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The term “revenue growth” typically refers to how much money your business makes every month or quarter. However, there is another way to define revenue growth that goes beyond just looking at monthly changes – it looks not only at how much money you make each period but also what time period those revenues come from.
This additional metric is called “revenue growth rate.” A higher number means that your business is growing faster than it was earlier so therefore making more of an impact in a given amount of time. It can be helpful to look at it this way because even if your income drops slightly, you still have enough to survive depending on what size company you are.
But for a small business, dropping off a cliff could mean going out of business due to lack of funds. Therefore, understanding how well their business is doing in terms of growth rates is important. This article will go into greater detail about why this matter and some examples.
Importance of revenue growth
Many things depend on how successful your business is thusly determining whether or not it is successful depends largely upon one thing: how well it grows over time.
A lot of times, people focus too much attention on earnings which is great as they want to know how wealthy their business is. But although this is very interesting, it does not tell you anything about how successful your business is.
As a small business owner, you should be investing in ways to grow your company’s revenue. But how can you do that if you don’t know what your top income producing sources are?
The first thing you need to understand about marketing as an entrepreneur is that it doesn’t stop when you run out of money. You constantly have opportunities to create new relationships or strengthen existing ones, which both result in sales down the road.
That’s why it’s so crucial to find out how much money you’re spending on each of your current customers.
A lot of entrepreneurs ignore this step because they feel like they’ll be making too many calls and meetings to track it. However, we suggest doing it at least once per month, if not every week.
Why is tracking current client revenues significant? Because it gives you a clear picture of just how much influence you have over the success (or failure) of your business.
If you notice that some clients aren’t as loyal as they used to be, maybe it's time to look into offering them less expensive alternatives.
The second way to increase your sales is by growing your current client base. This can be done in several ways, but one of the most effective are via referrals or word-of-mouth marketing.
Getting more people to buy from you comes down to creating products they want and offering them to other people for their approval. By having others promote you, the market will take care of the rest!
By giving away what you have to offer and supporting others, you’ll see your revenue grow. And since people who know and trust you as a business person will probably pay more for your product than someone who doesn’t, this makes sense too!
Running an online store is a lot of work, which is why there are so many freelancers out there – making a living off the hard work and effort of providing services to other businesses. You could do it too if you put in the effort, just like anyone else does.
A strong revenue growth strategy starts with understanding your customers’ behaviors, motivations, and goals. Are they spending money in-store or online? How much do they spend at each location? What products and services are they already using to fulfill their needs, and what can you add to help them feel more confident in your company’s value?
You will also want to understand how important each individual customer is to your business. Chances are very good that he or she was brought into your organization as a loyal patron, but now things have changed. You need to determine if these changes are due to temporary factors (for example, this season’s trends) or if there is true dissatisfaction that requires action.
If it’s the later, then you must perform an analysis of cause and effect to determine why this person no longer feels comfortable in your company’s care. More often than not, it comes down to just one factor – something either you or your competitor did to hurt his or her feelings. This may be something small like forgetting someone’s birthday, or it could be something bigger such as poor service, lack of responsiveness, or even fraud.
As mentioned before, internal marketing departments as well as outside marketers can use metrics to determine how well your business is doing. Metrics include things like customer satisfaction, conversations with customers, product purchases, and more.
By looking at the numbers for different metrics, you can make an informed decision about whether or not to change something about your business. For example, if there are low levels of engagement in form of comments and questions on your social media pages, then it may be time to do something about it!
You could also look into why people aren’t leaving reviews or checking out products after their last purchase. A possible reason might be that they received poor service during their most recent transaction. If this is the case, then it’s worth taking action by correcting the situation so that future customers get better experiences.
A great way to do this is by creating an open thread on social media sites such as Facebook and Twitter. Your followers can comment, chat, ask questions, and share stories with each other all while you watch (and listen)! This gives you more exposure and opportunity to respond to messages and discussions.
If you're already providing these types of opportunities, then why not increase them? Add an additional hour every week where everyone's account is monitored, answered, and discussed. You would want to start small though, maybe one day per week until everything feels balanced.
As discussed earlier, creating an emotional connection with your customers is one of the most important things you can do as a business owner.
But how do you achieve this? How do you make sure that they feel valued and appreciated? A popular way to do this is by offering them reward or gratitude marketing.
This is when companies offer their current customers something such as a discount, free merchandise or money off purchases to show just how much they appreciate what they have done before.
A large company may give away a $100 gift card every month for an entire year to all of its past customers. This rewards program is also called anniversary sales since it celebrates one full year of business for the company.
As we have seen, keeping up with trends is an integral part of being successful in business. This means staying current on what products and services are needed by your audience or you could become obsolete soon.
Running your business without understanding the needs of your customer base can cost you in the long run.
It costs you in terms of lost sales as people purchase alternatives that work for them, it can lose you revenue through lower sales volume, and it can even scare away future buyers due to poor service.
By adding new features or changing the way you offer services or goods, you need to be sure that these changes don’t hurt your existing clientele.
This article will talk about some ways to thank your past clients for their business, and how to keep offering them quality service.
Reminder: Don’t forget! Due to the coronavirus pandemic, most businesses are experiencing a slowdown or even shutdown.
Many companies have canceled events and meetings, closed down offices, and/or asked employees to work from home until things return to normal.
Given this, many organizations are finding creative ways to continue supporting their community and working online via tools such as Zoom or Slack.
Some are asking their staff to do the same, which is very common during times like this when close proximity is limited.
The second way to grow revenue is by adding new features or products to what you have already. This is called enhancing your product line, introducing newer products, or launching a new business venture.
Many small businesses begin with the basic product offering and then add additional features or services onto their product line. For example, if they offer printing, they could launch a website design service or start an online store.
This is how most big companies become large – by adding more advanced offerings that match their original core competencies.
By adding these extra benefits, people will want to purchase their initial product (printing) plus the extended package (website design or e-commerce).
Enhancing your product line is a smart strategy when you are struggling to increase sales of your current products or services. You can also do it at any time, not just during slow sales periods.
It is better to develop new products before there are no more referrals from current clients, than after this happens and you never take action.
Growth depends on consistently delivering higher quality products and supporting them through the sale process, as well as keeping up-to-date with market trends.
One of the most important things you can do to boost AR revenue is follow up with past customers!
Running an exit survey or asking for feedback via chat, phone, or email is a great way to keep in touch and strengthen your relationships with current clients.
This is also a good time to ask if they have any suggestions or tips for us — something that could help grow our business.
By staying in contact, it creates a level of consistency which helps promote trust in your business and product. And, when there are problems or questions, you’re already prepared because you've been talking to them before.
It's worth its weight in gold.
And while some may think this unnecessary, it isn't. It's actually one of the best ways to gain new sales and retain existing ones.
