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Utilisation of existing customers to increase revenue is something that is quick and simple to implement and can immediately start paying dividends
Emblazoned across the front pages of many a newspaper this week (before we all got caught up in politics again) were headlines about UK rail operators who seem to have found a rather ingenious way to increase revenue with very little effort. By reclassifying what “peak time” means and extending the hours covered by these higher-priced tickets they have really been able to make the most of their existing client base – though at times a little too exuberantly!
Now, it´s fair to say that there are people out there who are none too pleased about this, and with some journeys now costing four times the price they did previously we can see why. But there´s no denying that to increase prices is an effective way to increase revenue in many instances. In fact finding ways to increase revenue through their existing customers is one of the fundamental strategies by which we assist our clients to push their businesses forward to more profitable futures.
The theory is simple. It costs a lot of money to gain new customers through PR, advertising and other marketing tools, so why not make the most of those you already have? Customers who are loyal buyers of your products or services and who could be persuaded to contribute further to the growth of your business are often under-utilised, and this is something that we seek to address. To increase revenue from your existing client base you should consider these three opportunities. They work well individually, but even better when all three are taken up together:
1. Review your pricing structure
Just as the UK rail operators have recently attempted to do, you must discover the optimum price for your products or services. Of course you may be thinking that if you increase your prices people will stop buying from you, so how could this mean you´ll increase revenue? Well, as any accountant will tell you it´s about finding that magic price where even if you lose a few customers your turnover will still go up.
As you´ve probably heard before, price is not the only factor that affects a purchaser´s buying decision, and for some products and services it comes quite far down the list. No matter what you charge now or for how long you have been charging it, there is probably room to review your pricing structure.
The other thing to remember is that what people are prepared to pay is dependent on numerous transient factors such as trend, taste, your company´s corporate identity, political and economic conditions, and so on. So if you are selling to an ever-changing market, surely your prices should be able to reflect this?
2. Up-selling to your customers
Another way to increase revenue is to initiate a policy of up-selling. This is where your sales people fully exploit a customer´s budget to offer them more profitable sales than they may have initially considered, or to always include peripheral elements that will push the purchase price up.
An example of this would be when a customer of an online watch retailer researches a particular brand of watch on the site and is automatically provided with details of other more exclusive options. This costs very little to set up, but if a reasonable percentage of buyers go for an alternate purchase that provides a greater profit, it is certainly a worthwhile strategy.
Further ways of up-selling could be to sell that customer an extended warranty on their watch or to offer a chic box for those buying the item as a gift.
3. Cross-selling to your customers
To increase revenue through cross-selling is very similar to the solution of up-selling except that here you expand the sale by the option of additional purchases from other parts of the same business.
An example of this would be an accounting firm who have been asked to provide management accounting services also recognising their client´s need for a good tax accountant. Services such as support, installation and maintenance are all cross-selling opportunities that should not be missed.
We may be starting to see the light at the end of the very dark recessionary tunnel, but companies need to realise that before they start considering investments in marketing campaigns, PR or new sales teams, they should consider the gold mine they are already sitting on. The efficient and effective utilisation of existing customers to increase revenue is something that is quick and simple to implement and can immediately start paying dividends. Can the same be said of any other revenue generator?
To discover how Incisive Edge will increase revenue for your company email email@example.com or call 0843 289 7884 .