The Secret Ingredient to Increasing Revenue
- How to increase the average order value
- How to increase purchase frequency
- Use email marketing to present offers and special deals
- It’s easier to sell to existing customers than new customers
When most people think of CRM, they think of a place to store all of their customer information. And while it’s easy to get caught up in implementation, cost and customization, the key to CRM is in its data – And actionable data.
This powerful data allows you to get more sales for your business.
There are three possible ways to increase revenue for your business;
- Increase the number of people who make a purchase
- Increase the average order value on each purchase
- Increase the number of purchases
If you’re like most businesses, you will be solely focusing on the first one – Finding and attracting new customers. In order to reach new customers, marketing will focus on activities that include content marketing, search engine optimization and banner advertising while sales teams use email templates for prospecting, or cold calling.
It’s not a bad thing to focus on new customers; it’s just that it’s really expensive and the most difficult of all three. In this blog post, we will explain how you can grow sales and revenue by using customer data to increase the average order value and number of purchases from your customers.
How CRM Software can help you increase the average order value
It’s obvious that if some of customers buy more than the average order value that your sales will increase. Therefore, you need to give them opportunity to do that in an irresistible way. And this is where you can use your CRM software to help you upsell.
Stage 1: Upsell Immediately
The best upsells are products or services that are complementary to your initial product, and that they make sense to go together. For example, when you purchase a new pair of shoes, the sales assistant will ask if you would like to buy a special shoe polish – This is an example of upselling immediately. Another example is when you buy a scarf; it’s fairly likely that you will need a pair of gloves and a hat to match too.
Use your CRM software to help you immediately present an upsell offer to the customer. Once a purchase has been made by a customer, use their purchase history to present related products that they have not yet bought, whether that’s related products, recommended products or products what the customer “might be interested in”.
Stage 2: Upsell later on
The second way to increase the size of the average order value is to present the customer with an upsell further down the purchase cycle, after the initial purchase has been in use for some time.
Although this is similar to purchase frequency, it differs in the sense that instead of purchasing the same product again, you are offering a bigger, better, faster version to the product. Your CRM software will tell you what product the customer has, how long they had the product for and if you know the expected lifetime of usefulness of your product, you can then upsell the customer at the right time.
For example, a company that sells shampoo knows that that after two months, the customer will need to buy it again. Providing the customer has enjoyed using the product, the company can promote a new offer that includes both the shampoo and matching conditioner.
This is an upsell and an increase in the original order value, and it is all achieved through CRM software that keeps track of where in the lifetime sales process the customer is, and therefore provides a relevant and timely upsell opportunity.
How CRM Software can help you increase purchase frequency
Related to upselling at a later stage is being able to increase the frequency of purchases that your customer makes. It sounds simple but, if you increase how often a customer makes a purchase with you, your sales will increase.
Think about how often you communicate with your existing customers. Do you communicate with them once per week, or even once per month?
It might sound obvious but, the longer you go without communicating with your customers, the less likely they are to purchase from you. As long as you can maintain a relationship with your customers, it will be your business they think of when they have a need for the products again.
Your CRM Software gives you the opportunity to collect your customer’s details; use these details to maintain a relationship with them, and deliver helpful and relevant information so that you can increase the frequency of purchase.
Use email marketing to present offers, promotions and special deals
A great way to increase how often your customers purchase from you is by using email marketing to send offers and promotions.
By promoting new offers to your customers, you’re prompting them to think about whether what want what you are offering. And just by making them think about the offer, you’re giving yourself an opportunity to get more sales than if you didn’t offer anything at all.
Make sure that you are presenting offers to your CRM database, and use your CRM software to segment your customers in order to present a relevant offer to each customer. By doing so, you are giving yourself the best possibility to increase the frequency of your sales.
It’s easier to sell to existing customers than new customers
If a customer likes a product or service, they are much more likely to buy from you again. And they are much more likely to trust your business compared to a person who has not been introduced to your business before.
This is natural. You have established a relationship built on trust.
It’s also the reason why it’s much more expensive to sell to a new customer than compared to an existing one.
And it is with those customers that you are more naturally comfortable with. Existing customers are much more open to buying from your business for a second or third time, which makes it so much easier to sell your product to them.
This is where your CRM software can really help increase your revenue. It’s the reason why you have CRM software in the first place, right?
You want to be able to market to your existing customers in a way that is relevant to them and effective in terms of sales for you.
CRM is at the heart of any business.
Use CRM software to increase sales opportunities with customers, increase purchase frequency and average order value to give you a healthy return on your CRM investment.
While your competitors are spending their marketing budgets on acquiring new customers, you can use the secret ingredients of CRM and its data to increase revenue.
How do you grow sales and revenue for your business? Let me know by leaving a comment below.