The 4 ways to increase revenue
According to Wesley Ng, the CEO of the multimillion-dollar company Casetify, success in business, “... comes down to one thing - being profitable. Being profitable was super underrated until recently,” he told CNBC in an interview.
As much as I’ve been emphasizing the importance of being a people-centric leader, the most successful business leaders focus on profitability in addition to human capital. Why? Because profits are the fuel to the ‘bus’ our employees are riding in. Without it, your company will go nowhere.
Without turning a profit, we won’t be able to pay good bonuses to our employees, or hire better employees, or even attract investors. Profitability is essential to survival and growth. If the company isn’t generating healthy profits, sooner or later our treasured employees will leave.
And one of the key components of generating a healthy profit is increasing revenue/sales.
According to The Personal MBA by Josh Kaufman, regardless of your business or industry, there are only 4 methods to increase revenue or sales, believe it or not!
1. Increase the number of customers.
2. Increase the average transaction size.
3. Increase the frequency of transactions per customer.
4. Raise your prices.
But how does this relate to any business? Imagine you’re a restaurant owner. Here’s how to apply these methods correspondingly.
1. More customers coming through your restaurant door (assuming the average transaction size stays the same) = More sales.
2. When each customer purchases more eg. buying desserts (through a process of upselling) = More sales.
3. When you encourage your customers to buy from you more often eg. if your customer’s weekly purchase average increases from once to twice a week = More sales.
4. You’re now collecting more revenue from the usual purchase a customer makes = More sales
It’s important to note that not every client is a good client. Some are vampires – they will suck your time, energy, and resources without providing the revenue that you’re looking for. Try to avoid these clients and focus your efforts on serving your ideal clients/customers. They will buy often, won’t mind spending more to get more value, are willing to pay a premium for the value you provide and best of all, spread the word. ●