Revenue Growth Strategy

The income generated by sales for any business can be broken into a simple yet powerful ‘Revenue Formula’ shown below.

No. of Customers x Transaction Value x No. of Transactions = Total Income

Generally, businesses focus on the acquisition of more customers to increase revenue, however, this alone is an incredibly costly and a time consuming exercise.

Rather, if we can ‘optimize’ and ‘maximize’ each customer opportunity (lead), we can more easily increase revenue by focusing on increasing the ‘Transaction Value’ and ‘No. of Transactions’ within the sales formula.

Therefore, before I request my clients to make costly investments to expand their marketing budgets or increase their sales teams with the aim to acquire new customers, I first help my client’s identify ‘low hanging fruits’ that will yield exponential revenue growth at virtually zero expense.

Pareto’s Law (80/20 rule) states that, for many events, roughly 80% of the effects come from 20% of the causes – this is most likely true for your business and can help unlock vast quantities of unrealized profit when leveraged properly.

I help businesses identify the 20% of causes that yield 80% of their most desired results using Pareto charts. Some of the key questions I’ll help your business identify are shown on the right

By answering these questions, we now know who are the best 20% of customers for your business and the product and service they most like to purchase from you.

I then help my clients to maximize their top-line revenue and bottom-line profitability by focusing their efforts and strategies on this 20%.

• Which line of your business generates the most revenue?
• Which line of your business yields the most gross profit?
• How many times on average do your customers buy and over what time range?

• How much should your business budget for marketing?
• How much of that budget should then be spent on digital media, traditional media, events and exhibitions and so on?
• How much time should your sales team spend following up with their leads?

These questions can be best answered by understanding the life-time value of your ideal customer. Once we have determined the best (20%) customers by using Pareto’s Law (80/20 rule), we can then begin to calculate three critical factors:

• How long does your ideal customer stay loyal to your brand (this is their average ‘life-time’ with your business)?
• During your customer’s life-time with your business, how much on average do they spend with you (how much top-line revenue will you receive from them)?
• After all cost of sales have been factored from the top-line revenue, how much is left-over as gross profit that actually contribute to the growth of your bank balance?

This is only a highlight of the basis by how we can tie the revenue goals for your business with your marketing and sales activities so that your business can grow intelligently and profitably.

For example, if your ideal customer (John Smith), stays loyal to your business on average for 1 year, and purchases your product X at an average transaction value of USD 10 at least 10 times, your top-line revenue will be USD 100 per year.

If your business has a gross profit margin of 40% for examples sake, that means your gross profit is USD 40.

If you know each customer will ultimately help your bank balance grow by USD 40, you can then begin to ask yourself, how much of that USD 40 are you willing to re-invest to acquire another new customer just like them (profitably).

The average business that leverages and invests in marketing does not receive the full reward of their actions as they generally miss a critical piece of the sales puzzle.

Especially with B2B sales, although you may be targeting a particular function, seniority or job title within an organisation (your target audience), these individuals still need to take the opinion or even sign-off from other colleagues within their business before you can walk away with a sale. These influencing individuals are referred to as the ‘Decision Making Unit’ or ‘DMU’ for short.

Who are these additional individuals that influence your ability to close a sale? Possibly they’re the CFO, COO, it can even be the Personal Assistant to the CEO – the key is to ensure that you include them in your marketing strategy to better improve your chances of closing the sale.

I have helped many business correctly identify and map their Decision Making Unit (DMU) as well as outline the key psychological interplay that dictates their decision making process.

At the end of the day, a transaction between two people is ultimately Psychology at work. My background in Psychology gives me an additional insight when helping my client’s.

Most marketing and sales executives have an understanding of their required target audience, but they lack the ability to identify the psychological factors that greatly influence their customers buying and retention decisions.

I help my client’s develop ‘Buyer Personas’ which reveal their psychological motivations, and accordingly, help your business develop marketing and sales strategies that deliver the results you need consistently.

• What motivates your customers to search out your products and services?
• Why does your customer choose your business over your competitors (or vice-versa)?
• Why is this customer easy to please (or equally difficult to satisfy)?

With your best customers identified, and your Decision Making Unit mapped, I focus on increasing my client’s average transaction value.

You could just increase the retail cost of your product or service (this is certainly an option as most businesses do not know how to price their offering correctly in the first place and are selling at an rate that is not reflective of their true value).

However, I have listed some powerful operational, marketing and sales strategies that can also help to increase the ‘Transaction Value’ by making your customers buy more.

• Do you actively Cross-Sell?
  Generally, there are means to package other products and services within your portfolio to offer additional value to your customer
• Does your business Up-Sell?
  Your business can probably sell more of your product and service simply by offering more at a better volume rate (more value for the customer)
• Do you offer a variety of Payments Options?
  Some customers prefer to pay more now (for example, quarterly payments vs monthly payments) in exchange for preferential discounts

It is widely understood that the acquisition of new clients can be many times more expensive that retaining your existing customers.

This fact is futher compounded when you take into account the loss of revenue from an existing customer that has not yet realised their true ‘Customer Lifetime Value’ for your business.

I specialize helping businesses of all sizes and industries develop easy-to-deploy customer loyalty programs that decreases customer attritution, enhances customer satisfaction, and ultimately ensures more frequent purchases.

Finally, your ideal customer most likely associates themselves with similar, like-minded individuals that could also be your next potential customer. I will help you business develop a ‘Referral Program’ that ensures a consistent flow of highly qualified leads from your existing customer base.