Dan Martell - April 11, 2016


How To Increase Revenue In Your Business


Episode Stats

Length

3 minutes

Words per Minute

217.0962

Word Count

789

Sentence Count

23


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Transcript

Transcript generated with Whisper (turbo).
00:00:00.160 How do you make more money?
00:00:02.520 Or how do you increase your revenue?
00:00:03.640 Or better yet, profits.
00:00:05.720 You know, I believe that profits solve all problems.
00:00:08.600 In this video, I'm gonna share with you guys
00:00:10.400 my experience in learning how to do those things.
00:00:13.160 How do you increase the amount of money
00:00:14.960 you make in your business?
00:00:15.800 How do you grow faster?
00:00:17.560 And it was really through this kind of challenge
00:00:20.000 that I went through in my last company, Clarity.
00:00:21.520 Clarity is a marketplace for entrepreneurs
00:00:23.240 to get expert advice from other entrepreneurs
00:00:25.240 over the phone, kind of like Airbnb for entrepreneurs.
00:00:28.880 And, you know, the business model was that we took a 15%
00:00:31.940 transaction fee, but the truth is, is once we ran the numbers,
00:00:34.920 we realized we needed to increase a lifetime value
00:00:38.040 of a customer, that is, the value of a customer over time
00:00:40.680 based on their current pattern of purchasing.
00:00:43.740 So what I wanna share with you guys is the lessons
00:00:46.080 that I learned spending months studying,
00:00:48.840 understanding pricing, and really figuring out
00:00:50.980 there's only three different levers that you can pull
00:00:54.260 to increase your revenue, increase your growth,
00:00:56.200 and ideally increase your profits in your business.
00:00:58.500 The first one is to charge more.
00:01:00.500 It sounds crazy, because a lot of you guys are thinking,
00:01:02.340 well if I charge more, my customers will leave.
00:01:04.200 And you know what, maybe some of them will.
00:01:06.080 Maybe 10% may do that.
00:01:08.080 But I would challenge you, and my argument for you is,
00:01:10.620 ask yourself, what value can I create for my customer?
00:01:13.720 If I only increase my prices by 10%,
00:01:16.420 what value could I add to make sure that that's justified?
00:01:19.580 And that's the best question you could ever ask yourself is,
00:01:22.020 how can I add more value to justify the increase in price?
00:01:25.000 So the first lever, the easiest thing you can do
00:01:27.260 is just put your prices up by 10%.
00:01:29.120 The second one is to increase the average transaction size
00:01:32.960 for a purchase, and that means, you know,
00:01:34.940 if you're currently selling something, it's $100,
00:01:37.480 how can you make the average transaction size 10% more?
00:01:40.700 So $110, and the way to think about that is,
00:01:43.740 ask yourself, what are the other challenges
00:01:45.980 that your customers might be dealing with?
00:01:48.020 If they buy your product, what are other things
00:01:50.240 that they might need, because you know
00:01:52.120 if they're buying that product, they're on this journey,
00:01:54.480 that you can bundle or add to that purchase,
00:01:57.160 And you've seen this, I mean, the ultimate,
00:01:59.420 if you wanna see this in real live action, is GoDaddy.
00:02:01.600 Go try to buy a domain and walk away with just the domain.
00:02:04.840 You know exactly what I'm talking about.
00:02:06.660 They've really perfected this idea of an upsell and a downsell
00:02:09.800 and those are all there to increase
00:02:11.240 the average transaction size of a purchase.
00:02:13.840 It's not about a $20 domain, it's about the hosting,
00:02:16.720 the email support, the design work, whatever you need.
00:02:20.340 They've really figured out how to increase that
00:02:22.380 because the more you increase it,
00:02:23.660 the more profit you're gonna have, the more margins
00:02:25.280 you're gonna be able to reinvest into your business.
00:02:27.740 The third thing you can do is increase the amount of times
00:02:31.080 a customer purchases, right?
00:02:32.720 So if you think about it, on average,
00:02:34.260 maybe a customer purchases one time a year,
00:02:36.560 you gotta ask yourself, what can you do in your business
00:02:40.500 that would increase that to even, again,
00:02:42.640 I like the number 10%, what if you could increase it
00:02:44.640 to 1.1, what would need to be true?
00:02:47.000 What could you offer, what would that look like
00:02:49.580 to increase the amount of times they purchase?
00:02:51.600 Because check this out, this is some really cool math.
00:02:54.040 If you can get your price up by 10%,
00:02:56.620 you can increase the average transaction size
00:02:59.320 of that first purchase by 10%,
00:03:01.420 and you can increase the amount of times
00:03:03.100 the customer buys by 10%,
00:03:05.600 you can grow your business by 33% this year
00:03:08.620 by just doing those three strategies.
00:03:11.160 And that's what I wanted to share with you guys
00:03:12.840 and get you really excited about the opportunity
00:03:14.940 ahead of you to really take your business to the next level,
00:03:17.320 to really think about strategically those key areas
00:03:20.760 to really get the most revenue out of your business.
00:03:23.020 So with that, if you know somebody that needs to see
00:03:25.260 this video, please share it with them so they can get
00:03:27.660 this information, but I'd also ask you to like and comment
00:03:31.420 on the video with your questions, and I want to
00:03:33.540 challenge you, as per usual, to live a bigger life
00:03:35.660 and a bigger business, and I'll see you next Monday.