As a business owner, driving revenue growth is always top of mind. Year over year, increasing revenue demonstrates your business is able to retain and attract new customers and produce products or services that are competitive within your industry.
Of course, it’s not always exponential. More often than not, you’ll see incremental revenue changes. “It starts with putting one foot in front of the other, day by day,” says Brad Charron, CEO of Aloha, on an episode of the Shopify Masters podcast. When you learn how to increase revenue one step at a time, as Aloha did, you can set your business on a path to success.
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What’s the difference between revenue and sales?
Within the context of business operations, revenue is the total amount of income a business takes in from sales, investments, partnerships, leases, and other business arrangements. Sales, meanwhile, refers to the volume of products or services you sell to consumers. Generating more sales can increase revenue, but sales volume is just one variable to consider when you’re striving to boost revenue generation.
How to increase revenue for your business
- Set clear goals
- Optimize pricing strategies
- Widen your consumer base
- Encourage customer retention
- Leverage data
- Develop new products and services
- Bundle offerings
Regardless of the size of your business, there are many ways to drive revenue growth. Here are seven strategies successful ecommerce brands have leveraged:
Set clear goals
To achieve business growth, it is imperative you set specific and achievable goals. For example, you may aim to increase sales revenue by 15% over the next year or double your existing customer base. Try setting both short-term and long-term goals so that you can see steady progress toward your objectives.
Ridge, an accessory brand known for its metal wallets, regularly sets goals for incremental revenue growth. One such goal was to grow Ridge to $100 million in revenue per year. By implementing smaller strategies like price changes and expanding to new markets, it eventually hit and exceeded its goal.
Optimize pricing strategies
For your pricing strategy, you might try increasing prices to boost your average transaction value, decreasing prices to gain a competitive advantage, or offering promotional pricing to increase sales.
Frequently reviewing your prices is a good way to ensure you are maximizing your profit margins, ultimately leading to more cash flow. Study consumer spending habits to understand how much wiggle room you have to work with and settle on the price that you believe could lead to the most increased revenue. Some trial and error may be necessary.
By implementing pricing scripts (i.e., code that alters prices based on membership length and sales trends) into their ecommerce shop, Tamburlaine Organic Wines was able to increase its online sales by 88%. The slight differences in price, combined with strategic promotions, were able to shift the company’s revenue dramatically.
Widen your consumer base
In simple terms, more customers means more revenue, yet finding potential customers can require you to try myriad business tactics.
Customer acquisition, or the process of finding new customers, may take the form of improving SEO practices to appear more frequently on search inquiries, creating targeted marketing campaigns that align with the interests of your audience, and expanding into new markets to create new customer segments. If digital awareness is your goal, you could also partner with influencers or run pay-per-click (PPC) ads on social media platforms.
Noel Mack, chief brand officer for Gymshark, an athletic apparel company, advises taking note of which online platforms your audience uses if you want to widen your customer base. Gymshark partnered with several fitness influencers after Noel noticed they were promoting their daily gym outfits on TikTok. This move expanded the brand’s reach to potential new customers, helping to increase its following to 5.7 million users on the platform.
Encourage customer retention
Gaining new customers is essential, but keeping existing customers is equally as important. Foster customer retention by providing exceptional customer service throughout the purchase process. One way to bolster customer satisfaction is to utilize a customer relationship management (CRM) system.
A CRM lets you track customer preferences and automate marketing campaigns that target customers by promoting products or services that are similar to their previous purchases. Additionally, you might create loyalty programs like membership benefits or personal discount codes that incentivize repeat purchases.
After Aloha determined it needed a better system in place to improve customer relationships and drive repeat business, it replaced its static, outdated website with a Shopify Plus shop. With the new ability to customize its subscription options, personalize email marketing efforts, and better showcase its products, the brand saw a 289% increase in sales and a 254% increase in total orders.
Leverage data
To leverage the value of data analytics, aggregate your consumer data related to purchase behavior, customer feedback, market demand, and other key metrics. By analyzing market trends, you can gauge how well certain products are selling, generate ideas for future offerings, and optimize your marketing and sales strategies.
When shoe brand Rollie Nation examined its page refresh time and bounce rates, it observed that it wasn’t keeping up with the speeds of competitors’ websites, causing many customers to leave the shop before arriving at the point of sale. To counter this, the brand switched its online store to Shopify Plus, which led to an increased conversion rate of 3.5%.
Develop new products and services
Developing additional products can be an effective way to create new revenue streams, especially if doing so lets you tap into new markets. Start by using available data to evaluate emerging trends or unmet customer needs—ideally, you want your product to fill a gap your competitors haven’t yet. “It has to be new and novel and interesting. It has to be compelling. But it also has to meet the needs of the consumer,” Aloha’s Brad Charron says. Ensuring your product adds value to your customers’ lives will help you maintain or even increase customer loyalty.
Bundle offerings
Creating bundles of products or services can be a great way to increase sales volume and yield the most revenue from paying customers. Bundles can add an incentive by discounting each individual product, encouraging customers to increase their average transaction value (ATV). Try bundling two similar products or cross-selling from different categories to showcase products to new customer segments.
Tropeaka, an all-natural nutrition brand, launched a promotion to include a free gift from its product line with every order. This simple incentive increased the company’s average order value by AU$5 across 15,000 sales per month, leading to an unprecedented boost in sales revenue. Consider employing these types of sales strategies in your slower seasons to mitigate anticipated dips in revenue.
How to increase revenue FAQ
How can revenue be increased?
Generate more revenue by closing more sales, widening your pool of potential customers, diving into new markets, developing new products or services, and prioritizing customer retention. Set realistic goals in each of these categories and track your progress with clear metrics to ensure you are generating revenue.
How do you track revenue?
Track revenue by analyzing metrics like total sales year over year, profit per sale, total web traffic, and engagement rates for advertisements. If these metrics are not showing a positive trend, leverage marketing and sales strategies to shift results.
Is revenue the same as sales?
While sales are an integral piece of revenue, they are not the same. Revenue encompasses sales, investments, advertising proceeds, subscriptions, and other forms of income that aren’t directly due to the sale of a product or service.
