5 Fixes for Revenue Problems

By Brad Thomason, CPA

 

In business, selling is the name of the game.  Doesn’t matter what industry, you either sell or you don’t have a company.  Some people are uncomfortable with this proposition, but it doesn’t change the facts.  The simple truth is that revenue is up there on the top line of the income statement for a reason: without it, you’ve got no starting point, no business.

When a business needs more revenue there are a handful of core approaches.  True, there are nearly endless variations on themes.  But at the essential level, virtually all of the fixes belong to one of 5 “tribes.”  Knowing what these tribes are can provide some mental structure that may make it easier to figure out what you should do to elevate your own revenue levels.

1.        Product Line Are you selling the right things to the customer base you have?  Is there another product that makes sense for your customer base that you aren’t selling right now?  Would adding another product open the door to a different segment of customers, especially ones who might also be interested in other existing offerings (i.e. cross sales)?

2.       Market Size Do your customers come from a specific area?  Do other people in different areas have the same needs as your existing customers?  Could you replicate what you do to an entirely new group of customers simply by adding another location in a different geographical location?  If what you do works in one place, is there a reason that it won’t work in 2 (or 10, or 100)?

3.       Pricing Are your prices so high that they keep people from buying from you?  If you charge more, is there a clear reason (like fabulous customer service) why a customer ought to be willing to pay it?  Do you have your prices set too low, and fail to get as much as you should from each customer interaction?  How do you know?  What mechanisms do you have in place to compare your prices to those of alternative suppliers?

4.       Advertising and Messaging Does the buying public know what you sell?  Do they know why they ought to buy it?  Do they even know you exist?  If you touch the public in multiple ways, do they work together to send a consistent message?  Are there other ways you could use for getting your message in front of more eyeballs (either low-cost ways, or expensive ways that would still be worth it if they worked)?

5.       Closing Rate/Selling Efficiency Are your sales people seeing as many potential customers as they should?  Are they closing at a rate that is acceptable for your industry?  If you have good closers but not enough sales opportunities, how can you alter one of the 4 variables above to get them more people to talk to?

These questions might seem basic.  But I’ll bet that if you are having revenue problems you read across at least one of them that got you to thinking about changes you could make.  So that’s good.

See, revenue problems can be big problems, but they don’t have to be complicated to solve.  If you know that you offer something of value, you need to offer it to more people.  If there are other valuable things that are a logical fit for the rest of your business, offer them too.  Don’t try to get more than is fair, but don’t short change yourself either: get fair compensation for value delivered.

Finally, appreciate that there is a difference between marketing and selling.  Selling is the process of getting a specific customer to agree to buy something.  Marketing is all of the other things you do to create a meaningful value proposition for generic, theoretical buyers, and the steps you take to put your sales people into contact with the real thing.

Understand the theoretical framework of the revenue generation process, and it becomes much easier to see which part of the system needs to be tweaked to positively impact results.

Now, go forth and sell…

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