There are three basic ways to increase the profitability of any business. This is increasing the average order value, the frequency of purchases or the number of customers.
Most online businesses tend to focus on the third point, throwing their main efforts into the fight to maximize traffic. The other two variables that affect profitability are unfairly neglected.
However, it is important to understand that such a one-sided ukraine phone number data strategy has a serious drawback - it does not use the multiplier effect. What is this all about? Let's give a simple example - let's say your business brings in $1,000,000 in revenue per year:
By increasing the number of customers by 90% while maintaining the same average order value and purchase frequency, you will achieve revenue growth of up to $1,900,000.
By increasing the number of customers by 45% and the average order value by the same 45% with the same order value, you will achieve an increase in revenue to $2,102,500.
By increasing each of the parameters by 30%, you will achieve income growth up to $2,197,000 (that is, up to approximately 220% of the initial level).
In all three cases, the total change in the equation elements was exactly 90%, but the results were different. This is the essence of the multiplier effect.
In this case, even distribution of efforts turns out to be more effective than concentrating attention on one point.
To take advantage of this principle, however, you need to have a clear plan for increasing all three elements of the equation. Empire Growth Group Founding Partner Drew Sanocki offers 7 strategies for increasing revenue in 2017.