The Most Effective Marketing Strategies To Increase Revenue

Every business, in essence, is about generating more sales, which will translate to more revenue and profit. However, what actually is the most effective tactics to increase sales? That is actually a very hard question to answer. Part of the problem is that there are many different factors that can affect the answer: the business type, size, industry, and especially, the target customers among others. In this guide, we try to answer this question, and we will discuss all the different tactics that can help you achieve more sales. Without further ado, let us begin.  

The Most Effective Marketing Tactics To Improve Sales

Although there can be many different tactics and strategies to increase revenue, actually there can be boiled down to just four different ways:

1. Raise your product/service prices: arguably requires the least efforts, but can backfire if you are not careful
2. Have more customers: new customer acquisitions will obviously translate to more revenue
3. Optimize the average transaction size for each customer: in short, increasing the customer Lifetime Value (LTV)
4. Encouraging your customers to buy more often from you: again, increasing LTV

So, for the rest of this guide, we will break down each of these methods, and the actionable tactics for each of them. Let us begin with the first one.  

1. Higher Product Price

Raising product/service price will translate to more revenue from each purchase transaction. Yet, your overall revenue will only increase when your sales volume, sales frequency, and transaction size remain the same, or even better, increase. This is where the main dilemma lies: it is a common occurrence that when we increase our price, customers are now more reluctant about making a purchase, and so lowering the sales volume and frequency. So, how can we effectively raise our prices without losing volume, or worse, customers? Here are some key tactics to consider:   Tell Your Reason(s) To Increase Price In general, you shouldn’t raise your price randomly and just hope for the best. You should have a clear reason to raise your prices, and communicate it well with your customers and prospects. This tactic works best especially when rising costs is your main reason. Yet, it can backfire if you are lying about the rising cost and when your competitors are not rising their prices. Make sure to do enough competitive analysis before using this approach. And avoid this tactic when you don’t have any clear reason besides increasing profit and revenue. Optimizing Perceived Value Remember that your customers are not essentially buying your product or service, but rather the benefits they get after the purchase. If in their minds, they can get more benefit from your product after the price increase, they can justify the purchase. So, a great approach when implementing a price increase is to also increase the perceived value of your product. For example, if you are selling Software as a Service (SaaS) product, you can implement a price increase while also introducing a new feature. If you are selling T-shirts, you can release a new, limited-edition design that is more expensive than your usual product line. The downside of this approach is that most likely, there will be a cost increase tied with the new feature you introduce. So, the key here is how you can find the delicate balance between minimizing the increase in cost and maximizing the increase in price. Gradual Price Increase Consider increasing your price gradually to minimize customers’ resistance. Yet, there is an obvious downside to this approach: you will be raising your prices more frequently. Tied to the two previous tactics, it will be harder to explain your reasons to the customers with the frequency of the price increase. A good way to implement this tactic is by also increasing the perceived value gradually with each price increase, which can translate to better cost management. For example, instead of developing and introducing a major feature in your software product, you can introduce smaller features that are cheaper to develop. Multi-Tier Pricing A common approach nowadays is to introduce “premium” products with higher prices besides our main product line. This way, customers who want a more affordable product can still have their options, while those who seek more value can opt for the premium ones. Another advantage to this approach is the psychological phenomenon we know as price anchoring. A $3,000 tuxedo might seems expensive at first, but by putting it besides a $20,000 jacket, customers can perceive it as “cheap”. This is why we often buy a super-sized french fries for $8 instead of the regular size for $7.50. Hey, it’s only a 50 cents difference. Bundling Products By offering product bundles, you can offer an added value to your customers, where we can often charge a higher price compared to the sum of the individual prices of the products. Another approach you can do is to offer the bundle at a discounted price compared to the individual product prices. This way, you can potentially attract more customers that will result in a higher overall revenue.  

2. Acquiring More Customers

This method is fairly obvious: by bringing more people in the door, there will be a direct increase in revenue. Yet, there are two main issues with this method: acquiring new customers can be extremely difficult, especially if you are in a saturated industry. Also, new customer acquisitions can be very expensive, and we can end up losing money if we are not careful. So, these two issues will be our focus here, and here are some tactics to consider: The Right Mindset: Lead Generation, Nurturing, and Conversion You can’t get a new customer if you don’t get a prospect first. Yet, not all prospects will convert into purchasing customers. So, we should first understand that there are three different stages involved in a customer acquisition process: first, lead generation, where you acquire prospects. Lead nurturing, when you nurture the prospects until they are finally ready for a purchase. Last but not least, conversion-focused activities when you finally encourage the prospect for a purchase. So, we should have the right mindset about our customer acquisition strategy: we should carefully plan the required tactics for each phase, optimize them, and maintain cost-efficiency. Content Marketing Content marketing is effective in all the three stages of customer acquisition discussed above. Most prospects are not looking for a product and/or service at first, but are generally looking for information and solutions for their problems. By publishing relevant content for their specific problems and needs, you can get their attention. Content marketing is also an effective way to educate customers in the lead nurturing stage. You can communicate the benefits of your product, and the unique values compared to your competitors’. In the long run, content marketing is also effective in driving conversion. An important thing to remember about content marketing is that content development is just one aspect of the whole process: no matter how good your content pieces are, they will be useless without visibility. This is where the importance of content promotion comes in, and SEO (link) is an especially powerful tactic to work hand-in-hand with content marketing. Email Marketing Even with all the newer, technically more advanced platforms and technologies, email is still one of, if not the best way to communicate promotional messages to customers. According to studies, email marketing still offers the highest of ROI of 4,400%, significantly higher than other marketing channels. The main goal when using email marketing to acquire more customers is to increase both open rate and click-through rate. The idea is, the more people that open your emails and engage with them, the higher the chance to turn them into actual customers. While there can be many different factors in achieving this, in general it’s all about targeting the right audience, with the correct messages, and delivering them at exactly the right time. Fortunately, there are now many different tools that can assist you in this process, automating some of the arduous activities involved. You might want to check out our previous guide on drip marketing/automated email marketing here to help you further. (link) Choosing The Right Acquisition Channels Here is the deal: a marketing/acquisition channel that works for one business won’t necessarily work with the others. While there are many different methods, frameworks, and tactics to determine the right channel for your business, in the end it’s all about understanding your ideal customers combined with trial and error. First, you should determine the clear goals of your marketing efforts, and in this case, the number of customers you want to acquire, and at what cost.Setting a clear, realistic goal will help you understand whether the channel is working as desired, or not. This way, you can test various channels and compare their individual results until you find the most effective one(s) Conversion Rate Optimization While there can be many factors affecting the conversion rate of prospects (the percentage of prospects who actually convert into purchasing customers), it is often caused by the fact that the business/website doesn’t make the conversion process as easy as possible for the prospects. Conversion Rate Optimization, or CRO, is optimizing your site to encourage more conversions. In short, providing a clear, easy path for the prospects to convert. CRO is a fairly broad subject on its own, and you might want to check our previous guide on CRO here for more details (link). In general, however, here are the key principles of a successful CRO:

• Having an effective value proposition is extremely important. Without effectively communicating your core values, benefits, and messages, there is no reason to purchase your product
• A huge part of CRO is is the proper design, placement, and timing of Call to Action (CTA). Check out this examples by HubSpot as a source of inspiration
• Run various tests, especially A/B test on your pages
• Retargeting (link) is a very powerful and popular method to get more conversions. Use it to your advantage

Keep in mind that these are not the only available tactics to acquire more customers. You might want to check out these guides to help you further:

• Some customer acquisition tactics by Matthew Barby
• A beginner’s guide to lead generation by HubSpot
• A guide to lead nurturing by Pardot
• A huge aspect of acquiring new customers is maintaining the cost. Check out this article by Neil Patel on Customer Acquisition Cost (CAC)

 

3. Increasing Transaction Frequency

Here, your goal is to get each customer to purchase more often from you. Let’s say you are a restaurant business, and the average customer eats at your restaurant once every two weeks. In this scenario. convincing your customers to come each week will increase your revenue. Obviously, this method will work better with certain products and services over the others: if you are selling an exclusive watch worth $10,000, it’s far tougher to increase purchase frequency compared to, say, a fast food restaurant selling $5 food. Again, here are some tactics you can use in this method: Customer Loyalty Discounts It’s our basic psychology to like getting exclusive things. Offer special access to discounts, new product releases, or any special offers to your existing customer base before offering them to the general public. By using this “early-access” approach, you are also building a sense of urgency, encouraging your customers to purchase before the limited time expires. A great customer loyalty program offering exclusive benefits is one of the most effective ways to encourage your customers to purchase more often. Payment Flexibility and Installment Above, we have mentioned that increasing transaction frequency can be difficult if you are selling expensive products, and this tactic can help tackle that issue. By offering easy and transparent financing options, you can give your customers more reason for repeated purchases. Also, due to the fact that many millennials are now ditching credit cards, offering transparent installments that do not involve credit card can be a huge plus for your business. Email Marketing In our previous point, we have also discussed how email marketing is still incredibly effective in communicating promotional messages. Here, you can use email marketing to send personalized offers based on the customer’s purchase history to effectively encourage another purchase. A common approach is to offer complimentary products based on the items they recently purchase. For example, if you are an electronic e-commerce store and one customer recently bought a PlayStation 4, you might want to send them an email offering the latest games, accessories, or even an HDMI cable. In this saturated marketplace, personalized marketing is one of the most effective approaches to get your voice heard, and email is one of the best platforms to deliver personalized messages. Direct Mail and Cold Calling These old but proven tactics are still effective today, if not more effective than ever. Nowadays, the average customers received so many promotional messages on a daily basis, and these direct approaches can help in reaching them more effectively. For a direct mail, keep in mind that visual design is everything that matters. Your mail must be immediately eye-catching and engaging to draw their attention. Also, make sure your offers are interesting with clear and easy conversion path. For cold calling, you might want to check out this guide by Marketing Growth & Hack on effective cold calling techniques. Retargeting and Personalized On-SIte Marketing Retargeting (or remarketing) can be a very effective tactic to encourage existing customers to purchase more. Google AdWords and Facebook Ads, among other platforms, offer the ability to retarget those who have purchased your products in the past, and can show them a relevant, personalized ad based on their purchase. Another common approach is to put a personalized message on the top of your site. Something like, “Nice seeing you again! Check out our special discounts for loyal customers”. You can even go with more personalization-heavy messages like “Welcome back! You just bought a  baby stroller, check out our special offers for infant seats!”. This type of personalized messaging can effectively encourage returning customers to make another purchase, and regularly check your site. You can also combine both approaches: retarget past visitors and customers to come back to your site, and then give them a personalized on-site messages. Social Proof Leveraging social proof can be extremely effective not only to encourage repeat purchases, but also to acquire new customers and increase your overall revenue. People are more likely to purchase from companies they can trust, and social proofs like testimonies,good reviews, and likes are simply the most effective ways to gain online credibility. Encourage your existing customers to write good reviews. You can achieve this by offering an interesting incentive like discounts, free products, and so on. Also, reach out to influencers in your niche/industry. Build relationships with them, and get them to review your product.  

4. Increasing The Average Transaction Size

Encouraging your customers to buy more often is not the only way to increase the generated revenue from a single customer, you can simply get them to purchase more in every single transaction. There are two main approaches in achieving this feat. First, there’s upselling, which is essentially offering them more expensive products, add-ons, and upgrades.For example, if you are a SAAS business, you can upsell additional features, expansions, or even premium version of your software. The second one is cross-selling, which is selling additional products or services that are often complementary to the ones they are already purchasing. For example, if you are a restaurant, you can offer desserts, entrees, or snacks after they purchased the main course. Here are some key tactics you can consider: It’s All About Understanding Your Audience Effective upselling and cross-selling can only be done after you’ve truly understood your customers and prospects: their problems, needs, and goals. Analyze existing customers’ behavioral and demographic data, and determine their needs. If necessary, you might want to develop new products or services to answer the customers’ needs and problems: when you are a company selling a marketing automation tool, and you know your customers are avid fan of cloud storage, why not develop your own cloud services? So, do your homework of customer analysis, develop a buyer persona, and build detailed customer profiles. Only by then you can have the correct upselling and cross-selling approach. Customer Segmentation Not every single customer is ideal for upsell and cross-sell activities. Sometimes, they might be limited by budget, timeline, or any other factors. This is where the importance of identifying your most profitable customer segments comes in. Also, it is equally important to identify your least profitable segments, and decide whether it will be worth it to continue spending your resources on them. You can segment by location, demographics, behavior, and many other factors depending on your industry, and determine the correct upsell and cross-sell approaches for each segment -or not to attempt any approach with certain segments-. Be Realistic, Don’t Force It Have you ever contacted a company asking them to solve a simple problem, but got endless offers of “limited opportunities” instead? Did it frustrate you? Well, don’t do the same to your customers. Upsell or cross-sell suggestions that are unrelated, unrealistic, and worse, completely out of line can cause you to lose customers. Instead, your suggestions has to fit the customer’s exact needs and/or problems, and even better, when they are the ones expressing the desires. Look for important signals and ask the right questions like, “what features would you like added to our product?” or “how can we help you better?”. The key here is to actively listen to their needs, issues, and goals. Educate Them Through Your Content Again, remember that people are not buying your product or service, but the benefits tied with them. No one is going to invest more money for more products until you have convinced them that the products will solve their problems, have tangible benefits, or will improve their quality of life. Content marketing, again, will be an effective method to educate your customers in this aspect. Show your customers how the premium version of the product will perform, the benefits of getting additional features, your unique values, and so on.  

End Words

As you can see, among the many different tactics, channels, and campaigns, there are only four ways to increase sales: have more customers, increase transaction frequency, increase transaction size, and raising your price. Each method has their own advantages and disadvantages, and will work better with certain businesses over the others. Also, keep in mind you can combine several methods togethers. The key to success, however, remains the same that you will need to understand your customers better: analyze their behaviors, needs, and problems, and pick the proper tactics to address those needs.