3 cost effective ways to increase sales revenue
3rd January 2019
Being able to increase sales revenue effectively is the most crucial factor in determining the future success (or failure) of your business. If you want to succeed in today’s marketplace, selling one product, and giving your customers one offer isn’t enough.
Up-selling and cross-selling have the potential to increase sales revenue massively because you are selling to existing customers who already trust you. You are more likely to make a sale to an existing customer than a new prospect, which is why up-selling and cross-selling could be a huge opportunity for your business. One of the many benefits of increasing revenue is that you can start spending more money on acquiring new customers, which will help you grow your business much faster. There are many cost-effective strategies to boost sales, in this article we will be talking you through how to increase revenue streams by up-selling, cross-selling and down-selling.
1. Increase sales revenue with up-selling
Up-selling is a sales technique that involves encouraging customers to purchase a more expensive, upgraded or higher-end version of a product that was initially offered, for the purpose of growing revenue. Up-selling might seem like a dirty sales tactic but if it’s done effectively it can actually improve your customer’s shopping experience. Offering premium versions, upgrades or appropriate add-ons can deliver value to your customer’s experience and will leave them even more satisfied with their purchase. Just make sure whatever you are up-selling provides extra value and added benefits for your customer. This sales technique is not only a great way to grow revenue but it’s also a very effective way to encourage returning customers. However, don’t get too carried away with up-selling because you could risk blowing your customers budget and blow your chances of a secondary sale of greater value.
At this stage, it’s important to have an effective revenue model in place so you can start generating sales. If you haven’t picked a revenue model for your startup yet read our article 12 most popular and effective revenue models for startups where we talk you through different revenue strategy examples that will help you choose the right revenue model for your startup.
Start thinking about how you can upgrade your offer to a premium, higher-end version.
2. Increase sales revenue with cross-selling
Cross-selling is a sales technique that invites customers to spend more money by purchasing related or complementary add-ons, alongside the original product. Cross-selling is a great way to tell customers about other products or services you sell, that they may not have previously known you offered. This sales technique is a very effective way of increasing customer lifetime value and selling more to your returning customers over time.
With sales, timing is key and the same rule applies with up-selling and cross-selling. You should only offer additional products or services when your customer has already decided to buy. For example, when you are shopping online and add something to your basket you will notice suggestions will pop up underneath which will complement the item in the basket, or when you are ordering a burger they will ask you ‘do you want fries with that?’ Whilst cross-selling is a great way to increase sales revenue it’s also an important part of your customer’s journey. It’s not just about making money, it’s about making sure your customer has the complete solution. For example, if you have sold an expensive piece of tech hardware, maybe your customer needs a protective case to keep it in.
Consider your own third-party products that you could cross-sell. If this isn’t possible then consider finding partners who can supply you with third-party products that would complement and add additional value to whatever it is that you are selling, this way you can earn additional revenue through commissions. Once you have a range of products suitable to cross-sell you need to put in place strategy that will help you sell them. Here are a few cross-selling strategies to put into practice:
A complementary or similar product
Suggest complimentary or similar products to the one the customer has already chosen.
You can often see examples of this popular strategy online where you will see “customers who bought this product also bought…”. With this strategy, complimentary or similar products will be selected automatically based on the customer’s order history and buying habits.
Get your customers to buy a little bit more by using tempting offers like “£20 off when you spend over £50” or “free delivery for orders over £30”
This strategy is based on a customer who is after the complete solution. It is important to specify if things are sold separately and if your product is not complete, because some customers might feel cheated if they have purchased something and find out things are sold separately, afterwards.
Sell the look
Help your customers visualise how your product could look if it was combined with other products. This is a popular approach in the fashion industry.
Using quotes from experts in your market, celebrities, influencers or micro-influencers is a great way to draw your customer’s attention to different products.
3. Increase sales revenue with down-selling
If after a bit of contemplation your customer doesn’t bite and decides to back down from purchasing your product altogether, the reason could be because the product is too expensive. If you think the price is a deciding factor, it might be worth considering a down-selling technique. With this strategy, you downgrade your main offer and present the customer with a lower price or an alternative product. The goal of this sales technique is to acquire a customer, even if you make less of a profit. However, it is important that you still keep an attractive profit margin.
Some companies use down-selling as their go-to sales technique because their lower-end products can actually be more profitable, it’s also a great way to build trust with your customers and demonstrate that you are acting with their best interests at heart, it is a very effective way to build a customer base. Consider down-selling to your customer as your starting point, with the intention of eventually up-selling.