Revenue is the amount of money that comes into the business, predominantly through sales activities. It has nothing to do with profit or tax breaks. It is the total amount of money generated by that business. A poorly run business might generate a lot of revenue only to fail due to lack of profitability. That is called profitless revenue.
You can generate profitless revenue by selling everything at cost or less. The smartphone industry likes to tout the number of units sold vs. the competition. But practically all of the profitable revenue is controlled by Apple and Samsung. Between those two, Samsung sells the majority of phones. But Apple makes the vast majority of the profits.
If you are going to stay in business, you have to generate profitable revenue. Here are five tips for doing just that:
1. Get People Talking
Word of mouth is one of the most powerful sales boosters there is. It is common knowledge that bad news will travel halfway around the world while good news is still putting on its boots. But there is some good news for good news. A recent study shows that positive word of mouth has a bigger impact than negative.
Crest Financial has been recognized as one of the fastest companies in Utah. Those positive Crest Financial reviews are an important part of their success. Because it provides a necessary service for other companies, those businesses also benefit from positive word of mouth. You can grow your profitable revenue by utilizing the oldest tool of the trade.
2. Breach the Credit Barrier
No one has $5,000 lying around to buy furniture. That’s got to be financed. The barrier to entry is not the price on the sticker. It is the credit worthiness for a reasonable financing offer. Because there is no credit needed with Crest Financial, many retailers are choosing this service to make no-credit financing available to their customers for up to $5,000. Stop letting profitable revenue walk out the door for lack of credit.
3. Free Shipping
Web Marketing Today, along with innumerable studies, suggests that higher than expected shipping and handling costs are the top reasons for abandoned shopping carts online. Offering free or heavily discounted shipping is a tried and true strategy to increasing revenue, but to make that revenue profitable, you will need to consider the following:
- Offer free shipping only on items up to a certain price.
- Offer free shipping only on orders that exceed a certain price.
- Limit free shipping to standard ground.
The idea is to use free shipping strategically. Ill-considered free shipping can increase revenue, but destroy profits. Use this method wisely.
4. Order It
The power of Amazon is that ordinary consumers can order any item they want from anywhere in the world at a reasonable price. When a consumer walks into a local store to purchase a specific item that is not in stock, it leads to frustration that costs you revenue. The customer can just whip out their smartphone and have the item ordered before they leave the store.
The Internet is never truly out of stock, and neither should you be. You should have systems in place to order and drop-ship the item so that it is a part of a seamless transaction. “Out of stock” is meaningless in the Internet age. Either you will order it for the customer and get the revenue or they will do it themselves. Make sure your business is set up to do the ordering for them.
5. Help Them Find It Elsewhere
If the customer wants something that you just can’t provide, don’t let them leave with a bad taste in their mouth. You can still send them on their way with positive feelings by redirecting them to where they can find what they’re looking for. You may not gain revenue that day, but you will make a friend for the life of your business. The long-term relationship is just as good as a sale.
In your pursuit of revenue, don’t forget that you are in it to make a profit. Revenue is treading water. Profit is swimming like Michael Phelps.