3 Tips on How Local Businesses Can Increase Their Revenue?

Let me start with the premise that what doesn’t get measured or tracked can’t be tweaked or improved.

The revenue of a business may be tied to sales but in the final analysis transactions per sale alone may not be a good predictor of revenue growth.
The revenue of a business largely depends on transactions, the frequency of those transactions, and the amount spent on those transactions.

As a business owner the three most important metrics or factors to consider and track in order to improve your revenue are:

A. Customer Acquisition (Cost per acquisition) that’s much you spend to get someone to become your customer in the first place.This could be walk-in,click on a link or an advert(Ad).

B. Frequency of repeat business or the frequency at which those transactions occur.

C. The amount of money spent on those transactions. That’s how much customers actually spend once inside your business’s premises or online store.

Next you have to allocate marketing budget to cover these three important areas, a good estimate to start with would be.

Customer Acquisition 35%
Frequency of transactions – 35%
Increase in amount spent -30%

Customer Acquisition Methods
Online:
1. Google Adwords Campaigns – Hire an expert to run the campaigns on your behalf.
2. Facebook Ad Campaigns – Hire an expert to run the campaigns on your behalf.
3. Organic Search Engine Optimization(SEO) this could take up to 90 days or more for you to gather enough data and see results. Again hire an expert to assist you.
4. Send out time and quantity based offers using Snap and Instagram stories. You can do this yourself(DIY)
5. Build an email list and send offers to them from time to time. Remember you don’t own data that’s in your social media profiles or accounts.

Offline:
1. On premise signage or flags that’s in front and inside your business directing prospective customers, to come in and take some action you want them to take. You can do this yourself(DIY).
2. Use of Facebook Live videos streamed from your business premises that showcases your products and services to your existing and prospective customers.
You can do this yourself(DIY)
3. Use of Periscope on Twitter videos streamed from business premises again showcasing your products and services to your existing and prospective customers.
You can do this yourself(DIY)
4. Build an email list and send offers to them from time to time. You can do this yourself(DIY).

Frequency of transactions Methods
1. Put a robust reward and referral system in place using coupons or quick response codes(QR Codes) redeemable at your place of business.
2. Consider getting mobile app for your business this would help you implement the reward and referral system mentioned in step 1 easily in addition to other benefits.

Increase in Amount Spent Methods
1. Use Up-sell e.g. most customers who purchased what you just got also bought fill in the blank …
2. Use Down-sell e.g. in case they raise an objection in step 1 counter it saying by the way some also bought this fill in the blank… with your lower priced item.
3. Use Cross-sell e.g. sell them something different from your suggestions in steps 1 and 2 that would also help the customer.

Some Methods for Tracking Factors A, B, C from above:
1. Reduce your tracking cycle to either one week, two weeks, a month or 90 days.
Caution: Try not to go beyond 90 days because the longer your tracking cycle the more difficult it is to make meaningful tweaks.
As longer as your tracking is shorter or up to 90 days. Changes and tweaks you make would make a better impact on your bottom-line.

1. You can track these metrics using pen and paper or a spreadsheet. You don’t need any fancy and expensive software for this purpose.

For example just one repeat business from the same customer per month would result in 10-15% increase in overall revenue .

To summarize in order to grow your revenue you need to do the following:

1. Grow your transactions and not just transactions per sale.
2. You need in invest in and track factors A, B, and C mentioned above, make tweaks accordingly even minor tweaks to all three factors will eventually win the day for you.
3. Don’t be tempted to increase your prices to cover lack of growth in transactions. If you do so soon or later you are going to hit a ceiling and can’t raise your prices anymore.
   In this case of step 3 above, your problem may b customer acquisition, frequency of repeat business or amount spent per transaction. You need address these instead of hiking your prices.

In conclusion, I’ve attempted within the constraints of time, space and other factors to provide you with enough value to get you going. But wouldn’t you agree that isn’t possible to cover everything on this subject matter in a single blog post.