Pitney Bowes Bank

Increase profit

There are generally five ways to increase your profit in your business, each having a multiplier effect. Rather than trying to double your sales which is often difficult to do in a short period of time, you’re better to try and increase each of these five aspects by 10% for cumulative results.

Increase your leads

First, build the number of prospective customers. By interacting with greater numbers of people, you’ll increase your chances of turning more of them into customers.

Make more people aware of your business by:

  • Identifying your most successful promotional tactics and repeat
  • Profiling your best customers and contacting them directly
  • Attending industry events and conferences to meet potential customers
  • Re-developing your website for new search engine optimization opportunities
  • Developing new distribution channels – think about using agents, licensing your goods, or utilizing new distributors
  • Asking current clients to provide referrals
  • Actively ask people to get in touch by creating calls to action or incentives through promotional material, your website, blog advice, social media platforms, and free trial offers
  • Running webinars or speaking at events

Anything you can do to get in front of new customers is a valid tactic.

Convert more of your leads into customers

Once you have more leads, increase your conversion rate. Even converting ten percent more into customers should generate significant sales.

Measure your current conversion rate (for example, the number of unique users to your website divided by the number of online sales) and then consider the following:

  • Organize training for staff on selling techniques and closing methods. Provide staff with incentives or bonuses for higher conversion rates
  • Run demonstrations for potential customers to see what you have to offer and how they could benefit. 
  • Create whitepapers or research content to encourage people to register or download content for you to then follow up and close the sale.

You can also consider running loss leaders: products or services at below cost to convert customers across to your business and then sell to them over their lifetime value.

Increase the number of items you sell per customer

If you can entice your customers to buy just one more item, hour, or extra service from your business, your sales (and your profits) will increase. Add-On selling is a classic tactic to improve your profit.

Other tactics include:

  • Adding impulse/lower cost products at checkout or a final sell when closing
  • Asking customers what else they would be interested in buying from you and then widening your product range to accommodate their needs
  • Bundling products together
  • Offering complementary services
  • Researching competitors to find new product or service opportunities
  • Adding services if you sell products, adding products if you sell services.

Increase your average sale

If you can increase the average value of each sale, you’ll directly improve your profit.

Try:

  • Listing your highest margin products and services. Check that they are profiled on your website, that they have the most promotional budget allocated to selling, and that they are the first products to be sold
  • Ensuring all employees know to sell those products with the highest average sale price and there are incentives when they sell.
  • Increasing prices. Even small improvements (like one to five percent) will show direct profit results
  • Introducing new premium products or services that have a higher value.

Increase net profit percentage

Net profit can be improved by looking carefully at your gross and net margins.

Try these tactics:

  • Review all of your main suppliers and determine if you can swap any out for lower-cost providers. Double check that any new supplier can match the quality and service you expect. Re-tender or ask suppliers to re-quote on a regular basis
  • See if you have any components or parts of your business that can be subcontracted out to cheaper suppliers. Check that this tactic won’t impact on what your customers expect (for example, locally made versus imported). But if the component is a small part of what you provide, customers may not notice or mind
  • Identify your top five overhead costs to find savings. Overheads such as power, insurance, office supplies, internet, subscriptions, and communications often reduce in price year by year. Make sure you’re getting these reductions
  • Trim employee costs if possible. Review roles and responsibilities to find any overlap – you may be able to get by with fewer people on the payroll.
Pitney Bowes Bank understands the unique financial challenges of small- to mid-sized businesses. We provide real-world financial solutions that complement your existing bank relationships and are focused on your long-term objectives.

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