All businesses strive for steady revenue growth. It’s the sign of a healthy company with staying power. Noticing a slight dip in your sales data from the previous quarter can be scary, but know that it’s temporary!
Simple tweaks to your marketing and pricing strategies can drive more sales and get you back on track to reach your goals. All it takes is a little know-how and elbow grease. In this guide, we’ll look at eight foolproof strategies to increase revenue for small businesses, no matter your industry.
1. Build strong customer relationships to boost repeat business
Assess your current customer base. Chances are, you have a few clients who buy from your business regularly. Work on developing those relationships to maintain steady revenues.
Why loyal customers are your revenue heroes
It’s much more cost-effective to keep existing customers than it is to attract new ones. How much so? One expert, Ali Cudby, states that acquiring a new customer costs six to seven times more than retaining an existing one. Going even further, she estimates that a 5% increase in retention can improve business profitability by 25%.
Say you spend $500 on an online ad campaign to attract new customers to your website. The ad campaign results in sales of $750 — that’s a $250 profit! That’s always something to celebrate, but a customer who’s already familiar with your brand could make another purchase without seeing an ad first. Anything earned from their visit would be pure profit, no marketing expense required. If it happens more than once? That’s steady revenue.
You can calculate your current customer retention rate using this formula:
(Customers at end of period – New customers acquired) / (Customers at start of period) x 100
For example, if you start the month with 60 customers, acquire 5 new customers along the way, but end the month with 50 total customers, your customer retention rate is 75%, or (50 – 5) / 60 x 100.
Easy ways to keep customers coming back
To grow your customer retention rate, try these strategies:
- Loyalty program: Reward returning customers with points they can use toward future purchases.
- Thank you messages: Send customers a note of gratitude after they make a purchase.
- Follow-ups: Ask clients about their shopping experience and take action on their suggestions.
2. Offer value without cutting profits
Discounts attract budget-minded customers eager to save money on their next purchase. However, coupons and sales can also reduce the total profit earned on each sale, so it’s critical to use them wisely when you’re trying to increase revenue for your small business.
When smart discounts increase revenue for your small business
It’s normal for businesses to have sales peaks and troughs. Instead of offering a discount during peak times to capitalize on traffic, try offering one when fewer people are shopping to encourage traffic. For instance, you might provide a major discount a week before Thanksgiving and a smaller one on Black Friday. Your strategy could help draw in more customers during slower shopping periods while still inspiring sales during busy times.
Does your product lineup include complementary items? If so, you could offer a discount when customers buy them as a bundle. This strategy helps drive extra purchases. Since you can average the discount over multiple products, its impact on total profit is lessened. It may also increase your average order value.
As an example, assume a customer wants to purchase a $150 winter coat from your store. You could bundle the coat with a hat and gloves for an extra $25. If bought separately, all three products cost $200, so your customer saves 50% off the hat and gloves through the bundled deal. However, the actual discount on the total bundled purchase is 12.5%, or ($25 / $200) x 100.
Creative value-adding alternatives beyond coupons
Look past percentage- and dollar-based discounts to increase revenue for your small business. Here are a few options:
- Bonus products: Include free samples or travel-size items with big purchases.
- Limited-time specials: Stoke urgency with a 24- or 48-hour discount on specific products.
- Bundling products: Offer a special discount for customers who buy a group of relevant items.
3. Become the go-to expert in your field
Do you run a knowledge-based business, such as financial advising or personal training? If so, how customers perceive your expertise can dramatically affect sales. Use these tips to position yourself as an industry expert and increase revenue for your small business.
Show off your knowledge
Use your website and social media accounts to share informative content on topics that matter to your clients. For instance, if you’re a real estate agent, you could publish blogs about local housing trends, mortgage qualification, and improving home value. You can easily repurpose your blogs into other types of content, such as social media posts, infographics, or podcast scripts.
For best results, be consistent in your efforts. Set a regular schedule for your blogs and social media posts, and stick to it. Customers who see your content regularly may be more likely to reach out when they need your help.
Turn expertise into revenue
Another way to demonstrate know-how (and increase sales for small businesses) is through free workshops. Hold a one-time class on a relevant topic and promote it on your social media pages, website, and emails. If you’re hosting an in-person event, advertise it in your community to encourage locals to join. During the course, you can gently push your services to your attendees.
Your email marketing list is a prime opportunity to showcase your expertise. Use email to share a weekly or bi-weekly newsletter filled with valuable industry insights, business updates, and highlights from your blog or social media. Your audience will get engaged with your content, and you’ll be top of mind when they need to search for a service provider.
If you have a degree or certification in your field, make sure people know about it! Share your credentials in the “About” section of your website and on your LinkedIn profile. Credentials can justify charging higher rates for your services, helping increase revenue for your small business.
4. Expand online to sell beyond your local area
Find creative ways to expand your business outside of your community. There are easy tools you can use to take your products and services online and reach a larger audience.
Simple ways to start selling online
Is your business product-based? Take advantage of large ecommerce platforms to boost sales. Shopify’s platform is built for online sellers and includes lots of user-friendly website templates and features to get started.
Social media is another great option. Setting up an Instagram Shop lets you post images and videos of your products and sell directly within the app. You can tag items and include a direct link that users can purchase from. If your customers are on Facebook, consider listing items on Facebook Marketplace to draw people into your store. The platform is more known for peer-to-peer sales and bargaining, so be transparent with users about being a small business.
Convert online shop visitors into buyers
When selling online, clear descriptions and product images are a must. Emphasize the value of your products and how they benefit buyers when writing your descriptions. If it’s within your budget, hire a professional photographer to capture compelling images of your products.
Streamline the checkout process wherever possible. Too many steps may discourage someone from completing their purchase. Offer a guest checkout for customers who don’t want to create an account.
5. Team up with marketing pros when it makes sense
As a business owner, you juggle a lot of tasks. Hiring an experienced marketer can help you identify more opportunities for business growth.
When to DIY and when to hire help
Effective marketing takes time to build, but as a small business owner, you likely have a lot on your plate. If you’re stretched thin, consider outsourcing some of your marketing tasks. For instance, you could hire a freelancer to draft your weekly blog posts or a social media manager to create content for your business.
You can find experienced marketers on freelancing platforms like Upwork. This may be a good option if you want short-term help without a long-term commitment.
Businesses that want in-depth help with marketing may find more success with an agency. This type of partnership can help you pinpoint advanced solutions to help grow your sales, such as integrated marketing.
If you’re working with a tight budget, hiring outside help may not be an option right now. Instead, focus on marketing activities with quick returns, such as pay-per-click ads. Building an email marketing list is also low-cost and delivers strong returns. Take time to learn more about marketing and implement strategies on your own while you work towards bringing on freelancers.
Working successfully with marketing partners
Get clear on your goals before signing on with a marketing partner. Tell them exactly what you’re aiming for, whether that’s a 10% increase in sales over the next month or 50 new customers.
Be sure to measure your results from marketing partnerships and compare them to your costs. This can be as simple as evaluating the return on investment (ROI), which you can calculate with this formula:
(Net profit from marketing / Investment cost) x 100
For example, if a $200 investment in social media marketing yields $500 in sales, the net profit is $300. So, your ROI would be ($300 / $500) x 100, or 60%.
6. Focus on high-ROI marketing channels
To increase revenue for small businesses, focus on the marketing channels that deliver the highest returns. For many companies, those are email and social media.
Turn email marketing into your revenue workhorse
Work on building a list of email subscribers who are curious or excited about your business. Encourage people to sign up for your list whenever they shop with you. You can use email to promote products, strengthen client relationships, and keep customers informed about topics relevant to your business.
Email automation tools make it easy to drive revenues, even when you’re not online. Draft email sequences to reach customers at each touchpoint in your buyer’s journey. That way, customers who already want to hear from you will receive targeted messages based on their interactions with your business.
Targeted social media
Post content to your preferred social media platform with targeted calls to action, or CTAs. For example, you might use social media to advertise your next free workshop. Giving followers an option to reserve their place in advance via your post drives more engagement, which can extend reach.
Always include a call to action in your posts, whether it’s in the caption or the post graphic itself. With a free workshop, you could create an eye-catching graphic and include a phone number to reserve a spot in the image. Or, you could include the sign-up link in your caption for users to click through. The key is to keep your followers interested in your business and inspire immediate action.
7. Raise prices strategically
One way to increase revenue for small businesses is to hike prices. This option works well for companies that have an established customer base or charge less than competitors.
When and how to increase prices
Knowing when to raise prices can be tricky, but follow your instincts. Signs to look out for include:
- Replacing stock frequently to keep up with demand
- Receiving lots of positive feedback and reviews
- Charging less than your competitors for similar goods or services
Try changing prices incrementally to analyze their impact. For instance, you might increase the price of a top-selling product and evaluate how it affects demand. If you continue to see steady sales, you can rest assured that customers are alright with the changes.
If you’re implementing a large price increase to cover rising expenses, be transparent about it with your customers. Your explanation can help them understand your reasoning and ease the transition to higher prices.
Adding premium options
Introduce a tiered pricing system to capture customers with different budgets. This strategy works well for service-oriented companies, where clients may not need the full extent of your assistance. You can offer a lower-cost, no-frills option and higher-priced tiers with more bells and whistles.
8. Track what works and do more of it
As you implement techniques to increase revenue for small businesses, monitor the results carefully. This data will inform your future strategies.
Simple numbers every business should watch
Several metrics provide valuable insights into future business growth. Start with historical conversions, which use previous sales data to predict future revenue. Make sure to account for any seasonal or market condition differences that can affect the numbers, like holidays or economic downturns.
Activity data is also a good sales estimator. Review click-through rates on your CTAs and check customer traffic to your website pages. Upticks in customer interactions are a positive sign that your revenue-increasing efforts are paying off!
Create a growth routine that sticks
It takes time to increase sales, so be realistic about your business growth potential, especially in the short-term. Setting small goals can help you create momentum and build upon quick wins for long-term success. Be open to adjusting your strategies when you see something isn’t resonating with your audience.
Your revenue growth plan: Next steps to take today
You’re clear on how to increase revenue for your small business — now it’s time to take action! Pick a strategy from the list and start implementing it today. For instance, if your goal is customer retention, creating an email subscriber list and sending out weekly messages can help you maintain strong connections with your audience.
Remember, small improvements compound over time. It’s the first step that counts. Explore Constant Contact’s ecommerce email marketing tools and start connecting with customers today!
