Save Your Business in 60 Days: Increasing Sales — Part 2
When your business is suffering tough financial times, there are two main strategies to bounce back quickly — (a) cut costs, or (b) increase sales. In this article we will focus on the latter and the tactics you can use within 60 days to quickly improve sales and save your business:
1. Focus on Winning Areas
Narrowing your focus to customers who already love your offering may seem obvious, but it’s often overlooked. Existing customers are 3 times easier to sell to than new customers (Forbes, 2013). If you continuously add value for existing customers, those customers will continue to pay up for it.
- Increase prices — Raise prices between 2x-4x to amplify premium existing customers. Inevitably, low-value customers will fall away allowing you to optimize your short-term sales efforts.
- Cross-sell — Encourage your customers to make purchases that complement your primary offering, increasing their total bill (e.g., A jeans company encouraging customers to purchase a belt at check-out).
- Upsell — Provide upgrades to your primary offering — this can simply be more of your primary offering or an integration that improves the customer’s experience (e.g., Dropbox allows upgrades to more cloud storage for a higher price).
- Adjust your pricing model — Provide a pricing model that creates a low barrier to entry, and a higher-valued engagement (e.g. Stitch Fix uses a monthly clothing subscription to lock in recurring sales. Note that this does not necessarily mean “low prices”, as this is often hard to sustain).
- Provide rewards — Acknowledge customer loyalty to create a vital link between your offering and your customers, which increases customer satisfaction and sales (e.g., Airline “frequent-flyer” status grants the customer early boarding).
- Request payments upfront — Ask customers to pay you upfront for services (e.g., A SaaS company asking for annual payments in advance. Note that this may only improve short-term cash flow and not necessarily overall revenue).
2. Sell via New Distribution Channels
Only after you have exhausted selling to existing customers, consider new distribution channels. The goal is to gain exposure to your primary customer profile through a new route.
- Sell differently — Deliver your offering through another method digitally or in-person, while keeping the offering’s foundation the same to reduce operational friction (e.g., A brick-and-mortar restaurant could begin selling through delivery apps).
- Establish partnerships — Collaborate with related companies to sell your offering to primary customers during their ordinary course of business — which works best when mutually beneficial (e.g., A brownie company partnering with a coffee shop to sell their desserts at check-out. Note that in times of financial hardship, do not chase partnerships with longer than 2 weeks lead time).
3. Sell to New Customers
Finding new customers is one of the hardest challenges for a business. Leverage your existing relationships to find new sales in areas that were previously untapped.
- Ask for referrals — Ask your strongest existing customers for introductions to new customers. Your existing customers bring warm leads, and often close sales faster than many sales teams (e.g., A yoga instructor asking their best customers to bring a friend to class).
- Reach a new market — Find new customers with attributes closely affiliated with your primary customers (e.g., A neck brace company targeting physical therapy centers, if their primary customers were previously hospitals).
- Alternative revenue — If you own or lease your physical space, rent out the unused space for meetings and events to generate additional income (e.g., A law firm using Breather or EVENTup to rent out its conference rooms on the weekends).
While in a financial crisis, find tactics to quickly generate sales and prioritize customers willing to pay now. Look for ways to optimize existing customer engagement and, if necessary, access new customer segments to improve your chances of survival.
• The 10-Point Checklist to Launch Your Business
• 12 Steps to Scale a Business
• How to Calculate Market Size
• 7 Steps To Assess Your Competition
• Competitive Advantages That Last
• Finding The Right Customer Profile
• How To Measure Results
• Know Your Niche & Costs
• Developing a Go-to-Market Plan (GTM)
• 4 Steps of Customer Discovery Before You Launch
Pitch Decks & Messaging
• How to Make a Pitch Deck for Your Fund
• How to Write an Investor Update (With Example)
• How to Write a One Pager
• 9 Easy Steps to Build Your Company’s Messaging
• How to Make a Great Pitch Deck
• 3-Month Fundraising Plan — Priced Equity Round
• A Simple Way to Track Your Business Finances
• The First Service Providers To Hire For Your Business
• Who Should You Hire Next?
• Customer Service Basics
• Save Your Business in 60 Days: Cutting Costs — Part 1
• Helpful Tips for Better Operations
• 5 Ways to Productize Your Business
• The Importance of Denouncing Racism
Kaego Rust is CEO at KHOR Consulting, helping companies build business plans, streamline their operations, and create pitch decks. If you’re looking for help, contact email@example.com.