This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don’t necessarily represent IBM’s positions, strategies or opinions.
There are only three ways to increase your revenue.
Increase the number of clients you serve. One of the most effective ways to improve your sales is to acquire new customers. If you’re already creating value for some group of clients, it’s likely that others would benefit from the same. Everyone wants new customers, but acquiring them is difficult. You have to market yourself. You have to prospect. You have to help them through their buying process. It can be expensive in time and money.
Raise your prices. The very thought of it can strike fear into your heart. What if raising your prices causes you to lose clients? And it might. But many companies increase their revenue by raising their prices–even after accounting for lost clients. If the value that you create is great–and your relationships deep–raising rates works. But it isn’t easy.
Sell more to your existing clients. This always feels like the safest, easiest way to improve your numbers. You already have contracts, and you already have relationships. And you should always try to improve your wallet share, or why bother going to all the trouble to win the client in the first place? But selling more to your existing clients isn’t easy either. If you want greater wallet share, you have to displace any competitors and any substitutes for what you sell. You have to create greater value to earn that wallet share. And once you have completely met your client’s needs, there isn’t anything more you can sell them.
None of the three ways you can improve your revenue numbers are easy. Choosing only one method isn’t the best choice either, especially if you are making that choice because you believe it is easy.
You should be pulling all three of these levers to improve your numbers. You should be acquiring new clients by opening new opportunities. Your should be increasing your prices where and when you have created enough value to be able to command them. And you should be improving your wallet charge by selling more to your existing clients; you already have the contracts and relationships.
What is the primary method you are using to increase your revenue?
Why did you choose that method?
What other methods are available to you right now?
In what methods should you invest more time and energy?
Which methods are you avoiding and why?