Growing your revenue
I can’t think of any entrepreneur who doesn’t want to see their revenue numbers grow. A surge in demand for the products/services they offer is accompanied by the ringing of the cash register. And there can be no music sweeter than this!
As an e-commerce entrepreneur, you have done your social media and email marketing, now your analytics reports show a recent surge in your site traffic. A happy situation. But does this necessarily result in additional revenues and business growth? No guarantees yet! Not until the higher traffic has actually made the transaction – how does one ensure that?
There must be a two-prong approach taken to ensure increased website traffic translates to higher revenues. There needs to be an increase in the frequency of purchases made and a bigger average order value of the transactions. Basically you would want visitors to spend more money more frequently.
But how do you make visitors to your site spend more?
The truth is that prospective customers will only be willing to spend on your offerings if it brings some value to them. This is vital and it is up to you to get creative to make this happen. In order to help you meet the end goal of revenue growth for your firm, we have some ideas for you. Read on…
How to Increase the Frequency of Purchases?
One of the best ways to do this is by offering complementary products. For example, if you are selling sports goods online and the customer has completed the initial purchase of a tennis racket, how about offering a discount on the balls to go along with it. The trick is to find out what products are complementary to the initial purchase and build a funnel around them.
This offer can also come as a follow up to the initial purchase in the form of a discount coupon emailed to the customer that can be used within a limited time period. You might also consider Introducing a discount ladder by sending discount coupons periodically to your paying customers. The idea is to keep them returning to your store and the best way to do so is by offering good value and slashed prices.
Another way to establish and grow the relationship is to start off by giving away a free trial set of your product that the customer should find valuable and interesting. For example, say you are producing and distributing handmade candles. How about giving away a beautiful set of candles for free to the interested visitors to your site? All they will need to do is pay a small amount for shipping which hints at their genuine interest in your offering. This transaction is going to actually cost you some money, but the idea here is to change the relationship from being just an interested site visitor to a paying customer. You are sacrificing some revenue now for potentially bigger growth in revenue at a later date.
Here again, thank the customer for “joining the family”. In order to show your appreciation, you could offer them a coupon code as a mark of gratitude. This makes them feel good and improves the overall user experience. Hopefully this would also work towards your goal of increasing the frequency of transactions.
Increasing the Average Order Value of the Paying Customer
You can increase the average order value of the customer by Bundling. This requires you to offer a slight discount on the products being bundled together, but will allow you to increase the average order value of this particular transaction and overall revenue growth. At your store selling ethically sourced organic food products, you could be offering a 15% discount on the bundle purchase of a pack of quinoa, chia seeds and flax seeds. Any discount looks attractive to the buyer and will likely prompt them to take up the offer and give you a higher average order value. Just make sure that the products that you have chosen to bundle have a sufficiently high margin and are available in stock.
Upselling is another common procedure adopted by sellers to increase the average order value of the paying customer. Here, the seller encourages the customer to spend more by recommending a higher priced alternative of the current consideration. Again, going back to the organic food products store example, you can always make suggestions of alternative brands or higher margin products based on the tastes and preferences of your customer. Personalizing the shopping experience for the customer makes them feel special and important to the business.
We could also try Cross-selling. Here, you can recommend your customer to buy a product that complements their existing purchase, but from a different category. This kind of add on sales works on the “just in case” mentality and promotes the extra services that you are offering. For example, once the customer has added the apparel into the shopping cart, suggestions of shoes and bags and other accessories that would complement the look is attractive and interesting for the customer. What this means for you as is a higher order value.
Grow by Acquiring New Customers and Markets
Apart from the strategies mentioned above, there is nothing like focusing on growing the customer base to seek revenue growth. Focus on the needs of the customer, understand their feedback and try to add value to their lives. Sell what your buyers want to buy rather than what you want to sell and let them be your guiding light in your approach to marketing.
Apart from good old email marketing, the proliferation of social media marketing has become very effective for acquiring new customers and reactivating old ones. Facebook Exchange is particularly effective in reducing shopping cart abandonment. Customer loyalty and lifetime value can also be enhanced by setting up anniversary and birthday discount coupons. Most of these discount codes can be automated further reducing resource costs.
Data reveals that increasing number of transactions are being made from mobile devices, so becoming mobile ready and compatible is also crucial. This trend is here to stay as mobile adoption rates continue to rise.
The internet has brought the whole world closer. Targeting new customers and trying to expand into new territories no longer requires huge investments, all that is needed is a smart, value adding product and a creative marketing engine to let people know about it.
The advent of web browsing means that it is crucial for entrepreneurs to be able to navigate and convert website traffic into customers, allowing them to move from ad-hoc customers to those with long-term relationships. In order to maximize revenues, it is important to be able to do the following:
- Increase the frequency of purchases via complementary products and bundling
- Offer promotion codes that encourages repeat customers, offer free sample of products
- Upsell products and cross sell
- Sell products that the customer actually needs rather than what you as a seller would like to sell, take on board customer feedback
- Ensure that website and sales platform is mobile compatible due to high levels of smartphone penetration