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This episode is brought to you by Indeed. We're driven by the search for better. But when it comes to hiring, the best way to search for a candidate isn't to search at all. Don't search. Match with Indeed. Use Indeed for scheduling, screening and messaging so you can connect with candidates faster. Listeners of this show will get a $75 sponsored job credit to get your jobs more visibility@ Indeed.com SBO terms and conditions apply.
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Welcome to the Candy Valentino show, the podcast for founders, investors and entrepreneurs where we have honest conversations about what it takes to grow your business, build more wealth, and create financial freedom.
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Hey, guys, welcome back to another episode of the Candy Valentino Show. I'm so glad that you're tuning in with me today and spending this time to grow your business, grow your money, grow your wealth, and grow your knowledge. Because as you know, your net worth will never outgrow the amount of your knowledge. So today we're going to talk a little bit about business. Now, in the realm of the business world, I know that there is this constant pursuit of growth. Whether you're just starting your entrepreneurial journey or you're managing an established business, the ability to increase revenue will always be a primary focus for founders and entrepreneurs. And it's more than just having a brilliant idea or even a fantastic product. Your success hinges on one major thing. Your ability to capture and acquire customers, to generate sales, to maintain profitability consistently. And today, we are going to dive into all of the details and intricacies of real world revenue growth. So let's get started. Drawing from my last 25 years of experience, I've been seeing businesses of all sizes. Those you know, from $100,000 in revenue to their first million to their first 10 million. Regardless of size, the principles of revenue growth really remain the same. And everything that you hear gets boiled down into just a few things. And everyone that I know, every entrepreneur, every founder that owns a business, they all have one common goal. They want to increase revenue. They want to generate more sales. So regardless where you are in your journey, if you're scaling or starting or really ramping things up, understanding how to increase your revenue so that you can turn on that lever whenever you need to is really essential to your path for success. Now, it's one thing to start a business, but it is a whole other animal to consistently grow your revenue and maintain profitability. So let's get to it. We're gonna start with four fundamental ways that you can increase your business revenue. Let's break them down. Number one, customer Acquisition. Now, this is what most people think about when they think about increasing their revenue. However, there's other levers that you can pull which are actually cheaper and we're gonna get to that. Customer acquisition, very simply put, is just increasing the number of your total customers. Number two, average cart ticket. Now, the definition of this is just increasing the average transaction amount that you have per customer. The third is buying frequency or purchase frequency, depending on what type of business you're in. This is just increasing the amount of times in which your customer buys from you. And then last but not least, this is the one everyone goes to. But I would caution you not to. If it's raise your prices, increase the amount it costs to buy your service or your product, and we are going to take a deeper dive into this controversial topic in just a bit. But first, the holy grail in business, customer acquisition. Customer acquisition is the first pillar of revenue growth. Because if you can't figure out how to acquire customers and earn revenue in your business, none of these other things will ever apply. Profitability won't matter. Your team building skills won't matter. Your leadership abilities won't matter. You don't need to learn fulfillment and distribution, you name it. If you can't acquire customers, you need customers to have a business. So customer acquisition is a really fancy term for bringing in those new customers. It involves bringing in new people to purchase your products or services. It's about guiding potential. Maybe visitors or browsers from your website through your marketing funnel into that initial brand awareness to make their final purchase decision. Now, strategies vary for customer acquisition. It can be optimizing your SEO. It could be increasing social media campaigns, or discovering how to move potential customers through those phases of marketing more quickly from awareness to interest and consideration. And then eventually, ideally, purchase. Now, according to Masterclass.com, the customer acquisition process is in which a business converts potential customers to to paying customers. The customer acquisition process is typically broken up into three phases. We've got awareness, that interest or consideration that we talked about, and then of course, purchase. Now, strategies on how to acquire a customer will definitely vary depending on the business you're in. But generally they're built on these three principles. So let's break each down. So phase one is lead generation and awareness. And you can do this through creating brand awareness for your business through a variety of ways. How will you reach your potential customer? Where do they live? That's one of the most important questions that you can ask. And I don't mean like live in the demographic of the world. But where are they consuming information? Where are they trying to look for your products or services? This can be done in a variety of ways. Direct mail media and TV advertising, digital marketing, social media like Facebook and TikTok ads. Knowing who your target audience is, who your customer is, and knowing where you already acquired leads and purchasers from is the first indication for you to know where to go find more of them. For example, if you go and spend a bunch of money on Facebook ads, but you really didn't get a lot of return, a lot of ROI on that marketing dollar, do you want to keep running Facebook ads? No. Maybe you want to diversify your marketing and start to look at direct mail or start to do billboards because you have a local brick and mortar. When you really run the data in your business and you start to understand those KPIs, you'll be able to save on your marketing and sales budget and acquire more customers more easily. So that brings us to number two, interest and consideration. Providing information that encourages customers to make informed decisions. Now this can be done a variety of ways also, right? They don't make business easy. So it could be SEO, it could be retargeting ads, it could be a nurture sequence through email marketing. This phase will encourage a browser to maybe sign up for your email list, to inquire on a sales call or to engage on your social posts. The more informed potential customers are, the easier it is and the more likely it is for them to make a purchasing decision. Which brings me to number three. This is what all entrepreneurs and founders want. And I get it because the first two can take longer than we want. But number three of this whole process is the purchase and the conversion so you can facilitate this faster. There are different triggers that you can pull, like offering first time customer codes or discounts, or creating limited time offers or promotions where the customer may purchase one service or product and gets another one free. Sometimes that'll help them pull the trigger more easily and quicker. So what new customer incentives can you create? What can you offer? Since customer acquisition is the essential starting point for any successful business venture, it's really that process that lays the foundation for revenue growth. And I'll tell you, if you have never really done the work to identify who your target audience is, where they live this year, where you're actually getting leads from and conversions from, you might not even have a customer acquisition strategy at all. You might be posting and hoping or just waiting for the phone to ring. And that is a troubling situation for any entrepreneur. So do the work, take the time to really understand and master these things because it can really be the consistency that you're missing in your cash flow. And that brings us to really one of my favorite, average cart, average ticket. Because it will always cost you more to acquire a new customer, oftentimes five times more. But increasing your average cartoon can significantly impact not just your revenue, but your bottom line because you save in acquiring that new customer. Now these strategies are totally different. This can include upselling, cross selling, buying threshold incentives like hey, if you spend $75, we ship it for free. It could be a promotion, a loyalty program like a Starbucks or the airlines or the best one probably around, which is one of, I should say the Marriott Bonvoy program, right? Like these incentivize customers to sell, stick around to use their services or their products over and over again and ultimately leads to a better level of customer service. We discuss five effective methods for boosting your average transaction amount, which includes like I covered upselling, which would be somebody comes in to buy a cup of coffee and instead of you selling them a different product, you get them from a small to a large. Cross selling, on the other hand is they come in for a coffee and you sell them a scone. So you've also got buying thresholds where hey, I'm buying the coffee and the scone, but if you spend $10, you get double stars. You follow me? There's so many ways that you can really stack these to have your customers be more loyal to your brand and business and then buy more from you so that you're not always having to go out and acquire new customers. Number three, the buying frequency or purchase frequency. This focuses on getting those existing customers to buy from you more often. So the coffee buyer that comes in every day as opposed to once a month. So here are a few ways that you can increase your buying frequency. This is probably the best. If we just said this, one is probably all you would need. And it is promotions. Creating a sense of urgency that can prompt customers that weren't looking to buy from you to hurry up and add more items to their cart or hurry up and shop your website because of this last minute promotion that you have. Utilizing various promotional tactics like limited time discounts or physical coupons for very specific time frames, as well as maybe discount rates for bulk or free gift card with purchases only in this time. Right? You're always trying to create urgency and scarcity to increase your buying frequency. Next we've got loyalty programs. Now loyalty programs are pretty robust because they can increase your average cart and ticket and they can also increase your buying frequency. They are a very powerful tool for brand loyalty and retaining existing customers. Now research indicates, get this, loyalty programs can increase your average order value by over 20%. So if you don't have a points based system that has client benefits that rewards them for purchases, here's your sign. Start it now. Offer exclusive member split specials and promotions to incentivize repeat purchases and have those customers come back more frequently. Which brings us to this one. Now this one I love for many reasons, but in this world specifically that we're in this year, that we're in, especially with so many online companies right now, this is one that you can really stand out from your competition and that's by providing exceptional customer service. Customer service can significantly impact sales growth. Ensure that your business provides outstanding support before, during and after purchases. You want to strive to be like the Ritz Carlton of your industry. An effective customer service involves essential skills such as active listening and empathy and patience and problem solving and going the extra mile to meet the customer needs. It's very basic, but it's very critical. And this might seem like 101, but I can't tell you how often I see business owners missing this is that they don't answer the phone. Answer the phone, answer your inquiries, respond to emails, DMs, wherever your customers are trying to communicate. And leverage technology if you have to, to enhance that communication. You would be surprised how if you open communication to customers trying to reach you, how that can drive sales revenue up. Incorporating these strategies into your business can not only increase your buying frequency, it can increase your average order value. It can contribute to your revenue growth. It really adds to the overall value of the service that you provide and your company's bottom line. Now that brings us to one of the trickiest decisions you'll ever have to make. And that is our last one. Number four, Raise your prices. It is important for you to understand key metrics before taking a step like this. Understanding data analysis, understanding your gross profit, identifying which customers contribute most to your bottom line. It's about optimizing your pricing strategy rather than arbitrary increases. Because unfortunately, we live in a world right now where there's a lot of people on social media preaching for you to raise your prices. Charge what you're worth, charge more, Charge what you're worth. I'm sorry, you're a human with a heart and lungs. There's no price tag that you can put on a service that you offer. But the market does share what prices should be for whatever industry or vertical that you're in. So make sure that you take a serious look at all of the data at competition and what the market will hold before raising your prices. It really gives you a chance to reevaluate the critical elements of your business. So first, you have an opportunity to focus on value as it relates to all the expenditures you make to run the business. Now, of course, you want to provide quality service or products. You want to hire excellent employees. You want to provide healthy wages and other benefits for your staff. So determine whether each of these expenditures contributes to the value that you provide your customer or if it needs adjustment. Second, examining whether you should raise your prices really gives you a chance to reconsider the relationship you have with your customers. You may very well have some needy revenue draining customers that maybe you get a lot of interaction with, but sometimes they take up more time and more resources than the revenue they provide. And I understand giving up sales is extremely difficult. But you need to figure out whether keeping a current relationship with a customer really serves your business, your goals and your profitability. Pricing your products and services correctly and fairly may actually eliminate problem customers. The gross profit that you lose with those customers is then replaced by business generated from other customers that don't drain your profits and your sanity. That is, once you retain more of what you make with less work, you will enjoy your business more. And now third, your close examination of this also helps you identify and document your direct costs. Oftentimes, we're so busy in business that we're just trying to keep up with the day to day that we don't really pause and take time to really evaluate what kind of profitability we have in our business. So this will give you the opportunity to determine your gross profit, your gross margin, and what each of those services or customers are really providing. Performing this evaluation to decide whether you want or need or should raise your prices is a really beneficial exercise on its own. And if you've not delved this deep, doing so can really increase your business finance acumen and really help you clarify how the business is doing. After all, to assess your business's profitability, follow these key steps. Number one, Generate a report, whether it's a POS system or your CRM that just details your customer's sales volume and calculate the gross profitability for for each of those customers. And organize the report in descending order. Examine the lowest performing 20% of that list. And then step two. I want you to determine the gross profit, not the gross revenue the gross profit that's represented by this group and then reflect on these questions. How can you enhance your value and your pricing structure to replace the least profitable 20% of that list with more profitable customers just like the top 20%? Number two, do you have a premium product or a service that's ready to launch that maybe you can release so that you can allow some of those bottom 20% customers to go find somebody else to work with and attract better customers like your top 20%? And then identify how many new customers would you need to go acquire with that better profit margin and better sanity to replace that bottom 20%? Look, Prado's principle, which is guiding for so many things in life, but in business we're going to apply it here. It suggests that roughly 80% of the outcomes stem from just 20% of the work. This can totally be applied to our business and our customer profitability. The timing of pricing adjustments and customer changes should absolutely align with your business and your sales cycles. Evaluating and optimizing your pricing structure allows you to pinpoint values, ideal customers, and to establish appropriate prices for your business in your market. And now, by prioritizing revenue growth and really implementing these four growth principles that we talked about today, you will likely observe a very significant improvement in your business income. By mastering these four principles, you will gain valuable tools to navigate the landscape of business, not just now, but but for really years to come. All right guys, that's all I have for you today. I know this is a lot of information so you don't need to understand it all. We really only retain 7% of what we hear, so if you need to rewatch it or re listen, this took me years to learn. So you are not alone. If you love this episode, I'd love to hear from you. Drop a comment, ask your question. We would love and be honored if you would subscribe and share this episode to your business friends. Thanks so much for tuning in with me on this episode of the Candy Valentina Show. We'll see you next time. Hey guys, thanks for tuning in to this episode and if there was something that you loved or you had a specific takeaway, share it and tag me at Candy Valentino. And if you haven't already, grab a copy of my latest book, the 9% Edge Life Changing Secrets to create more revenue for your business and more freedom for yourself. You can pick it up anywhere books are sold, Amazon, Barnes and Noble, or your local independent store. And once you do, head over to 9% edge.com and claim $1,500 in pre order bonuses, including a chance to join me on this very show. Thanks so much for tuning in and spending this time with me today, guys. We'll see you next time.
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