Sales and profitability are essential to the success of any company. Without sales, a business cannot generate revenue, and without profitability, a business cannot sustain itself.
Yet, increasing them can be a challenge.
The good news is that there are a number of strategies businesses can use to increase sales and profitability – starting from adjusting their pricing strategies and increasing customer engagement. The goal is to find the combination of methods that work best for your business growth and customer retention.
Your marketing and advertising campaigns can do wonders for boosting sales, just as much as your product or service quality. It all depends on how you execute them. The following are some strategies businesses can use to improve sales and profitability.
Have a Clear Goal
This goes without saying. If you want to increase the sales and profitability of your business, you need to have a clear goal in mind. But what does that mean? What is a clear goal?
A clear goal is something that is specific, measurable, attainable, realistic, and time-bound. It cannot be open-ended or vague. For example, “I want to increase sales by 20% in the next quarter” is a clear goal. “I want to make more money” is not a good example of sales efforts.
Setting challenging but achievable goals will give you something to strive for and help you stay focused on what is essential. As long as they are clear, you will be able to develop strategies and action plans that will help you achieve them.
Devise a Plan
Having set your goals, you need a plan to achieve them. This plan should be comprehensive and cover all aspects of your business you may want to boost sales with, from the marketing strategy and advertising efforts to product development and customer service.
The details of such a plan will depend on your business, but there are some key elements that all effective plans should have. These include:
- A clear overview of what you want to achieve and why,
- Specific goals and objectives that are measurable and time-bound,
- Strategies and tactics for achieving your goals,
- The budget and timeline.
Track Your Progress
As you implement your plan, it is vital to track your progress. This will help you identify what is working and what is not so that you can make necessary adjustments along the way.
Sure, you should track your sales and profitability. But it would be best if you also tracked other KPIs that are relevant to your business, such as web traffic, conversion rates, or customer satisfaction – all of which can have an impact on how successful your plan is.
Develop a Strong Brand Identity
Unless you are a manufacturer of some essential product, chances are that your customers have a choice regarding the products or services you offer. In order to increase sales and profitability, you have to make sure that your potential customers pick your brand over your competitors.
Doing so starts with creating a solid brand identity that differentiates your company from the competition. Your brand identity encompasses everything from your logo design and company name to your color palette and tagline.
It should be carefully thought out to ensure that it accurately represents what your business is all about and resonates with your target audience.
Amplify the Perceived Value
You need to find ways to make your potential customers believe that what you are offering is worth more than the asking price, even if the competitor pricing is lower. This is hard to achieve without a strong brand identity – maybe there is something you can capitalize on?
For instance, many companies now target environmentally conscious consumers by offering products or services that help them save the Earth. Others focus on providing a premium experience or customer experience that goes above and beyond the call of duty.
Whatever it is that makes your company unique, make sure to play it up in your marketing and advertising efforts.
Invest in Your Team
Even though it may seem that customers are the main focus of your key strategies, it’s important to remember that your employees play a significant role in the company’s overall success. After all, it is your team that will be executing the business processes.
So, if you want to improve sales and profitability, make sure to invest in your team as well. Introduce new sales engagement methods, provide training opportunities, offer incentives for reaching goals, and so on.
Doing so will not only improve employee satisfaction within your business but also make your team more effective, which will, in turn, lead to increased sales and profitability.
Increase Your Profit Margins
Profit margin is a key metric for any business – it is the difference between your revenue and your costs. The higher your profit margin, the more profitable your business will be.
That said, you probably want to increase your profit margins, and adjusting your pricing is an effective way to counter any sales slumps and boost your bottom line. It may be a good idea to test different strategies with a small group of customers before rolling out any changes to your pricing structure.
Adjust Your Pricing Strategy
You can’t just increase your prices to whatever you want, however. You need to consider what your competitors are charging, what your target market is willing to pay, and what impact the price increase will have on your sales volume.
Conducting such a competitive analysis will give you a good idea about those metrics. Then, you can implement those changes and track their effects on your customer base and sales revenue.
The goal is to find the perfect balance between what you need to charge to be profitable and what your customers are happy with.
Target Profitable Customers
Apart from the pricing, the type of customers you’re targeting can make a huge difference in your profitability. Not all consumers are created equal; some will be more profitable than others. For instance, former and repeat customers are generally more valuable than one-time buyers.
Thus, if you have noticed in your sales data that there is a large number of existing customers who keep buying the same product or service from you, think about cross-selling or up-selling to them. Although you will earn a little less on paper, you will be able to increase your customer lifetime and, in turn, ensure more sales and more revenue from that relationship.
Interact with the Customer Base
Marketing your business to a larger audience is important, but you also need to focus on your existing customer base. After all, they are the ones who have already bought from you and are more likely to buy from you again – or, more importantly – recommend you to someone else and bring in new customers.
There are several ways you can interact with your customers, from sending them newsletters and special offers to conducting customer surveys. The key is to keep them engaged with your brand so that they think of you when they need a product or service.
Gather Customer Input
Needless to say, input is crucial for accurate development of any kind. It allows for a deeper understanding of people’s needs and wants, leading to more successful marketing efforts. After all, who else would know better what the customers really want if not the customers themselves?
The simplest way to gather customer input is to ask for it. It can be done through surveys, post-purchase interviews, or even through monitoring product reviews. You don’t have to address every single concern, but if you notice a pattern, it might be worth investigating.
Using social media is a powerful way to reach out to new potential clientele while also staying in touch with your loyal customers. Pick the right platforms for your business, create engaging content, promote sales, and remember to post regularly.
Make sure you are active on social media and interact with your followers on multiple channels. Respond to their comments and queries in a timely manner. This will show that you care about your most profitable customers and are interested in what they have to say.
It may not be the most lucrative method on this list, but it definitely will help you establish your position in the market.
Offer Incentives and Discounts
As mentioned above, sometimes lowering individual prices can increase your profit margin in the long run. For instance, you can increase the price of one or two products just to drop the price later with a -30% sale. Sales psychology works in mysterious ways, but it is common knowledge that people are more likely to buy something when they see a discount.
Take a look at what your competitors offer and try to gain an edge by providing more aggressive discounts. You can also create loyalty programs to encourage customers to keep returning or provide free shipping to sweeten the deal. Such incentives can make a big difference in your profit margin.
When it comes to holidays, rarely does it happen that businesses don’t make an effort to cash in. The reason is that people are more likely to spend money on gifts and other holiday-related items.
Think about offering unique holiday deals, whether it’s a percentage off their total purchase or a gift with purchase. When undecided customers embark on a shopping spree, you have to catch their attention and give them a reason to shop at your store.
Christmas and Black Friday are the two staple holidays when it comes to increased sales, and for a good reason. They bring in a lot of revenue, incomparable to any other time of the year. So, make sure to come up with something special this November!
Alternatively, you can turn to a more individual approach and offer personalized deals to your customers. Thanks to technology, this is now easier than ever before.
For instance, you can send out emails with personalized discount codes or set up a pop-up on your business website that greets the user by their name and offers them something they would like – based on their previous purchases.
This way, you can target your audience more efficiently and make each customer feel special, which can do wonders for improving the profitability of your business. And thanks to modern CRM systems, it all can be done automatically.
Create a Sense of Urgency
Sometimes you want to get rid of the old product or service series before introducing a new line. In such cases, you can create a sense of urgency among your current customers by running a “last chance” or “while supplies last” promotion.
When customers see that an item is about to run out, they are more likely to buy it, even if they weren’t planning to. Scarcity is a powerful psychological trigger, mainly due to the fact that people always want the things they can’t have – and since they are about to run out, more customers decide that it is better to buy them now.
Find Opportunities to Increase Business Profitability
Increasing sales by implementing large marketing campaigns and selling new product lines is not always an easy feat. Fortunately, you can also focus on smaller opportunities that will have a direct impact on your business profitability. The goal is to identify areas in your company where you can cut costs or increase customer satisfaction.
You may find that your business can be more profitable by implementing even small improvements like:
Bundling and Up-selling
As a conscious buyer, you may be annoyed by constant up-selling and cross-selling attempts. However, from a business standpoint, they can boost your sales significantly, which is why it’s worth considering these strategies.
Adding Complimentary Services
Following the spirit of bundling, you can also add complimentary services that are relevant to your product. For example, repeat customers of a pet food company may appreciate the addition of dog-walking services.
Offering Delayed Payments
There’s nothing worse than having your credit card declined, so offer your customers the buying power with the option to pay later. This way, you can still get paid while they don’t have to worry about finding the money upfront.
Growing Your Reach
Once you feel like you have done your utmost at getting every single customer in your current market, it may be time to expand. This could involve targeting new demographics or even expanding to new markets altogether.
Reviewing Your Supplier Contracts
As such, it’s always a good idea to review your supplier contracts regularly and see if there are any areas where you can cut costs. Lowering your expenses will have a direct impact on your business profitability, allowing you to lower prices at the same time.
The goal of improving sales and business profitability is to find the combination of strategies that work best for your company. Implementing the right mix of tactics and strategies can help you achieve your desired results without breaking the bank.
While some, like reworking your pricing strategy, can have an immediate impact on your sales and profitability, others, like developing a solid brand identity, may take some time to show results.
Whatever route you choose, remember that the key is to have a clear goal in mind – only this way will you be able to put it into action and see tangible results. So, what are you waiting for? Start boosting your sales and business profitability today.
Manager with experience in leading team of software developers and testers during implementation of internal and external IT projects.