5 Simple Ways To Increase Revenue With Little Money

If you want to grow your business, you need to increase your revenue.

Revenue growth is a metric used to calculate the amount of money your company makes over a pre-determined time compared to the previous, identical amount of time.

Understanding how your customers are responding to different marketing and sales campaigns can help you decide how to best increase your revenue.

In this article, we talk about revenue growth, how to calculate revenue, and how you can increase revenue for your organization.

Table of Contents

What Is Revenue?

Revenue includes income from all sources, including sales, royalties, interests, fees, and more.

People often confuse revenue with sales and earnings. Sales are the amount of money made from selling your products, including all expenses.

And earnings refers to expenses deducted from revenue.

How to Calculate Revenue Growth

The formula for calculating revenue growth is pretty simple.

(Current Period Revenue – Previous Period Revenue) / Previous Period Revenue

Let’s say, XYZ company earned revenue of $100,000 in the month of December 2021.

And for January 2021, the company revenue stood at $150,000.

So their revenue growth rate for month-on-month earnings is:

{($150,000 – $100,000) / $100,000} * 100

This leads to ($50,000 / $1,00,000) * 100 = 50%

5 Simple Ways to Increase Revenue

In simple terms, revenue growth is seen as a strategy to help a company achieve its short, and long-term revenue goals.

Depending on your company’s needs, your strategy might be different.

But in the end, all your marketing, sales, and customer experience needs to be aligned to achieve the end goal.

Let’s look at how you can increase revenue.

#1. Increase the number of customers

This strategy is pretty simple: the more the customers, the more the revenue.

Here are different ways you can increase the number of customers.

Expand your geographical reach

Most of the time, small businesses restrict themselves to an immediate location surrounding their business, assuming the marketing cost to be high.

But with proper research and understanding of how your competitors are spread, you can run strategic marketing campaigns.

Develop opportunities to expand your customer reach in a phased manner – address the additional customer requirements, logistics, and costs.

By expanding your market, you can double your revenue potential.

Use marketing automation tools to run targeted campaigns with personalized messages for every specific region. The results will be effective.

Establish a referral program

91% of B2B buying decisions are influenced by word of mouth. Despite that, only 30% of businesses have a formalized referral program.

Word of mouth can be more effective if your product requires more research and a longer decision time frame.

Regardless of whether your product falls in that category, create a formalized referral program that can allow your existing customers to act as brand ambassadors for your company.

Referrals are the best leads that you can get and increase your chance of converting them into paying customers.

#2. Increase the average transaction size

This simply means that you are trying to get each customer to purchase more. So how do you do that?

Expand your offerings

If you want to increase your order size, you need to add more products to your offerings.

Customers’ needs are constantly evolving. Anticipate your customers’ future needs and build products that your customers will appreciate.

Steve Jobs once said, “Some people say, ‘Give the customers what they want.’ But that’s not my approach. Our job is to figure out what they’re going to want before they do.”

When Steve Jobs first introduced iPod, he said, “No, the coolest thing about iPod is that you can take your entire music library with you, right in your pocket.”

That’s anticipating your customers’ needs even before they realize they need it.

This approach gives your company the opportunity to be first-to-market and become a disruptor.

Bundle your products

Product bundling encourages customers to buy more as it allows them to save money by purchasing more than one item at once.

You must have noticed how McDonald’s always gives out combo offers. The combo offer price is lower than if the products were purchased separately.

When you buy a burger at McDonald’s, you always get asked if you would also like to add fries and coke to go along with the burger.

That is also known as cross-selling. The more items the customer purchases, the more revenue you collect.

Bundle your products to increase revenue — *Source*

Upsell products and services

Using the same burger example above, upselling would include adding an extra layer of cheese and pickle to your burgers to increase their price.

Basically, selling higher-priced products can help increase the average transaction value of your order, which in turn, boosts revenue.

Let’s take another example.

A company selling CRM generally offers three-tiered plans with additional features on more expensive plans.

A small business would primarily target the least expensive plan. But if your sales rep were to upsell the product, they would try to give a tour of the additional features the middle-tier plan has to offer and how it can benefit their business in a way that the lower-tier option won’t.

Basically, you need to show an upgraded option to your customer and emphasize its benefits over the less-expensive options.

#3. Increase the frequency of transactions per customer

This basically means encouraging your customers to purchase from you more often. Assuming your average transaction size stays the same, you can increase revenue by increasing the number of transactions.

Target repeat customers

The rookie mistake most small businesses make is that they only focus on acquiring new customers.

But increasing your revenue starts with the customers you already have.

Repeat customers not only spend more at your store, but they also help you to market to new customers.

Focus on cultivating a relationship with your existing customers, increase communication with them, and constantly remind them of your brand and offerings.

The best way to foster a relationship with your customers is to send out emails or texts. Share promotional offers, inform them of your new products, and more.

You can, with the help of an email marketing tool, keep track of how your customers are reacting to your communications. Check email metrics like – open rate, click-through rate, bounce rate, and more to understand how effective your mailers are.

Offer discounts and rebates

The most classic way to increase the frequency of transactions per customer is to offer them discounts and offers.

Offer discounts for a limited period and create a sense of urgency. It will help bring in new traffic.

Besides, when customers buy products in a limited-time offer, it creates a sense of achievement for them.

Discounts encourage customers to buy products even if there weren’t planning to buy at the moment. It creates a special buying opportunity for them, often spurring them to take action.

Moreover, it stops them from looking elsewhere and going to your competitors.

After all, who doesn’t love a good deal?

92% of consumers in the U.S. used coupons when buying products last year.

Coupons and rebates also encourage customers to try new products at a discounted price than pay later at full price.

Creating promotional marketing strategies can benefit your business in numerous ways, including gaining customer loyalty.

#4. Raise your prices

If you increase your product price and assume your average transaction value and the number of customers remain the same, it will bring in more revenue.

However, pricing is the most important factor in purchase decision-making.

It can affect your customer sentiments. That’s why make sure that any adjustments to your product price are in alignment with your market situation and revenue goals.

A great example would be Nestle. According to Nestle, they have increased the prices of their products in a responsible manner due to “unprecedented inflation and rising costs.”

When you raise your price, it’s crucial that it doesn’t negatively impact your sales. Study the price of your competitor’s products and understand how your product price stands from the buyer’s point of view.

You can also minimize the negative impact of price hikes by offering free shipping and delivery handling fee for online sales.

Some customers are willing to pay more for a product if the shipping is free.

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#5. Incentivize your sales partners

Review and change your sales incentive structure in a way that further motivates your sales reps to increase sales numbers.

For instance, you might consider investing in your commission plan to give higher incentives to the greater volume of sales. This aligns with the company’s as well as the salesman’s interest.

Wrap Up

Understanding your company’s revenue growth gives you a bigger picture of what’s working and what’s not.

Use an all-in-one platform like EngageBay to streamline all communication and tasks.

It enables you to assign tasks to each individual, keep track of their performance, and generate reports on your campaigns.

In essence, it ensures that all things keep moving smoothly between teams, thereby increasing company revenue goals.

Shammy Peterson

November 7, 2023 at 8:27 PM

It made sense to me when you said that the price of your products must be dependent on your revenue goals and market situation because it can affect your customer sentiments. This must be shared with business owners who intend to grow their revenue without losing a chunk of their customers. Maybe, hiring a reliable revenue growth management consulting company could help them to ensure that their business growth plans won’t negatively affect their current and potential consumers.