View Mobile Site
 

Ask the Expert

Signal Photos

 

Ken Keller: A list to help grow revenue

Brain Food for Business Owners

Posted: August 6, 2011 1:30 a.m.
Updated: August 6, 2011 1:30 a.m.
 

The single biggest challenge facing business leaders is increasing revenue. The following should kick-start thinking about possible ways to grow the top line.  

 1. Create a written price list for the company. This document ends free-flowing offers created by people who want a sale for ego or commission. Those deals negatively impact margins.

A price list can be internal and not be distributed to clients or prospects. It will help sales and customer service people better understand the breadth, depth and value of what the company offers.

2. Put stronger controls on promotional offerings and giveaways that negatively impact margins. Only specific individuals should have the authority to reduce prices and give products or services away.

3. Consider elimination or a reduction in promotional offerings. Discounts are often given as a one-time event for a special situation or new clients, which can become ongoing and irrevocable. Those special arrangements cause the business to leak revenue while no one is paying attention.

4. Establish or increase the per order minimum on products or services.

5. Consider the frequency of invoicing. Companies that invoice clients biweekly or monthly will see a dramatic improvement in cash flow and revenue when a change is made to invoice weekly or daily. 

6. Offer incentives for clients to pay invoices early. Cash discounts are inexpensive with a side benefit of strengthening client loyalty. Discounts serve to reduce DSO (Days Sales Outstanding). 

7. Reduce barriers for clients to pay invoices by accepting all credit cards and other electronic forms of payment, including PayPal and wire transfers.

8. Start charging for items that were previously free. Airlines used to ship luggage for free. Those same airlines now charge passengers for checked baggage. Overnight, a cost center became a profit center now generating billions of annual revenue. 

9. Build a written credit and collections policy, and repurpose talent and time to enforce it. Be clear on invoices when payment is expected by including a date. Whoever does collections must keep excellent records for follow-up purposes.

10. Create a client loyalty program. The cost of gaining a new client is seven to eight times more expensive than keeping an existing one. This should be a priority to implement.

11. Offer discounts to spur buying during slow periods. “Early bird specials” offered by restaurants fills seats for many eating and drinking establishments in a time that is otherwise slow.

12. Sell off the inventory of slow-moving products; then eliminate them from the offering.

13. Add seasonal items to the offering and promote as necessary. McDonald’s does this with its periodic offering of McRib Sandwiches, as well as green milkshakes for St. Patrick’s Day.

14. Promote new uses of existing products or services to new markets. Many people drink coffee every day, but coffee is also an industrial product in ice cream, candies, beverages, covered nuts and other food items.

15. Raise prices on secondary or tertiary items. Does it matter if the price of a pack of gum goes from $1.29 to $1.39? The answer is no. Raising prices on items not significantly impacting clients is a good revenue growth strategy. 

16. Terminate the worst clients. Revenue will initially drop but the burden of servicing will improve profitability.
Once freed from the energy drag of high maintenance clients, renewed vitality will be available to find better clients.

17. Address the lowest-performing salespeople. They are a hindrance on the organization; they have already quit but have failed to resign even though they are miserable. They stay because they need the money. Help them find a better fit inside the company or outside.

18. Perform a client analysis to demonstrate where sales opportunities exist with current clients. Can they buy more? What about products or services being purchased elsewhere? 

19. Set daily, weekly, monthly, quarterly and annual revenue goals for each sales person. The mere existence of goals improves performance.

20. Set revenue goals for each client by month, quarter and year by product or service.

21. Assign every manager to a client as an account manager. This creates a culture focused on client retention, follow-through and revenue growth. 

22. Create written marketing, sales, advertising and public relations plans that include social media.

23. Evaluate every job to determine what percentage of work time is spent on revenue-producing activities.

24. Be crystal clear on the niche the business is in. Otherwise, distractions will constantly appear brilliantly disguised as opportunities.  

25. The fastest way to grow revenue is to raise prices. Price increases should occur regularly, based on the increased cost of doing business.

Ken Keller is chief executive officer of STAR Business Consulting Inc., a company that works with companies interested in growing top line revenue. He can be reached at (661) 645-7086 or at KenKeller@SBCglobal.net. Keller’s column reflects his own views and not necessarily those of The Signal.

Comments

Commenting not available.
Commenting is not available.

 
 

Powered By
Morris Technology
Please wait ...