Is Your Business Wasting Money On Advertising By Leaving Revenue On The Table?
The main obssession for literally every business in the world revolves around the generation of more revenue. For most business owners, the solution to this vexing conundrum is usually pretty straightforward – more or better marketing.
While that can be true in most cases, are you as a business owner guilty of ignoring a ton of revenue lying untapped in your business?
There could be many opportunities towards consilidating your current revenue streams without having to spend a single pound in marketing or without having to look for more customers, all you need to do is look in the right place.
One approach that has always confused me is the near constant obsession with finding ‘new business’. Surely maximising one’s own business operations can also provide business owners with the answers they are looking for.
More marketing means greater funds need to be directed towards your advertising efforts to generate leads and interest. Now, this can prove to be complicated if your business is currently experiencing a cash crunch (which could be one of the reasons why you are on the lookout for more business).
Bank loans or alternative finance providers will have to be considered to pursue this option further. This solution is pretty straightforward in terms of execution.
Spend more money to get more business. Alright, maybe not completely straightforward, but you wont have to be bothered with detailed planning sessions to set the wheels in motion.
Alternatively, generating greater revenue from untapped resources within your organisation is not as straightforward. It might not require a lot of capital, but it does involve detailed planning, evaluation, strategising and execution. Your probably already thinking,” who has the time for that?”. Many internal revenue generating opportunities result from the following:
- Operation ineffeciences
- Insufficient training
- Absence of managerial oversight
On paper this issues might seem too cumbersome to resolve leading to many business owners prefering to go down the ‘spend more money’ route.
Every business needs to always be looking for opportunities to maximise their revenue streams, but its equally important to look within your business and find out opportunities to generate more leads and revenue through the customers and leads your business currently has.
Listed below are some usual areas where businesses are prone to leaving money on the table.
It is important to consider your existing customer pool as your biggest source of extra revenue. You have already established a relationship with them and they have clearly displayed their willingness towards spending money on your business, why not make the most of it?
It is very likely that your existing customers could be unaware about other products/services offered by your business and it is your responsibility to bridge this gap of communication. So, start by identifying additional products or services your current customer pool might be interested in. You could also offer add-on services to products you have already sold to them.
For example, if you have sold a HVAC system or a generator, you could offer your customers an additional annual maintanence contract to go along with it. Now, look at customers who have purchased these products previously and determine who you can provide the same service to.
If customers purchase replinishable products from you, it would be wise to identify when they will be looking to re-stock. By offering discounts through timely reminders you can entice customers to visit your establishment more regularly. If you could turn the bi-yearly visits from a customer on average to more frequent visits, imagine how much your business stands to gain from that?
Be it referrals or more sales, target your existing customer pool to identify opportunities and to generate greater revenue.
Have you ever wondered why supermakets are stocked with magazines, bevarages, small ticket items and candy in almost every checkout lane? Its because these items are usually impulse purchases and therefore most likely ignored if it were sitting in front of customers. This leads us to a question. Are you maximising your sale possibilities? Training your employees to offer customers with complementary services or products at the point of sale can be a great way of making most of each sale.
If your firm sells swimming pools, you could also offer add on services like a pool chemical package (discounted of course!) at the point of sale. Or you could offer heaters, pumps, filters etc. at the time of purchase, products your customers might be needing anyway, but might not know to ask unless you bring it to their notice. If you run a bake shop, you could incentivise people to buy by the dozen by offering discounted rates or extra pastries. This might tempt a customer looking to buy 6 pastries into buying a dozen pastries.
Always think if it is possible to bundle extra services or products at the point of sale to increase your average sale size. More importantly, the easiest time to make a sale is when someone is about to make a purchase or has already made one.
If your current lead conversion rate is dismal, increasing your marketing expenditure to combat the problem may ultimately prove to be an exercise in futility. You will have to first identify your conversion issues and then look to solve them before you decide to invest further in your marketing strategy.
Lets assume for a moment that you have decided to plough ahead with a new marketing startegy instead of fixing your conversion issues.
The number of leads you have received over the past year has doubled owing to the new marketing strategy, but your conversion rate has remained constant. Morever on close inspection you have identified that most of your sales are a result of existing referral business or old leads.
How effective do you think the new marketing strategy has been for you? Do you think it was worth the investment? Remember throwing money at the problem is not always the solution.
Therefore, pay close attention to your sales and conversion process and look to identify and plug potential leaks.
It might be more complicated to execute, but if you manage to increase your conversion rate by even a few percentage points, you will be surprised at the effect it has on your bottomline.
Hopefully these ideas will help you to generate greater revenue without having to pay more on advertising to drive in new customers. It might take a little more time and effort short term, but it can have a huge impact on the long term health of your business.