Why More Customers Isn’t Always The Answer (And How To Really Boost Revenue)
Want more revenue? Getting more customers isn’t the only answer.
There’s an epidemic in marketing right now. In business.
It has to do with decision makers focusing on very specific parts of their marketing and sales strategy… and ignoring the rest.
Lopsided sales funnels, in other words.
It’s undoubtedly costing businesses millions of dollars they should otherwise be making (I’ll explain how in a second).
The main culprit of this problem?
Well-intentioned advice.
There’s so much of it out there. Telling you how to make more money. How to generate a bigger number on that all-important bottom line.
Thinking about it all might make your head spin. But here’s the thing…
When it comes to revenue, I always remember something that Jay Abraham, a far more brilliant mind than mine, said…
“There are only three ways to generate more revenue.”
Not a hundred. Not a thousand.
Three.
Increase the number of customers. Increase the size of the average transaction. Or increase how often they buy.
That’s it.
Makes things a little simpler doesn’t it?
And each one of these “avenues” holds INCREDIBLE potential and are of NEARLY equal importance.
The problem?
Most Advice Just Tells You How To Get More Customers…
That’s not a bad thing.
It’s the most essential of the three.
After all, without customers, it doesn’t matter WHAT you’re charging or how often they’re buying.
But think about how much you’ve read about getting that conversion rate up. About turning your site into an SEO machine. About PR. About “buzz.” About keywords.
That’s all about getting more people buying.
Which explains why MOST companies out there have a completely lopsided focus on revenue. They get tunnel vision on the “how many” instead of the “how much” and “how often.”
But here’s the cool thing. That means there’s TONS of room for improvement.
Because outside of mass consumer products…
It’s Easier to Generate Revenue By Focusing On Pricing And Frequency.
Ever wonder how these random B2B companies you’ve never heard of get revenue numbers in the 9 figures?
That’s how.
Some might have only a few clients… but boy, do they pay. Often.
Everyone’s heard of Dropbox. Fewer have heard of Box.
It has a lot fewer customers. It’s in the news a lot less. It’s B2B, not consumer-friendly.
But Box is hitting revenues of $506M annual, while Dropbox is struggling to break even.
That’s because if focuses on quality rather than quantity.
And you know, I get it.
Focusing on a few high level clients instead of mass market appeal isn’t exciting.
But it’s a fantastic way to establish a niche.
And if you want to try that approach, you’re in luck, because…
There’s An Easy Fix To An Unbalanced Funnel…
Switch priorities.
Chances are, you’ve already done a heck of a lot to get yourself more customers…
So it’s time to focus on retention.
By doing so, you’ll increase the frequency of purchase (especially if you’re on a subscription model).
The biggest mistake people make?
Spending more time acquiring new customers than trying to keep their old ones!
Not only is acquiring new customers five to 25 times more expensive than retaining your current ones…
Existing clients are more valuable in every way.
In nearly every test that’s been run…
They’re more likely to buy again. They’re more likely to rate you highly. And you’ve already spent the money to acquire them!
In fact, I can tell you right now…
Most Existing Client Bases Are Untapped Gold Mines.
Outside the random email, they are essentially ignored.
Be different.
There are a few ways to make the most of your existing base.
First, act like you’re actually happy to have their business! Communicate with them, express your gratitude. Ask if they have problems you can help with and follow through.
You can also utilize them as a source of referrals — especially the more you work with them.
I’ve found organic and paid traffic to be similar in quality — but referred leads generally beat the pants off any other source in nearly every metric.
Moreover, you can upsell them on better products and services… and they’re far more likely to buy.
That’s why smart marketers treat their client list like the briefcase containing the nuclear codes.
Besides increasing the lifetime value of every customer and increasing the frequency they buy, you can also work on boosting how much they’re spending PER transaction.
No, I’m Not Telling You To Just Raise Your Prices.
Though in some cases that’s exactly what you SHOULD do.
There are certain industries that are chronically underpriced.
But the better way to get your customers to spend more is by delivering superior value. To give them a premium level they’ll be HAPPY to pay more for.
Surprisingly, most businesses only offer one tier of pricing for a product — especially a consumer one.
This is a huge mistake.
People like choosing their pricing and getting exactly what they need. Selling premium products for higher prices opens the door for a group of buyers that would otherwise not even bother.
It also lets people who WANT more to pay for it.
Plus, you have to think…
How can I make my product stronger? What can I offer that will definitely improve the buyer’s life in some way?
If you were selling eBooks, you might add in premium charts, spreadsheets, workbooks, or apps that go along with the material.
I’ve seen base eBooks sell for $12, with the premium packages going for ten times that. Successful ones.
Be creative.
For a set of weights, for instance, you could also offer membership to an online group with fitness trainers. Or a digital cookbook that shows protein-packed recipes.
Basically, work on adding value to your product in ways that will make you more than it’d cost you.
The possibilities are endless, and…
I Haven’t Even Scratched The Surface.
Suffice to say, the strategies and tactics you can use to increase frequency and transaction size are just as varied as for front-end acquisition.
And just as with that leg of the trifecta, the rewards can be incredible.
Take some time, evaluate your sales funnel, and consider whether you’re over-focused on one area or another. Most companies are.
And if you find you are?
That’s not a bad thing.
It means you have a bunch of low hanging fruit that’s just waiting for you…
So get to picking, will ya?
Read this far? A favor, if you would…
Whether you agree with what you’ve just read, or just want to explain to me how utterly WRONG I am…
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This is the totally shameless tip jar on the counter… and my end of article call-to-action (because I try to practice what I preach).
Originally published at https://numberglutton.com.
