Balancing annual revenue against the cost of operation results in profits — the key figure that indicates overall performance, financial stability, and future growth. Naturally, every company needs to trend upwards in order to survive, expand, and meet the changing needs of the market. But are you maximizing the value of every sale with cost-effective production methods?

Business strategy consultants note that maximum profit does not simply hinge on achieving sales targets. A key component of financial viability is keeping costs low to maximize sales revenue and sustain long-term operations. The result is increased cash flow that helps guarantee survival — more than enough to surpass the crucial five-year mark and scale your business model for future growth.

Eager to maximize profits? Business strategy consultants. Like ours at startMYplan, share simple, but effective tips to prevent losses, maximize costs, and flip revenue into actual profitability:

Convert Single Sales into Recurring Profits

Why stop at a single, one-time purchase when you can convert this into a recurring and reliable profit? By establishing a long-term relationship with clients, they are more likely to purchase more from your business, subscribe to services, and trust you with their changing product or service requirements.

More than increasing profits, these revenue-generating activities engage customers enough to advocate for your brand to family and friends, and buy into product or service upsells as your business model evolves.

Subscription or Recurring Billing

Business strategy consultants recommend offering products and services with recurring billing options to entice customers with the minimal upfront cost compared to large one-time purchases, as well as keeping in touch through regular newsletters, thank-you notes, and other minimal-effort, but high-impact points of contact.

Offer Smarter Discounts

When offering discounts, explore discounting shipping costs to promote a better overall customer experience, without cutting into projected profit margins. This leaves customers the impression of excellent, personalized service that goes the extra mile without impacting your bottom line.

Build a Referral Program

There isn’t a more effective advertising strategy than customer referrals. Buying ad space on Google, Facebook, and Instagram are all necessary to grow your reach, but customers will always trust what they know.

A referral program helps build lasting customer relationships with perks, like discounts on their next purchase or giveaways, in exchange for sending family and friends unique promo codes. In the process, you create an impactful conversation about your brand — a community that is driven by genuine client testimonials based on genuine product or service experiences.

Customers are more likely to trust the experience of their family and friends than targeted advertising and take their advice when shopping for similar products and services.

Cut Losing Products

What are your best-performing products and services? Staying in business means constantly evaluating your approach and business model to determine the most effective revenue sources, and expenses causing capital to bleed.

Review Current Product Offerings

Business strategy consultants recommend reviewing product and service performance periodically to determine net profits against production costs. Consider eliminating low performing products and services, and reallocate costs to boost the promotion of best-sellers.

Prior to elimination, determine the role of underperforming products and services in your business model: are these entry-level or luxury goods? Or are they simply add-ons that don’t impact your bottom line? Based on your findings, you can implement a gradual phase-out timeline and dispose of remaining stocks at discounted prices, while positioning alternatives or new offers.

Upsell and Cross-Sell

Once you’ve recouped your losses, you can focus on upselling to existing customers to boost sales for better-performing and higher-priced products, and earn increased average profit per transaction. Similarly, consider cross-selling or promoting related products to promote brand loyalty and highlight compatibility and other cross-platform or cross-product performance.

Reach New Markets

Building long-term customer trust is essential to maximizing profits, but business strategy consultants also recommend keeping your options open. This means exploring new markets to widen your reach and appeal to a broader market segment. You can leverage these new customer interactions into increased sales and profits.

Target a New Market Segment

Considering expanded demographics such as location, gender, age, occupation, and other market indicators broadens your prospects — and there’s more than one way to reach out.

Leverage Indirect Sales Opportunities

Aside from targeted ads, consider complementary content and other offers, such as blog posts, how-to content, and referrals to maximize opportunities, such as brand awareness that can funnel into sales and long-term customer relationships. The key is always to consider who else would be interested in your products or services, in addition to a market you’ve already exhausted.

Streamline Your Sales Funnel

How long does the customer journey take? In examining current and projected profitability, business strategy consultants, like our ones at startMYplan, recreate the customer journey and various touchpoints: the first encounter, such as an ad or customer referral, followed by an initial inquiry, a sales pitch, then the purchase or service activation, confirmation, and review, and when applicable upsell, or cross-sell. A business strategy consultant aims to discover where bottlenecks are present, which ones cause delays in sales or customer churn, and which leads to profit losses.

Eliminate Customer Journey Bottlenecks

In assessing the customer lead-to-sale rate and the average cost of customer acquisition, you can also discover other factors that hamper the sales funnel. The most common are steep pricing differences compared to competitors, tedious steps like filling out overly detailed forms, and poor customer service. Streamlining these steps allows you to eliminate customer fatigue and facilitate the successful conversion of leads to sales — and capital to profit.

Revamp Your Internal Structure

This is also a good time to address internal issues that impact sales and profits. For many small businesses, these are tied to limited personnel and operating capacity, which can lead to fatigue among owners who take on non-essential tasks.

Rather than overburdening yourself with customer support, product design, marketing, and accounting, consider which of these can be delegated. This is especially important for owners who are often involved in product manufacturing or service design themselves; everything else, while important, takes them away from what they do best and need to do most. For cost-effective operations and profit security, consider delegating these tasks or eliminating them in-house, such as outsourcing or shifting marketing strategies.

For more simple tips to help you maximize your sales funnel, call startMYplan’s business strategy consultants at 1-888-831-6716, or contact us here.