Revenue is vital to the health and survival of any business, but too many companies operate without enough revenue to handle the unexpected. How can your business maximize revenue quickly and easily? Find out in this blog post from Profit Solutions!
Raise Your Prices
Raising your prices is one of the easiest ways to maximize revenue, but many business owners are scared to do it because they’re afraid of driving away their existing customers. That is a concern, so before you follow through with a price increase there are a few questions you should ask yourself.
First, what are your competitors charging for comparable products or services? If they’re already charging more, it probably won’t hurt you to do the same. Second, do your customers really understand the value of what you’re offering? If they don’t, you may need to educate them on the real value of your product or service to justify a price increase.
Having said that, the fear of losing customers is not always a realistic one. Your customers may be perfectly happy to pay a little more for a product or service they really appreciate. If you do lose some customers, they may be low-value customers you can afford to do without.
Not only that, but a modest increase in price can translate into a major increase in profits, because any price increase goes straight to your bottom line. For instance, let’s say you’re currently charging $20 for a particular product, and $2 of that price is profit. If you raise the price of the product to $22, that’s only a 10% increase in price –but your profit is now $4, a 100% increase!
As you can see, raising your prices is one of the easiest things you can do to maximize revenue quickly.
Increase Your Conversion Rate
Conversion rate refers to the percentage of visitors who make a purchase, sign up for a program, or take whatever other action you want them to take when they visit your website. A higher conversion rate usually means more sales, which makes it a great way to maximize revenue. That’s why conversion rate optimization is so important! Here are a few of the steps you can take to increase your conversion rate and maximize revenue:
Improve Your Loading Speed: if your website loads too slowly and irritates your customers, many of them will simply click away and go look somewhere else. In fact, a website that loads just one second slower can expect a 7% lower conversion rate as a direct result!
Improve Your Page Design: your website needs to be easy to navigate, and customers need to be able to easily find whatever they’re looking for. Once they’ve found what they’re looking for, it needs to be easy for them to see how to buy it.
Add Engaging Content: your website should be built around engaging and informative content that tells customers what they want to know. The more your customers want to visit your website, the more opportunities you’ll have to convert them.
Include A Strong Call-to-Action: This is one of the most important aspects of your website when it comes to the conversion rate, which means that it’s also one of the most important if you want to maximize revenue. Seemingly small changes in your CTA can have a surprisingly big impact on the conversion rate, so it’s also an excellent subject for A/B testing.
Upsell and Cross-Sell
Upselling and cross-selling are similar concepts, and many people use these terms as if they were synonyms. There is a difference between them, though. Upselling is convincing a customer to buy a more expensive version of the same product or service, while cross-selling is convincing them to add other products or services to their original purchase. For example, if you sell a customer a luxury car when they came in looking for the basic model, that’s upselling. If you sell them a set of off-road tires along with their car purchase, that’s cross-selling.
Upselling and cross-selling are both crucial if you want to maximize revenue. Why? Because 70-95% of all sales revenue comes from either upselling or cross-selling! Your sales team is 200-1400% more likely to close a sale with an existing customer than with a new prospect, and the cost of earning one dollar from a new prospect is 68% higher than the cost of earning a dollar from an existing customer. Existing customers are easier to close, they buy more, and they produce far more revenue than new prospects! If your sales team isn’t trained in upselling and cross-selling strategies, you need to remedy that as soon as possible.
Switch to Remote Work
When you hear the word “revenue,” you probably think about the money you have coming in… but you can also maximize revenue by cutting down on the money you have going out! One easy way to do this is switch your company to a remote work model as much as possible.
Lower overhead is the most obvious reason why. You don’t need to rent office space or pay for utilities for a remote worker, resulting in big savings. According to a study by Global Workplace Analytics, allowing employees to work from home just half of the time saves employers $11,000 per year for every full-time employee.
That isn’t the only benefit, though. Remote workers are also about 13% more productive than employees who work in an office, a significant difference in revenue over the course of a year. Switching to a remote workforce can lower your expenses and help you maximize revenue.
Use Contractors Whenever You Can
Not every job can be done by contractors, just as not every job can be done remotely. However, many tasks are better handled by contractors than by full-time employees. As a general rule, core company functions are often better performed by employees, but anything else should be done by contractors whenever possible. This will save you money, because contractors are generally less expensive than employees even when they earn more on an hourly basis. Why? Because you aren’t responsible for their taxes, healthcare, vacation time, or other benefits, and because you don’t have to employ them when you don’t need them. Just like switching your company to remote work, hiring contractors can maximize revenue by decreasing your expenses!