Want to increase your business revenue, or at the very least, know how to ramp up revenue when you choose?
The good news is, you can.
And without investing big in new marketing avenues or sales staff.
Sure, there may be times you’ll want to do that too, to grow your business. But that takes time and money. You have access to smaller adjustments that make use of what you already have, right now.
You can optimize what you have to significant effect. That’s leverage.
Leverage is something you can apply to several areas of your business to increase revenue. This article focuses on just one of those areas: pricing.
The prices you charge should directly reflect the value that you offer through your business. That’s something to keep in the front of your mind as you’re considering leverage opportunities. Always, always, always create value!
To generate revenue in your business, here are 3 ways you can leverage your pricing for more income:
1. Raise Your Rates
This may seem like an obvious way to increase revenue. On the surface, it is. But there’s more to it than just sticking a higher number on your product or service.
Chances are, you don’t fully appreciate the value that you offer with your product or service. Value is not just about what it costs to produce or deliver your offering, though you absolutely want to ensure those costs are recovered.
Value is truly in the eye of the beholder, your prospect or client. And in marketing your business, the task is to find ways to fully communicate that.
Take a close look at your products and services. Did you consider each one’s full value when you set your prices?
Are you including the experience that your client has and the value they place on it? Do you deliver on time, as promised? Do you provide a fun or relaxing experience? How does dealing with your company make them feel?
Collect data about how the value of what you offer is being perceived on an ongoing basis. Write down what happy clients say, especially when they share why they chose you instead of someone else to work with.
When you have a clearer idea of the value that you offer, you’ll better be able to gauge if a price increase is in order. It’s likely that you are due for an increase. Most people undervalue what they do.
Your pricing is worth revisiting periodically. As your product or service gets better, you’re increasingly offering more value. Check in to see if your prices reflect that.
2. Develop Price Layers
For every service or product you offer (or plan to offer), develop versions at different price points.
For example, if you offer 1-on-1 counseling, you can add group counseling for a higher priced layer to that service.
For each service or product you currently offer (or plan to offer), what related service or product could you add to it?
Another way to create revenue layers is to modify what you already do.
For example, develop a do-it-yourself version of what you currently do on a customized basis. If you currently offer in-person workshops, offer a self-guided version of all or part of the workshop.
Three price layers or tiers are a good idea, because people tend to choose the middle level. It helps make their decision easier.
Don’t offer more than three layers. Having too many options is confusing, and it stops people in their tracks. They then make no decision at all, and you have lost the sale.
3. Time Your Offers
Now that you have 3 different price layers, you can time your offers to create more revenue.
When you are making an offer, it’s easier to build in additional offers that make sense for the client at that time.
Here are 3 opportunities available to you when you’re already in conversation with someone about a possible sale:
Upsell: offer a higher priced product or service
Cross-sell: offer a related product or service
After-sell: provide a follow-up offer that is special to those who just bought
What can you add to upsell, cross-sell, or after-sell?
Leverage has the biggest return on the investment of your energy and resources, because it utilizes what you already have available to you.
As you spend time considering your leverage opportunities, use these incremental steps to expand the wealth of opportunities available to you.