How do you increase your revenue, or better yet, profits? You know, I believe that profits solve all problems. How do you increase the amount of money, you make in your business?
How do you grow faster?
And it was really through this kind of challenge. I went through my improve your company sales, Clarity. Clarity is a marketplace for entrepreneurs to get expert advice from other entrepreneurs over the phone, kind of like Airbnb for entrepreneurs. And you know, the business model was that we took a 15% transaction fee, but the truth is, once we ran the numbers. We realized we needed to increase the lifetime value of a customer. That is, the value of a customer over time based on their current pattern of purchasing. So, what I want to share with you guys, are the lessons that I learned spending months studying, understanding pricing, and really figuring out there are only three different levers that you can pull to increase your revenue, increase your growth and ideally, increase your profits in your business.
The first one is to charge more. It sounds crazy cause I lot of you guys are thinking well if charge more my customers will leave. And you know what, maybe some of them will. Maybe 10% may do that. But I would challenge you and my argument for you is, ask yourself what value I can create for improve your company sales if I only increase my prices by 10%. What value could I add to make sure that that’s justified.
If they buy your product, what are other things that they might need, because you know if they’re buying that product, they’re on this journey that you can bundle or add to that purchase.
The ultimate if you want to see this in real, live action, is Go Daddy. Go try buy a domain and walk away with just the domain. You know exactly what I’m talking about. They’ve really perfected this idea of an up sell and a down sell and those are all there to increase the average transaction size of a purchase. It’s not about a $20 domain. It’s about the hosting, the email support, the design work. Whatever you need, they’ve really figured out how to increase that because the more you increase it, the more profit you’re going to have, the more margins you’re going to be to reinvest into your business.
- What would need to be true
- What could you offer
- What would that look like to increase
- The number of times they purchase
Because check this out, this is some cool math. If you can get your price up by 10%, you can increase the average transaction size of that first purchase by 10% and you can increase the number of times the customer buys by 10%, you can grow your business by 33% this year just by doing those three sale strategies.
You really excited about the opportunity ahead of you to really take your business to the next level. To really think about strategically, those key areas to really get the most revenue out of your business. So, with that, if you know somebody that needs to see this video, please share with them.