Sales are the single most important activity in which a company can engage. They allow companies to hire people, buy equipment, and manufacture products or deliver services. Without sales, there is no future for a business.
The poor economy in recent years has hit small businesses particularly hard. Whether you’re among the affected companies or just want to boost your sales, the following strategies to raise revenues are effective in most situations. However, your decision to implement any of them should be based upon several factors:
• The compatibility of the strategy with your products
• Your understanding of the buyers’ motives when they purchase your products
• Your company’s willingness and capability to effectively implement the strategy
• Whether competitors will copy your strategy and dilute the impact of the change
• Your expectations of the future economy and its effects upon your business
While each of the strategies can be implemented alone, you can implement several of them simultaneously for greater impact on revenues.
Expand Your Market
Add Complementary Services to Existing Products
Adding complementary services or products may help you gain new clients, as well as maintain existing ones.
Extend the Geographic Market Area
Many small businesses limit their marketing and sales efforts to the immediate area surrounding the central location of their business. The additional cost to cover a larger market could be minimal and possibly increase potential sales. Don’t assume another market is being served without investigation.
Enter Cooperative Sales Agreements
Contact companies that sell a complementary product or service with a request to sell your products also. Many companies actively seek complementary products as they add very little to marketing and sales expenses – it is just a matter of finding the right partner. Adding additional salespeople for no out-of-pocket cost is a sure sales booster.
Hone Your Pricing Strategy
Price is the single most important factor in a decision to purchase a product or service. A low price can represent a “bargain” or low quality in the buyer’s mind.
Before implementing any pricing strategy, know how your customers feel about your product so that a change in price encourages the market behavior you want. Always consider your prices “temporary” and adjust them to meet the market and competitive circumstances.
Raise or Lower Prices
The prices of products constantly change, so you should not be reluctant to adjust your prices to meet your objectives or the market situation. An immediate price increase will bring additional revenues and profits to the company if the price increase doesn’t negatively impact sales. A price reduction will stimulate more sales and take market share away from other suppliers. Knowing how your products compare with similar products from the buyers’ viewpoint, as well as the prices of competitive products, will allow you to best position your prices in the marketplace.
Add, Reduce, or Eliminate Shipping and Handling Charges
In lieu of raising the price of a product, consider adding a shipping and handling charge. The net effect on revenues is the same while avoiding buyer backlash to a price increase. If you currently charge for shipping and handling, consider reducing or eliminating the charge for a specific time frame in order to stimulate sales.
Offer Special Discounts
Discounts, properly marketed, create a special buying opportunity in consumers’ minds, often spurring them to take action. The discounts can be applied to limited products, such as a single manufacturer’s brand, a limited category like school supplies, or all products.
Invigorate Your Sales Collateral, Website and Social Media
The importance of sales collateral – brochures, presentations, product data sheets, pictures – is often overlooked by business owners, even though the only purpose of the collateral is to make the sales effort easier and more effective. As a result, the information presented to potential buyers becomes out-of-date, inaccurate, and misleading. Websites frequently suffer from the same malaise, and visitors to the sites dwindle.
Make sure that your website is optimized to help create your brand, generate customers and provide vital information about your product or service. Your website should be easy to navigate, always have fresh content and a friendly design making it easy for customers and potential customers to get the information that best tells your story.
In today’s competitive marketplace, social media marketing is a must have in your marketing strategy. Social media increases the traffic to your website, connects with consumers and industry leaders, improves brand image, gives an edge over competition, and increases sales and return on investment. These are just some of the benefits of social media.
Strategies to improve profit
Increase productivity of your staff
Make sure that company processes enhance the efficiency and effectiveness of your staff. Ongoing reviews with staff promote communication and can provide valuable system of operation inefficiencies. Your staff is on the front lines of your business and is keenly aware how ineffective process affects their performance.
Customer service is about giving customers what they want, when they want it, in the best possible way. If your business provides good customer service, you have a greater chance of keeping and increasing your customer base.
Develop strategies to decrease costs
As a small business owner, you’re always looking to bring in more business and increase profits.
However, another way to boost profits is by cutting expenses. Even if you’re having a good quarter full of brisk sales, out-of-control costs will quickly eat up your profits.
Avoid the mistakes that other businesses are making. Keep close track of your expenses, using a small business accounting and cut them every chance you get. Your competitors might overlook some of these expenses, but you won’t.
Benchmark key financials
Benchmarking your business is a way of measuring your performance against similar-sized businesses in your industry. It gives you essential information about how you can improve your business.
Focus on your more profitable items
Your products or services with the highest gross profit margin are the most important to your business, as they generate more money. Once you have identified your most profitable items you should concentrate on achieving higher sales targets for them. This may require you to rethink aspects of your business or to devise strategies for improvement.