As a business owner, you’re always going to be looking for ways to increase sales revenue. Often, it’s not as simple as more advertising, especially if you pay for that advertising. Sure, boosting your marketing is one way to increase your revenue, but it’s not all there is.
If you know and understand a variety of ways to increase sales revenue, you can put them all to work, and you’ll do much better than you would simply with one method or another.
Understanding Gross Sales vs Revenue
First off, it’s important to understand that there’s a difference between gross sales and revenue. Both are income, but they’re measured differently. Revenue is all the money you bring in through your normal business operations. Your gross sales are part of your total revenue, yes. However, they also include interest and dividend payments from all your business holdings and investments, and royalty or licensing fees received from the use of your trademarks and patents.
Your gross sales, on the other hand, is all the money you’ve brought in from your sales alone. So when we talk about increasing your sales revenue, this is the measure we’re talking about. Increasing returns on investments and holdings, and increasing royalties and licensing payments, are two entirely different components of your total business revenue.
It’s possible for your gross sales to be more than your total revenue, particularly if you’ve got no investments, and you’re not receiving royalties or licensing payments on your trademarks. If your only source of income is your sales, then your total revenue would be your gross sales minus things like discounts and returns.
Ways to Increase Sales Revenue
Now that you know the difference between gross sales and revenue, it’s time to look at various ways you can use to increase sales revenue.
How to boost marketing
This is one of the most popular strategies for increasing sales revenue. When you boost marketing, you raise your visibility, drawing more people to your business. Doing more of the same old things isn’t necessarily the best idea, though. In fact, it can be a terrible idea.
One way to improve your marketing is to see what your competitors are doing. For instance, if your competitors regularly run ads via Google Adwords, and you don’t, you might try doing that. The fact that they keep paying Google for ads can show that it’s a strategy that works for them. That means it can work for you too. The same applies to Facebook ads, Twitter cards, and any other paid advertising your competitors are using that you aren’t.
Other possible ways to boost marketing include keeping your social media up-to-date. This includes your accounts’ photos, posting regularly, and promptly making changes (such as your business address, phone number, or website URL). Also, get genuine product or service testimonials (some companies hire people to write testimonials, which is not what you want if you want to increase sales revenue this way). You can put these on your social media pages and your company’s website – anywhere potential customers might see them.
Finally, engage. This is especially important if you’re a local business. You’re not just looking for new business; you also want to connect with existing customers. Getting a booth or table at a local festival or fair is a great way to do this, primarily if you sell anything homemade. Email lists and engaging your customers on social media are great, too.
Boosting your marketing is just one way to increase sales revenue, however. What else can you do?
Good pricing strategies and methods
There are several pricing strategies and techniques you can use to increase sales revenue without hiking your prices or comparing them to your competitors’ prices. One useful approach is to price similar items similarly, but not identically. It seems to make sense to sell two similar items at the same price, but research has shown that to reduce sales. When you price similar items identically, people tend not to choose anything at all.
This isn’t to say that you should price every single item you sell differently. If the items are virtually identical (such as different scented soaps), you should probably price them identically. But say you produce basic soaps with no scent and your scented soaps. Highlighting the slight difference with a small price difference can help people make a decision.
Other pricing strategies and methods that can increase sales revenue include price anchoring, which is putting two similar items with drastically different prices right next to each other. Want to sell a $300 ring? Place it next to a $2,000 ring. In other words, if your business offers premium items and standard items, place them next to each other. The standard items, even if they’re highly priced, seem like a bargain.
Also, end your prices with nines. For some reason, $29 looks like it’s much less than $30, while $25 seems like it’s only a little less. This is true even when you’re slashing prices on sale items. The number nine is extremely powerful in the minds of customers.
Finally, write your prices as simply as possible. “$399” can seem like much less than “$399.00” when people are looking at price tags.
Identify the best product distribution channels for your business
Your product distribution channels are one of the keys to maximizing your sales revenue. Depending on your type of business, your product distribution channel might be simple. For instance, if you run an Etsy store, you probably sell and ship your products directly to your customers. It might also be complex, such as manufacturers using wholesalers and retailers to get their products to their customers.
This is a tough one because it can require studying how best to get your products to your customers. That means identifying several different possible channels and testing them out to see what happens, which, in turn, means thinking about your audience. Who do you want to reach? Can you sell directly to your customers yourself, or are you better off finding retailers to sell your products for you? Which one maximizes your sales, and thus, your sales revenue? Is there a combination of these things that will do the trick?
If you find that you’re in between these two things, one test could include choosing just one retailer to sell your products, while you also sell them yourself. If you find you need a retailer, you may have to try out several different ones before you find someone (or a few someones) who are ideal for you.
Use These Strategies Together to Increase Sales Revenue to its Maximum
Individually, each one of these strategies can help you increase sales revenue, and it might seem easier just to pick one and stick with it instead of integrating all of them into your overall business practices. But as a business owner, you already know it’s hard work, and the chances are that you welcome that work. So why not put all this to work for your business, and maximize your sales revenue? Everything you do will ultimately pay off even more for your business if you take these strategies and stick to them.
Featured image: CC0, by ZIPNON, via Pixabay