7 Ways to Make More Profits from your Existing Product or Service
Best Practice / Marketing
7 Ways to Make More Profits from your Existing Product or Service
Donald Pillai, Member, Business Consultant, South Africa
Seven Underrated Skills That'll Make You A Rockstar Business Owner.
1) Raise prices
Raising prices is probably the best and simplest way to increase total profits. In many cases, you can literally just increase your price point and watch your profits increase as well.
This is because pricing (the most important factor in business) is what economists call “elastic.” In principal this means that doubling your price won’t necessarily result in you losing half your customers. You will in most probability lose less than half but you will most certainly increase your total revenue. Similarly, if you cut your prices in half, you may not double your total customers.
The way demand and pricing are related will depend entirely on your specific product and situation. How much pricing power you have is something you’ll need to find out for yourself by experimenting and of course prior negotiation with your supplier.
Before you make a decision, or if you do decide to raise prices you must do so based on some customer research or evidence that people might be willing to pay more on average. Don’t just wing it.
And finally, if you raise prices, use the increase event itself as a reason to drive more sales leading up to the pricing change. Tell people they have until X date before prices go up. This is a great way to drive a nice bump in your profits.
2. Run a sale / special promo
You can experience your biggest income month after month by a large margin.
How did you pull this off?
Simple. Run a week-long sale on annual memberships, discounting them by around 25%.
A few hundred people will take advantage of the very rare chance to get a discount on your already incredibly inexpensive membership offer.
A sale can be a great way to get customers to take action now and finally get around to trying your product. Customers who are on the fence sometimes need a gentle push, and a discount can be an easy way to provide that bump.
You don’t have to run sales all the time but your event must be so rare that it will attract attention and your audience will notice it straight away.
If you haven’t ever offered a sale then here’s a good chance to show how a simple time-limited discount could lead to your biggest profit month ever.
Be aware that constant promotions can devalue your product and hinder your ability to sell on an on-going basis. Promotions can be so very addictive and you have to be very careful.
On the other hand, products many of us know and love rarely offer discounts, which preserves the brand and people still make on-going purchases without waiting for elusive discounts.
3. Cultivate conversions from existing traffic
If you have a steady flow of potential customers visiting your website, you can increase revenue by converting more of those people to buyers.
How do you increase conversions?
Most times it’s as simple as finding a more effective headline for your home page. Headlines are always a great place to start because they’re high-leverage changes. Want to know more about creating highly effective headlines? Visit www.robustmarketing. Co. Za contact page and send your request
4. Improve Customer Average Lifetime Value
Customer average lifetime value (LTV) is the amount an average customer is expected to spend with you in total.
Raising prices would increase your LTV. Offering a discount would not.
If you offer a subscription-based product or service, you can increase your customer LTV (and thereby your long-term total profits) by increasing how long a customer buys from you.
The best place to start trying to increase your customer lifetime (reducing “churn”) is usually through something known as “activation” (basically getting customers to actually use your product).
By the way, if your product is a one-time purchase as opposed to a subscription offering, activation still matters. By getting customers to use your product and experience the value you promised you can reduce refunds, which will increase your total products.
Activation isn’t the only way to improve customer LTV. You could also offer upgrades or add-ons, or you could split your product into multiple packages. If you can find a way to bundle three packages as an exciting offer you will be well on your way to selling more products and services and make more money than ever before.
5. Attract new potential customers
So now, we get to what most people probably think of as the primary strategy for increasing revenue: attracting more potential customers.
This strategy can certainly be effective, and it should be your main long-term approach. However, it takes much more effort to grow your audience than it does to take any of the four previous steps already mentioned.
You probably already know the main strategies for attracting more potential customers. The two most effective really usually come down to partnerships and content marketing.
This is a strategic manoeuvre and will regularly rely on both partners and content marketing. It is important to work with other sites and businesses in collaboration to offer your products and services to their people, usually in exchange for paying commissions on sales or any other form of incentivizing to endear the collaboration. You can also spend more time blogging and podcasting on reputable sites that top of the pop sources of new customers. Partnerships as a group is the top three sources mentioned here.
If you want to rely on attracting new customers to grow your profits in the short-term you should focus on tapping into existing audiences. For long-term solid results you must look to content marketing.
6. “Automation” as a strong way to have continuous SALES
If you're growing an email list anyway (which most of us are or at least should be) then set up some sort of auto responders, automation, drip campaign, whatever you want to call it so that every single person that subscribes to your list eventually (not necessarily right away) gets a chance to learn about and purchase your product.
7. Sales Funnels
I would also like to add that tightening or creating simple sales funnels will do wonders for on-going sales. Think of the "prerequisite" baseline knowledge needed in order to take the product or service, package that up and give it away for free. In the process you're showing people your products/services/content and the value you can bring. And just as importantly, you're prepping people for the real deal product/service. I think landing pages and email courses (with a strong call to action on the final day) is the easiest way to do this.
Now that you know our top seven strategies for increasing your profits for an existing product, evaluate your options and think about your goals.
Are you looking for a quick fix but unsustainable bump in revenue? Do you care more about the long-term?
I’ve given you plenty to think about. Now get to work:)
How would you feel if you get hordes of traffic to your website?
Can you imagine having more paying customers than ever before?
What happens when you take a deep breath and think of something that really makes you happy?
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