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