Five Ways to Make Your Business More Profitable

Business owners should constantly look for new ways to generate more sales. They should look for the next marketing technique that can take their profitability to the next level. Here are things to consider:

  1. Generate more leads: This is quite obvious. Leads are the lifeblood for many business, A lead occurs when someone contact your business to inquire about your new product and service. You can generate more leads by directing marketing and advertising money into the right area. When someone is calling your business, make sure that you ask how they found out about your products and business. This will allow you to direct money into marketing and advertising efforts, so you can derive the best possible results. As an example, advertising in the local paper could bring more results, if your target audience regularly seeks information in local newspaper.
  2. Improve conversion rate: There’s no use of having a lot of leads, if you poorly convert them into real sales. If you have a bunch of leads, you need to follow them up, bt contacting them. It’s simple to calculate your conversion rate. If ten people call you each day or come to your store and you manage to secure five transactions, then your conversion rate is 50 percent. There are methods that you can choose to improve your conversion rate. You should constantly test and measure. Try to define your marketing process and identify how to train your team in the best possible way.
  3. Encourage customers to purchase more: Other than looking for new customers, you may also encourage existing customers to purchase more products or use more of your services. Some customers could buy more if you encourage them. You may consider that you have good results, if each consumer purchases more from. You may achieve this by offering a whole range of relevant and related products or providing one-stop services. Instead of looking for products or services from others, they can buy from you.
  4. Encourage clients to increase expenditure: It is also a good indication if you can encourage people to spend more on your products and services. As a baseline, make a simple calculation of average dollar spent per customer. You can do this by dividing revenue with the number of customers. Train the marketing staff and salespeople to cross-sell and up-sell your products.
  5. Improve margins: You can improve profit by increasing your margin. If your profit is $25 from $100 of sales, your margin should be 30 percent. However, be careful when calculating your margin, because you need to take out costs first. It is a good idea to focus on selling your services and products that have bigger margin. So, try to introduce more high-margin products into your catalogue. If you can increase the total margin by 10 percent, it means that you will boost your profit significantly. So, if your original margin is 25 percent, getting an extra 10 percent margin would be a 40 percent growth in profit!
More Stories
Balancing the Scales of Work and Study