Getting more sales certainly is the dream of many businesses, which will directly translate to more revenue and profit. However, what actually is the most effective marketing tactics in increasing sales?
The answer to that question will depend on many different factors from business types, sizes, industries, and so there are many different tactics and strategies covering different areas.
However, actually there are only four ways to achieve more sales. Below, we will discuss them one by one, as well as how to implement them to effectively grow your revenue.
Let us begin with the first one.
Raising Your Price
Obviously raising your product will translate to more revenue from each transaction. Yet, the key here is not to lose the volume of transactions after the price increase, or even better, increase your sales volume.
Here are some of the tactics you can consider:
1. Communicate your value proposition better
Customers are not essentially buying your products, or services, but rather the benefits tied to them. So, if you can properly communicate your value proposition before and after the price increase, you can convince them that they will get more benefits after the increase, and thus justify the price.
However, a value proposition will only be effective if you can deliver your promises. So, a common tactic is to increase the perceived value of the product along with the price increase. For example, you can introduce a new feature while increasing the price of your app.
2. Increase Gradually
You can increase your price gradually to minimize resistance. Yet, you will be raising your price more often with this tactic.
A good way to implement this tactic is to combine it with the first one: as you are increasing your prices gradually, also increase perceived value little by little.
3. Be Honest
You can communicate your reason(s) for a price increase, which especially works if rising cost is the main reason. Never lie about the reasons, and be very careful when doing this tactic when your competitors are not rising their prices. Use competitive analysis accordingly before you attempt this approach.
This is a fairly common approach nowadays: keep selling a more affordable (or even free) version of your product, and sell a more ‘premium’ version with more features. An advantage with this tactic is what we call price anchoring: by putting a product next to a more expensive one, customers can perceive it as more affordable.
Have More Customers
This one is fairly obvious: by acquiring more customers, it will translate into an increase in revenue. However, as with the price increase method above, there are some disadvantages with this one.
Acquiring new customers can be expensive and difficult, and we can end up losing our profit margin if we are not careful. So, here we will discuss tactics that can tackle this issue:
1. Email Marketing
Even with all the new marketing channels and technology, email is still one of the marketing channels especially in acquiring new customers. Email marketing offers an ROI of 4,400%, higher than other marketing channels.
In modern email marketing campaign, however, personalization is the key to success, namely sending the right message for the right people at the right time. This is where many different tools can assist you to automate the email marketing process, a concept we call drip campaign.
2. Content Marketing
Content marketing is not only effective in new customer acquisitions, but also effective in various stages of the buyer’s journey. The idea on using content marketing here is to publish valuable, informative content pieces for those who are needing your products, thus acquiring their trusts. This is a concept we call inbound marketing.
One thing to keep in mind is that your content will only bring value when it’s visible, and this is where the importance of content promotion and especially SEO comes in.
3. Conversion Rate Optimization
It is quite often we fail to generate more conversions because our business process and especially our website is are not properly optimized for conversion.
Conversion Rate Optimization (CRO), in essence, is optimizing your site to encourage conversions, and can significantly help in converting prospects into real customers. You might want to check out this guide from Moz on CRO.
Increasing Frequency of Transaction
If above we discussed how to acquire more customers, here we will discuss how we can optimize the retention of existing customers, encouraging them to buy more often from you.
Obviously, this method will work better with more affordable products: it is far easier to increase purchase frequency for a $5 product compared to a $1,000 watch.
Here are some tactics we can consider for this method:
1. Leveraging Social Proof
With how transparent our digital marketing landscape is nowadays, people are looking for social proofs like reviews and testimonials to justify their purchases. Leveraging social proof can be very effective not only in optimizing retention but also in acquiring new customers.
Encourage your existing audience to write positive reviews, probably by offering incentives like discounts, freebies, and so on. Also, use influencer marketing to help establish your credibility.
2. Customer Loyalty Program
A great customer loyalty program can offer exclusive benefits to existing customers, encouraging customers to purchase more often. The key to success here is the incentive: give too little and it might not be interesting, give too much and it might hurt your profit margin.
3. Flexibility in Payment
Improving transaction frequency, as we have mentioned, can be difficult when your product is expensive, or when your customers simply don’t have the budget.
So, here we can offer flexible and easier financing options like installments to encourage repeat purchases.
4. Retargeting (Remarketing)
Retargeting can be a very effective tactic to encourage repeat purchases. In essence, remarketing is showing your advertisements to prospects who have visited your site or have triggered certain actions (in this case, we can target those who have made a purchase certain weeks/months ago).
By showing optimized, and even personalized promotional messages to this specific audience, we can increase the chance of conversions.
Improving Transaction Size
This is quite similar to the above method in the sense of improving customer retention. However, instead of increasing transaction frequency, here we aim to increase the average amount per transaction.
We mainly attempt this method through upselling and cross-selling, and here are some key tactics to consider:
1. Be Realistic
Don’t force upsells and cross-sells in any situations you face. Nothing is more annoying than asking a company for a simple issue but is offered with endless “opportunities” instead. Only offer upsells and cross-sells when the specific customer has needs or problems that need to be addressed by the additional product.
2. Proper Segmentation
Not every customer is ideal for upsell and cross-sell: they might be limited by budget, urgency, or other factors. So, here we will need to determine the most profitable customer segment(s) that is worth your effort.
Above, we have mentioned how all the marketing tactics to increase sales will boil down to just four big groups: raising your price, increase sales frequency, increase the size of each transaction, and to acquire more customers.
They key to success, however, is still to properly understand your audience: know their needs, problems, and behaviors, and address those needs accordingly.