You want to double your revenue? Here's 4 simple steps
We feel like we say this a lot but there can be some fundamental insights that lead you to guide your business a little differently each time. This is one of those situations where we had a chat with some clients a few weeks ago, they were putting down their agenda and new plans. The sort of plans that lead to meetings and boisterous gung-ho about what the new year will bring. We joked that it was the sort of plans that gyms are run on at New Year.
They wanted to double the number of clients and customers that they had next year.
Whilst that sounds very do-able for some businesses, and some of you have close relationships with some clients that mean that doubling your clients may mean attracting 8-10 new clients, whereas some online businesses could be 2,500 plus for their client base.
We had a chat, dug in deeper and reminded them of one of the main reasons they hired us. Not simply because we’re awesome at managing their online presence, but also that we have a solid business background, coming from managing and growing businesses of all sizes.
The five "why's"
We like to ask “why” five times, to dig in to what people really want. This applies out with business as well, you might want to try it the next time you set a goal.
I want to double my customers. Why do you want that? Because then we’ll have a bigger business? Why do you want that? Because then we’ll be more stable having a bigger customer base… it can go on and on but effectively, like most businesses they wanted to have double the amount of customers so that they had double the revenue and amount of money in the business (roughly speaking).
We asked if that would also give twice the amount of headaches. Probably. Twice the amount of administration. Undoubtedly so. You see where we are going with this point…
So we showed them something that really opened their eyes.
Let’s play with the numbers.
Your 100 customers
Let’s assume you’ve got 100 customers.
Each pay £100 for your product every 30 days. This tells me that you have £120,000 revenue every year (100 customers x £100 x 12 months)
I want to increase my customers by 20% – much more workable than simply doubling your customers. So I now have 120 customers. This is also a bit more admin friendly, your existing workforce are more likely to be able to handle this, or even just a slight increase in your team/hours.
I also want to increase the price by 10%, to £110. A very admin friendly option, just change a few numbers and voila it takes care of itself.
I’d also like to see if we could decrease the customers buying cycle from monthly to 21 days (this means instead of buying 12 times in the year each customer will buy 17.4 times in the year).
Finally, I’d like to increase the customer order value – simple things like ‘frequently bought together’ and having products grouped together can bump up order values from each customer. Let’s say this adds even a small amount, just 5% to the order – this takes your orders from £100 – to £110 (increased price), to £115.50.
Now let’s run those numbers again.
120 customers, buying at £115.5, every 21 days. Your revenue goes from £120k to a healthy £241,000. Not bad for setting simple goals that are very reachable.
There’s a few things that we can do to help with something like this – the price change is the easy one that you do.
More customers – great, this is our expertise. Perhaps you need to look at additional marketing options, perhaps you’re not doing any marketing at all just now, and replying on word of mouth? Or perhaps you’ve got a bunch of marketing going on but you can’t figure out what is effective. If you find out you’re spending half of your budget in a place that is effective in driving new customers, and half of your budget in places that doesn’t help, then the most simply thing to do is to switch your ‘bad’ marketing budget over to your ‘good’ marketing and you’ve immediately increased the ROI (return on investment). Your issue may be figuring out what part of your budget and marketing isn’t effective.
We can also put in place some mechanisms and automations that can help. Perhaps you need automated emails to follow up with clients, perhaps you need specific marketing on social platforms that only go out to some customers at certain times (i.e. a 18 days after they purchase) this means we can segment your existing customers to make sure they get the right marketing at the right time.
We can also redesign shop pages and add ‘frequently bought together’ items to help with upsells – again, an easy thing to do to increase both average order value and customer lifetime value
We’re doing this daily for clients who want to get ahead of their competition and provide a better service to their clients.
So here’s your nutshell:
Double your revenue (without having to double your customers)
- Upsell – add ‘frequently bought together’ items to your site, give additional options
- Increase your price, but you only have to do it a little
- Use marketing and email automations to make customers buy more often – shorten their repurchase journey
- Use your existing clients to find new ones just like them, and buying the same things.