How revenue drivers helped a home service business take control of their business to create 4x profit and freedom of time in 2 years.
Justin just had a record month for sales before we had our first discussion.
I asked him how he did it and you know what he told me?
“I have no idea.”
I pressed harder, surely he had to have some idea.
“Nope – no idea.”
We later discovered that Justin and his team sent a few promotional emails to their customers resulting in a spike of past customers buying again .
He was able to increase revenue as a result of more past customers buying again, rather than changing how many new customers they acquired.
Here’s the problem. Even though he had a great month of revenue and was excited, he had no idea what caused it (until later).
Because he had no idea what caused it, he had no idea how to continue it.
In an effort to have another great sales month he knew he needed to do something…so, he’d thought he’d raise prices.
Because he didn’t know what was actually working (retaining past customers) he just took a shot in the dark and it ended up hurting his efforts.
You know the saying, ‘even a broken clock is right twice a day’?
When you guess about your success or failures, what’s working or not working, you’re risking being that broken clock. You might get it right once, you might get it right twice, but you’re not making decisions based on fact which means it’s hard to repeat. Just like Justin found out when he chose to raise prices instead of nurturing his existing customers.
He was confused, frustrated and angry but instead of continuing to “fix this” he found help in Ascendwise.
We showed Justin why looking at the top-line revenue number was not always a great way to manage the business and why it doesn’t show you the full story.
Why? Revenue is an outcome. It’s a result of 5 key revenue drivers (or levers):
- Conversion Rate
- Customer Retention Rate
- Customer Purchase Frequency
- Average Transaction Value
Because Justin now understands what numbers drives his business, and has a strategy to improve each one, he experienced a record year in 2021 and is looking at another record year in 2022!
If you can relate to Justin’s troubles, let’s hop on a short call to see if we might be able to help.
If we can, we’ll tell you. If we can’t, we’ll tell you. There’s no pressure either way.