Increasing sales and revenues are related but different goals, and each needs its own strategy. Although the tactics for each may be different, they should complement each other. Understanding how sales and revenue are related and how to increase both helps you market efficiently and optimize your profits.
Sales vs. Revenues
The words “sales,” “revenue” and “income” have different meanings, and become confusing if used as synonyms. “Sales” refers to the number of units of your product you sell, “revenues” refers to the total amount money your sales generates, and “income” refers to your profit from those sales. Keep these in mind as you plan sales strategies to strike the right balance for your business’s needs. Don’t be surprised to hear “sales” and “revenues” used as synonyms, which is a common occurrence in business.
Increase Your Marketing
An obvious way to increase sales is to boost your marketing. Quantity doesn’t necessarily mean quality, so careful planning, test-marketing and monitoring your results maximizes your sales. Conduct marketplace research to learn which messages speak to your target audience.
Run ads and promotions in limited locations and check the results before spending your entire budget. Incorporate some way to monitor marketing communications, such as using coupons, electronic codes or website traffic statistics.
Review Your Pricing Strategies
If your product or service is price sensitive, pay special attention to your pricing strategies. Find out what your competition is charging and raise or lower your prices based on your goals. Lowering your prices can increase revenues to make up for lower margins.
Raising your prices can create a higher perceived value in the minds of consumers and increase your margins. Raising your prices can also increase your revenues without increasing sales.
Expand Your Distribution Channels
Changing where you sell your product can significantly boost your sales and revenues without requiring any changes to your marketing or pricing. Perform a careful study of the effects of using online selling, direct mail, wholesalers, retailers, distributors and outside sales reps to project how each method can affect your sales volumes, profit margins and total profits. In some cases, new distribution channels require marketing support.
Diversify Your Offerings
If you’re a mature company, it might be time to add new products and services to create exponential growth. If you feel you’ve saturated the marketplace, determine the products your target customers buy that you’re not selling and that you think you can make and market profitably. You might need to replace old products with new ones. This might result in a decrease in sales, but higher revenues if the replacement product has a higher price.
Develop Relationships and Cross Promotions
The more people you can get to promote your product or service, the more sales and revenues you’ll have. Look for businesses that don’t compete with you but which have the same target customer and develop cross promotions. For example, if you sell sports apparels, sponsor golf and tennis instructors and youth league coaches to wear and promote your line. Partner with charities to get them to promote you to their supporters. Use social media programs to build a following generated by satisfied customers.