While the rest of your friends and colleagues may be hemming and hawing about how bad things are in your industry, smart entrepreneurs are quietly calculating not only how to thrive in these times but dramatically increase their incomes as well!
And it’s not complicated either. For example, when I coach with clients, one of the first things we do is sit down and look at their current income streams — what they are, what kind of money they bring in, and with how much effort.
From there, we look at several ways to increase their revenues from these streams alone. For the purpose of this article I’ll share five with you.
1. Raise your prices/rates.
Most entrepreneurs – and especially solo-preneurs – grossly underestimate what we marketers call “price elasticity”. That is, how much they can raise their prices and/or rates without losing business.
Warning: This is completely contrary to what you think you should be doing right now — lowering your fees!
One of my Platinum Mastermind members, a Canadian coach who works in a particular niche, resisted raising her rates for months. Finally, she agreed to raise them and even DOUBLE them. She found that not only did she not lose business, but she gained better clients as well. Now she’s making the same money in half the time, leaving her many more free hours to develop information products for passive income.
For a year or two I sold my “Boost Business With Your Own Ezine” system online for $197. It sold pretty well , but I realized the information contained was worth much more. After I raised the price to $497, it now converted even more sales! The key here is to track and test for yourself.
2. Boost your transaction size.
Ladies, don’t you find it amusing when you’re at a fast food joint, doing your best to get a healthy salad, and the teenager at the counter brainlessly asks if you’d like fries with that? This is called “up-selling”, and it’s an easy way of increasing your transaction size.
I just returned from a trip where my hotel automatically billed me a “resort fee” of $20 a day. Not a huge addition to my room rate, but look at how that adds up for the hotel: If they have 500 rooms, they make an additional $10,000 a day, and that’s an additional $3.65 million each year!
You can do this in your business too! Use your shopping cart system’s up-sell feature to offer additional products or services that complement what the customer is buying. Ideas: a special report, resource guide, workbook, audio program, or laser coaching session. Or offer a special “bundle” price if they purchase more than one product or service at a time. And lest you think these tactics are only for widget-sellers, I’ve seen this work for everyone from cosmetic surgeons to accountants.
3. Increase your net.
I’ll admit it took me several years after I first started my business to understand the important difference between gross profits and net profits. Today I track every product and program in my business separately for both income and expenses – including administrative time. While all this tracking takes time and effort, a quick report instantly tells me which offerings are truly bringing in the big bucks… for keeps.
A few ways of increasing your net are:
* upping your selling price
* lowering your expenses for marketing, sales, and product/program delivery
* culling products/programs that don’t bring in the profits you want
* spending more time marketing and selling the products/programs that DO bring
in the profits you want!
4. Increase your customer value.
Generally, when you look at your entire customer or client base, there will be a percentage who are your BEST customers and clients. They adore you, buy whatever you come out with, and are happy to pay your fees. This goes along with “the 80/20 rule” — a good 20 percent of your current customers or clients likely brings you about 80 percent of your revenues!
Once you identify this portion of your list, why not create special offerings just for them? Either at a higher price point or delivering a more exclusive level of service. And, very important: Analyze who these folks are, and fine-tune your marketing to attract more of them!
5. Fine-tune your frequency.
You’ve been seeing many membership/continuity programs around these days, and it’s not just because they are a wonderful way to deliver information or products. It’s because smart business owners realize they can gain multiple sales from ONE purchase transaction instead of going back and trying to get folks to buy from them again and again.
Here’s how it works: Jane or Joe buys into your monthly membership or widget-of-the-month club, and that one purchase gains YOU recurring income. You saw the start of this trend years ago with book-of-the-month clubs and today it’s the most popular way to sell beauty products via infomercials as well. Proactiv, Youthful Essence, and many of those beauty products sold on TV enroll you into an autoship program. (I know, because I’ve tried many of them!)
So think about how you can develop one continuity or membership program to continually funnel new members into – versus having to sell your prospects over and over.
First, Just Be Aware.
If you are just working day by day with your nose to your desk, or with clients nonstop, you won’t have time to even be aware of your current financial situation, let alone opportunities to improve it.
Step one is taking a half day or so to review your current income streams as I described above, and look for ways to apply these five revenue boosters!
Have you implemented a strategy that has increased YOUR revenues? Please share below!
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© 2012 Ali International, LLC
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“Entrepreneur mentor Ali Brown teaches women around the world how to start and grow profitable businesses that make a positive impact. Get her FREE CD “Top 10 Secrets for Entrepreneurial Women” at www.AliBrown.com.”