Dan Martell - How To Increase Revenue In Your Business

How do you make more money? How do you increase your revenue? How can you grow your business faster? In this episode of the eCommerce Lifestyle podcast by me, Natalie Barbu, I'm going to share with you my experience in learning how to increase the amount of money you make in your business, and how you can grow it even faster.

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.

Dan Martell - April 11, 2016

How To Increase Revenue In Your Business

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