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With costs rising and labor shortages in almost every industry, it’s a difficult time for many businesses to grow. However, despite these challenges, there are still plenty of unique ways to boost profits and propel your business to the top of your niche.
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5 Growth Tactics to Boost Your Profitability
As you look to increase your profitability in spite of rising costs, you’d be wise to consider some of the following tactics:
1. Boost Your Profits by Automating Where Possible
Automation isn’t scary or intimidating. It’s your friend. And while it might seem too complex or technical from the outside looking in, the truth is that automating is easier than ever. Thanks to intuitive software and applications, even the most traditional businesses can instantly get a boost from the right automation.
The key is to pick your spots. You want to automate where it makes the most sense. In other words, where is it going to save you the most time, energy, effort, and money?
For example, if your business has a fleet of vehicles, then you know just how time-consuming and expensive it can be to maintain these vehicles. Investing in fleet maintenance software that streamlines manual tasks could be a game-changer. It allows fleet managers to achieve the lowest operating cost by increasing compensating transactions from warranty to core returns while streamlining parts, labor, and fuel costs. Why wouldn’t you take a little time to learn how to implement it?
2. Upsell and Cross-Sell
Your existing customers are your most profitable customers. It costs a lot more to go out and add a new one than it does to work with what you’ve got.
Once a customer decides they’re ready to buy, you need to strike while the iron is hot. To drive your profits through the proverbial roof, you have to increase average order value (AOV). One way to do this is by upselling and cross-selling at the point of original purchase. Contrary to popular belief, you can do this regardless of whether you sell physical products or you’re in a service-based field.
3. Reduce Superfluous Expenses
When trying to boost profitability, it’s easy to get so focused on increasing revenue that you forget all about the other side of the balance sheet. Just as an extra dollar earned increases profitability by one dollar, a dollar saved does the same. And in many cases, it’s easier to reduce expenses than add revenue. (Though you should ideally be doing both simultaneously.)
The key is to eliminate the right expenses. Focus on non-essentials that aren’t directly contributing to your revenue. By stripping them away, you free up cash flow to focus on expenses that do move the revenue dial.
4. Forge Strategic Partnerships to Give Your Business a Boost
Don’t waste a ton of resources pursuing investments that are outside of your wheelhouse. In other words, let’s say you have a really powerful product, but you don’t have an audience.
While it’s important to gradually build your own audience, this is a long game that requires months and years of branding, marketing, and advertising. Definitely invest in these areas, but don’t sit back and let time pass. In the short term, forge strategic partnerships with influencers, entrepreneurs, and brands who do have an audience that is hungry for your product.
This is a much more efficient way to grow.
5. Get Better Return on Your Marketing Investments
Consider where you’re spending on marketing and whether it’s actually giving you the results you need. So many businesses think they’re marketing or advertising, when they’re really just investing in expensive branding. And do you want to know the truth? Traditional branding is not always a wise investment for the majority of companies.
While brands like Coca-Cola and Disney have billions of dollars to spend (and often shell out nine-figure sums for branding campaigns), the average company doesn’t have the budget or reach to make branding worth it. You’re better off doing direct-response marketing and advertising, which gets people to take action.
Having said all of this, analyze your marketing spend and see where you can increase your return on investment (ROI) to give your profits a boost. The results may surprise you.
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Ready, Set, Grow
While larger marketplace conditions and economic factors certainly have a tremendous influence over business growth, it’s possible for individual companies to experience growth or contraction in any kind of market.
Despite talent shortages, rising costs, inflation, and supply chain issues, it’s possible for your business to grow at this precise time. In fact, many organizations have experienced more growth at faster rates than ever before over the past couple of years.
The question is, why not you? Why can’t you grow your business and boost profitability during this unique time? It’s not as impossible as many make it out to be. Put these tactics into action and get to work!
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