3. Increase sales to existing customers
How you go about increasing sales depends on your circumstances and how your business is performing. You might choose to focus on customers who’ve already bought from you, or you could try to win new customers in your local area, nationally or overseas.
The simplest way to increase your sales is to sell more of the products or services you’re selling at the moment to the customers who are already buying them. For most businesses this involves:
- persuading one-off customers to become repeat customers
- finding customers who’ve stopped buying from you and trying to win them back
- selling more of the same products or services to your regular customers
By keeping a record of who your customers are and what you sold to them, you can work out who’s stopped buying from you, and who might consider buying more. Targeting these customers is often a cheaper and more effective way to increase sales than trying to find new ones.
Review your prices
Regularly reviewing your prices and checking them against your competitors can be an effective way of increasing your sales, profits or both.
You should try to estimate the likely effect of different price changes on the sales, cash flow and profitability of your business before making any changes. To do this successfully, you need to understand:
- the ‘cost structure’ of your business (including regular ‘fixed’ costs, and ‘variable’ costs that change according to your business’ activity)
- the value your customers place on your products and services
It’s worth bearing in mind that offering a discount can sometimes reduce your overall profitability, even if your sales go up. Equally, you might be able to make more profit overall by increasing prices, even if you’re selling fewer items.
Small changes to pricing like providing loyalty schemes or bulk discounts can increase sales to both existing and former customers.
A car wash offers free cleaning every tenth visit if customers opt for the deluxe service. Even though they’re giving something away for free, the value of repeat business from loyal customers means that profits go up.
It’s likely that it would’ve cost significantly more to generate the same amount of sales with new customers, resulting in less profit.
You should also regularly check the price you’re selling products and services at against competitors. This will help you find out if you’re:
- losing customers who get the same product or service elsewhere for less money
- sacrificing profitability, because customers are willing to pay more than you’re charging them