4 Ways to Increase Revenue by Using Your Business Data
Does it feel like you’ve tried every method out there to increase your revenue? Does it feel like you’re constantly chasing leads or testing “hacks” for doing so…but not getting results?
There’s a better, easier, and more reliable way to drive more money into your business. It all comes down to your data. Let’s talk about four ways to increase revenue by paying attention to your business data!
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Revenue-increasing strategy #1: Improve your retention rate
Depending on which source you ask, it can cost five to seven times more to acquire a new customer than to keep a current one. If you focus on retaining your existing customers rather than spending money to attract new ones, you can boost your revenue!
First, you must determine how long your customers typically stay with you. If you sell products, check your number of returning customers vs. new customers, or how often they purchase from you. If you sell services, check rebills for subscriptions or memberships.
I also recommend checking your lifetime value, or LTV, which is the amount of money a customer spends over the course of their relationship with you. This metric will help you see how you need to improve your retention rate.
As for actually improving your retention rate, your strategy depends on your business and customers! You have to use your data to determine what pushes your customers to buy or convinces your clients to book you. Then you can replicate your success.
And if all else fails, ask your existing customers. Listen to them and thank them for their feedback. You’ll get valuable information but also strengthen your relationship with those customers.
Revenue-increasing strategy #2: Bump up your average order value
Your next method of increasing your revenue is to bump up your average order value, or AOV. The average order value is the average amount of money your customers spend on one purchase. Your AOV = dividing your revenue by your total number of orders.
One way to bump up your AOV is to simply raise prices for your products or services. Customers will spend more initially and increase your revenue. When you raise your prices, you can offer higher-value, more expensive items to your customers, too.
You might also offer “bumps” to boost your AOV. Bumps are low-cost, high-converting offers that align with your main offer.
Upsells, also called “one-time offers” or OTOs, are another option. They’re higher priced in comparison to bumps, but provide more value than the original purchase.
Think of bumps as extra bonus items, while upsells are upgrades. With a combination of the two, you’ll bump up your AOV with ease!
Revenue-increasing strategy #3: Increase your sales conversion rate
If you want to increase your revenue by improving your sales conversion rate, you must first understand your sales funnel.
You don’t have just one sales conversion rate to track and analyze. You have conversion rates that measure every action your customers take at each step through your sales funnel — from subscribing to your emails to downloading a low-cost template to booking your VIP day.
It’s crucial that you analyze your conversion rates at each step of your funnel! You’ll learn what to improve or obstacles to take down that prevent your site visitors from becoming customers.
Again, your strategy will be unique to your business and your customers. Based on your business data, you might increase your site speed, provide content that your customers want, add enticing product reviews, and so on. All of these actions and more can help increase your conversion rates.
Revenue-increasing strategy #4: Ramp up your traffic
Last but not least, you can increase your revenue by ramping up your site traffic. And like the other three methods we’ve already discussed, this method involves understanding where your traffic is coming from…by analyzing your data.
What sources of traffic have performed best for you in the past? They may not be what you think!
It could be specific social media campaigns, particular links in your email newsletters, paid search ads, the list goes on. Google Analytics can provide this information to you in your traffic acquisition report, which is really helpful.
After pinpointing your best traffic sources, find ways to replicate what makes them so successful.
You might increase your email newsletter frequency to once a week rather than every two weeks if they’re driving traffic. Or, you might write longer blog posts on specific topics if that’s the type of content your customers want.
Whichever strategies you try for increasing your traffic, be consistent and give it time. Stick with your method so you can see what’s truly working for your business.
Increase your revenue by using your data
Not sure which of these four methods you should start with? I recommend trying them in the order we discussed them in this blog:
- Optimize the experience for your current customers
- Find ways to increase how much they buy
- Focus on sales conversions
- Improve your site traffic
You’ll see improvements in your revenue the quickest when trying them in this order. And when all your efforts have been added up, the changes you’ve made can have a massive compounding effect on your business!
The bottom line is, no matter what actions you take to increase your revenue, you have to look at your business data. Your data will give you insight into how your business is doing now and what you can do to boost your revenue.
Want help interpreting what your data means and how you can use it to increase revenue? Let’s chat.
