest to generate income in your business?