DATE: October 16 – 2016
Read time: ±20 minutes
Some of us are struggling. Struggling to make ends meet. It’s hard to get the phone to ring or the door to swing. You’re good at what you do. That’s not the point. But you are so stuck working IN your business that you can not seem to find the time to work ON your business. And on the other hand, some of us are doing fairly well. You can support your family and you make a living. Yet you hardly every ask yourself the question; Can it be better? And if so; how much better?
In this article I’ll show you three ways you can increase your revenue starting today. I’ll use freelance WordPress developers and designers as examples, but this stuff applies to all types of businesses.
1) Increase the number of customers
This is an obvious one, right? More Customers means More Revenue.
So here’s a list of different ways to get more customers.
Speak at local event
Unique Selling Point
Now, by no means is this an exhaustive list, but it just goes to show that there are A LOT of ways to drive more customers to your business.
Some are obvious, like having a website and doing some blogging. And others are perhaps a bit less obvious, but non the less powerfull, like Direct Mail and Partnerships and Referrals.
Let’s take a closer look at Referrals as an example
Now we all know that word of mouth is a very important way of getting new customers. And technically, word of mouth would qualify as passive referrals. It seems as if – for some reason – they just magically happen!
But what if you could put procedures in place that actively encourage your customers to provide you with quality referrals?
When you deliver the work you’ve done and you have made sure the customer is satisfied and happy – at that moment, – you ask for the referral.
The main point here is that it needs to be something that runs like clockwork. So you should attach it to things you’re already doing.
For instance, when you deliver the website or the work you’ve done and you have made sure the customer is satisfied and happy – at that moment, – you ask for the referral. Either in person, on the phone or via email. But you have to ask.
So what if – come Monday morning – you called the customers you’ve finished projects for last week or last month and had a conversation that might go something like this:
If you do this Monday morning – if you call your customers with a story like this – will they forward your email to a few of their friends?
And when they do, you should always send a thank you card – via snail mail – to the customer that referred a friend. It has a much higher perceived value than a thank-you email. You can have a bunch of them ready to go.
And when the referral becomes a customer, in that case, include a crisp, 50 euro bill in the thank you card and see what happens. Not some vague promise or ebook or something. Warm-fuzzy cash right in their hands.
Do you think they will remember you?
Do you think they will try to refer more of their friends to you?
If you think that 50 euros is too much, you can always go to a popular restaurant in your town, offer them to create a new website for them in exchange for 40 Dinner-Gift-Cards and include those with each referral that becomes a customer.
Now maybe you prefer to try some Twitter ads first, or blogging or AB-testing stuff on your website. And I get that. That’s fine.
But I’ve included this example of getting referrals on purpose because it’s something we can all do and it’s free – and risk-free – and it’s something you can do this Monday morning.
Now let me ask you:
Do you think you can get more customers using one or more of these techniques?
If you have 3 clients per month or per week, could you get 1 more using these techniques?
2) Increase the Average Sale Amount
Let’s take Mc Donalds as an example. When you order a burger, they’ll always ask you if you want fries with that. Same goes for when you buy a toy in the store that needs batteries. The sales person helping you should always offer you a pack of batteries.
Okay, so what can you think of, that you could do this Monday morning, to increase the average sale amount or transaction amount in your business?
You could raise the price
Suppose you have a regular hourly rate of 75 euros an hour. Additionally, you could offer a drop-everything-this-is-an-emergency hourly rate of 89 euros an hour.
Upsell Bigger volume
This means you offer more of the same, like a large fries instead of medium. Or a 10 page site instead of a 5 page site.
Upsell Longer period
Good idea when you sell subscriptions
Cross sell something complementary
Such as copywriting and photography when you sell a website.
Cross sell something unrelated to the order
Such as logo design, business branding or creating a flyer or brochure.
The things you offer as an add-on, don’t even have to be your services. They can be services performed by reliable other businesses or freelancers you know and trust.
You know you’re probably already doing this, right? When you sell hosting or themes or plugins to your customers. Just make sure you get a piece of the action :-)
Alright, now let’s take cross-selling and zoom in on that for a moment.
Discounted Hourly Rate
One of the things you could do is offer a discounted hourly rate when they buy pre-paid packs of your time. Like 10 – 20 and 30 hours of your time that you sell as a pre-paid pack and that the customer can use as they go. That would justify giving a discount on the hourly rate.
How many of your clients would go for this do you think?
How about selling your time as a monthly subscription?
Another example of cross-selling is offering a maintenance plan for the website you’ve just created for your client. You know, where you do backups, WordPress updates and Plugin-and-Theme updates, security scans and stuff like that. You can then bundle that with an hour or half an hour of your time – per month – to fix stuff you encounter when you do the updates.
To prove the value of your work, you can send a monthly report to your customer with what you’ve done, the problems that arose, that you fixed them and how much of the prepaid time is still available.
If they pay for one year in advance, you can give them 1 or 2 months discount.
Now let me ask you this:
If you sell a website for 2000 euros, do you think you could upsell a prepaid pack of 10 hours of your time at 650? Do you think you could upsell a maintenance contract for 50 a month? Could you do both?
Alright; Let’s move on to the third and last way to increase revenue:
3) Increase the Sales Frequency
By this, I mean selling more often to the same customer over time.
This is such an easy way to get more revenue and it is soooo overlooked! You know how hard it is to get a new customer. If you’ve done well on a project and that customer is happy, it is maybe 10 times easier to sell to that customer again and again than it is to convince a new customer!
So let’s look at some ways we can tap into this great source of additional revenue.
Now one way to do it is to just wait until they need something again but that’s not really pro-active, right? How about you offer to help your customer setup
Like for holidays or Valentines Day? You can contact them early in January to help them get ready for a ValentinesDay- campaign. You know, design an email template for them or facebook visuals and a landing page with some great sales copy. Then contact them in March to help them prep for a summer special. Contact them again in September to help them get ready for the shopping month of December.
Can you imagine how glad your customers will be if they are offered some sincere help with this stuff?
Are a great way to sell more often to your existing customers. How many of them will go for a maintenance contract if you called them all this Monday? 1 out of 10? 3 out 10? Same goes for the
Pre-paid time packs
10-20-30 hours of your time bundled as a prepaid pack make for a great way to sell more often to your existing customers.
Additional products and services
After you’ve done a project, you can always come back later with additional products and services, like doing SEO, Social Media Campaigns, help with Facebook-, Twitter- or Google advertising, etc. You are the expert in the eyes of your customer.
Other peoples products and services
You can even offer other people’s products and services related to yours, such as logo design, copywriting, photography, business identity design.
You could set up a Loyalty Program – where you give a discount or bonus on next the purchase. Only available to return customers.
Or organize a Special Event for preferred customers. It doesn’t have to be fancy. Just share some of your knowledge with them in a cozy setting. And at the end of your presentation, make them a really interesting and benneficial offer that is only available that evening. Think: Tupperware party.
Now in order to pull this off, it’s really important you keep the relationship with your customers alive.
So schedule in your calendar – at regular intervals – that you call all your customers to see if they are still happy and if they need anything or any help or any advice. Personal contact works best. Or a combination of an email every 2 weeks, a letter every quarter and a phone call every 4 or 6 months.
And this communication can not be self-serving. It needs to be all about the client: Whats in it for them.
Okay, now tell me:
Do you believe you can sell different things to your existing customers – multiple times a year – using one or more of these techniques? Some things that really benefits them?
One more (really amazing) thing…
Okay, so we’ve seen the three ways you can increase your revenue starting this Monday morning. Now I would like to bring this all together by showing you one really amazing thing.
You’ve probably heard of compound interest, where you put money in the bank and leave it there for a long time. Then you get an annual interest on the money you put in as well as on the interest you received in the previous years.
Nowadays you’d be happy if you got any interest at all on your savings, but normally this generates exponential growth instead of linear growth which you would have if you only got interest on the money you put in.
Well, let me introduce you to
The Magic of Compound Revenue Increase.
Which works slightly different, but with a similar result.
So we have the three ways to increase revenue: Increase Customers – Increase Sale Amount – Increase Sales Frequency. Consider whatever the numbers are at the moment your baseline of 100%:
100% x 100% x 100% = 100%
If you increase either one of the these by 30%, you will have increased your revenue by 30%
130% x 100% x 100% = 130%
100% x 130% x 100% = 130%
100% x 100% x 130% = 130%
That makes sense, right? That’s linear growth.
But see what happens when you increase all three by 30%
130% x 130% x 130% = 220%
You will have effectively more than doubled your revenue! My friend; this is exponential growth! And it’s – totally – within your reach!
Now watch this! Let’s take this one step further:
The impact of doubling revenue on your profits.
In the example of a freelance WordPress developer or designer making websites for clients, the profit margin on revenue is what, somewhere between 40 and 60 percent? Let’s say 50% to keep things easy.
You have some fixed costs, such as a phone, and internet connection, and the depreciation or your laptop and maybe some office space you rent. For a total of 30.
And then there are the variable costs, like travel expenses when you visit clients or buying themes and plugins and web hosting for your customers. They make up 20.
The rest is profit or your salary so to speak. 50%
Now, when your revenue goes from 100% to 220%, your costs don’t grow by the same numbers. The fixed costs remain the same at 30. I mean, you don’t all of a sudden need 2 offices. Or 2 laptops. Or 2 internet connections.
So only the variable costs go up by 220 percent. They go from 20 to 44. And because of that Your profit will be 146 instead of the 50 you have now.
- If you increase the number of customers by 30%
- And you increase the average sale amount by 30%
- And you increase the number of times you sell to each client by 30%
- You will more than double your revenue
- And you will tripple your profits
Do you get this?
If you increase each of these area’s by 30% – you will TRIPPLE your salary!
Let me wrap this up and get out of your way.
I am a firm believer in the law of cause-and-effect. And more specifically the law of Sowing and Reaping.
A farmer first needs to sow before there is anything to reap. But come harvest time, he needs to keep part of the crop aside to sow again next year. Often that’s around 10%.
And the same goes for you.
You need to invest about 10% of your time in growing your business. You need this time to work ON your business.
There is no doubt in my mind that you can significantly increase each of these three revenue streams using multiple tactics we’ve covered in this article . And you have seen the cumulative effect it has on your total revenue.
Exponential growth is within reach. The question is: Will you grab it?