Three strategies small businesses can use to increase revenue
Consider these three time-tested strategies for increasing your revenue
Thanks to the healthy economy, some consumers have extra money on hand and are more willing to spend it. U.S. consumer confidence is at highs not seen in well over a decade. As a local business, this can provide you with an opportunity to increase your profits and expand your business.
How can you help make sure some of the confident consumers spend money with you? Consider these three time-tested strategies.
- Bundle products
If you sell complementary products or services, selling them as a package at a discount could increase your revenues. This is a tried-and-true tactic in both the retail and restaurant industries, but it can work in almost any business. Customers like the feeling that they’re getting a good deal, and selling a package could encourage them to spend more than they were originally intending to spend on something with a greater perceived value.
For example, the owner of an independent hardware store might identify spring gardening tools as a sales opportunity. She decides to bundle a garden tool set with a garden hose and a bag of all-purpose topsoil, offering a 25% discount on the package. Her in-store display promotes the bundle as an all-inclusive kit for the spring gardening season. As a result of the bundle, she is selling six to eight different items at a profit to customers who may have visited the gardening department intending to buy one or two.
- Participate in coupon programs
Coupons are a time-tested, low-cost marketing tactic that can effectively increase revenue. Small businesses can find coupon programs beneficial in attracting new customers and encouraging repeat business.
Once you’ve decided to offer coupons, the next step is to decide where to feature them. These days when everyone is online or on their smartphones, one might assume paper coupons are less popular. Not so! According to AYTM Market Research, 79% of coupon users say they regularly use paper coupons, 47% use coupon codes found online, 38% print out online coupons and 25% use coupons on their mobile phone. While you can certainly focus on one channel, consider using multiple channels, and in fact, many coupon vendors can help you deliver coupons both in print and online.
How do you develop a coupon? The first step is to keep the offer simple; for example, “20% off,” “$10 off a purchase of $50 or more” or “Buy one get one free.” Follow it up with a strong call to action. The customer should immediately know where to go to buy it and when the offer expires.
The next step is to design an attractive coupon. Your company may already partner with a marketing firm or design professional who can design it for you. But if not, you can design it yourself with a simple online graphic design template like Adobe Spark. If you’re working with a coupon vendor, they may have their own design capabilities or specifications to follow.
Now it’s time to distribute your coupon. Valpak can distribute your coupon to your local area through direct mail and a website. Do you want your coupon in grocery stores? IndoorMedia.com provides grocery store advertising for small businesses. How about your local paper or a local magazine? Visit their website and look for the link to advertiser information. Alternately, most newspapers and magazines will have a phone number you can call for immediate assistance.
You can distribute online coupons yourself without a vendor. If you have a database of customer emails, email marketing services like Constant Contact or MailChimp make it easy. You can also distribute coupons through social media. Facebook has a user-friendly way to design and distribute coupons to your followers, and you can also distribute coupons in your Facebook marketing campaigns. Twitter also lets you distribute coupons this way.
Many popular websites are specifically designed to help you distribute coupons. Coupons.com is all about printable coupons, and they also have a mobile app. Yelp.com is based on user reviews of small businesses, and allows the businesses to distribute online coupon codes. Groupon is a “daily deals” website distributing online coupons to members based on their local area. This is a very popular website, and with their purchase of LivingSocial.com, they’re still growing. They also have a mobile app for customers.
- Enter into a cooperative marketing agreement
A cooperative marketing agreement is when two or more companies, organizations, or institutions agree to combine their sales and marketing efforts. Companies enter into these agreements to lower their individual risk, share monetary and knowledge resources, achieve wider visibility with less investment, and provide convenience for their customers.
This could be as simple as two companies agreeing to market and sell complementary product lines together. Or it could be as complex as dozens of businesses in a region or an industry collaborating on a national marketing campaign.
Examples of cooperative marketing agreements include:
- Farmers, food producers, and the state government join forces in a state famous for its dairy products
- Hotels, restaurants, and attractions in a popular tourism destination produce national marketing campaigns throughout the year
- Independent businesses in the downtown area of a city, and the city government, produce marketing and events for the holiday season
- Beauty spas, hair salons, and health clubs in a city create marketing and promotions for a “health and beauty” month
Resources are pooled by all partners and drawn from to fund efforts. This lowers the investment required for individual companies, while multiplying the marketing impact. Businesses can get their offerings in front of more people at less cost.
How can you join a cooperative marketing agreement? Business groups like your local Chamber of Commerce can connect you with complementary partners and provide information on any existing agreements. Chambers are easy to join and host networking events year-round, too. The affordable membership fee is usually based on the size of your business.
What should you look for in a cooperative marketing agreement? First of all, the intended target should make sense for your business. For instance, a boutique children’s clothing shop may not want to join a tourism co-op, but joining a program for a citywide back-to-school event could be ideal.
Secondly, you should feel comfortable about the investment you are making. The cooperative agreement should be completely transparent about its goals, the contract terms, how they spend money, and what benefits businesses get for their investment. They should also have methods to measure ROI and ensure other goals are reached.
Lastly, make sure you’re partnering with agreeable and fair people who are willing to put the priorities of the group over their own individual agendas.
Choose the right strategy for your business
Though all of the above strategies have an impressive track record of success, they may not all be right for you. Before implementation, check to make sure the strategy works with your business model and cash flow. It’s also important to check on what your competitors are doing, as you may see an angle they’re not pursuing, giving you a competitive advantage.