June 24, 2019
The business world is changing on what feels like a per-second basis. This means there are more ways to make money than ever before, but it also means that growth is harder than ever to achieve.
However, making your business more profitable is about more than just growth.
It’s also about managing expenses so that you can keep margins high and profits expanding.
Fortunately, in the world of online business, there are quite a few ways for you to stay profitable and relevant in an ever-more competitive marketplace.
We’re going to walk you through some of these strategies so that you can apply them to your company and boost profits.
Part 1: Minimize Expenses
Before we look at how to boost profit through growth, let’s take a look at some of the ways you can make your online business more profitable by reducing your expenses.
There are lots of options, and which ones you choose will depend on your business. But here are some of the most effective:
When trying to reduce expenses to improve profitability, automation is going to be your best friend.
There are solutions for nearly every business function, and they can save you tons of time and money. Here are some of the more common: · Social media automation tools, such as Hootsuite, allow you to schedule posts in advance so that you don’t need to worry about logging in and posting at the right time.
They also provide you with valuable analytics information which you can use to improve the efficacy of your social media efforts over time. · Email automation is a great way to ensure you reach out to people who have purchased from you before or who have left things in your cart. All you need to do is set up the template and choose a few
parameters and the tool will do the rest. Doing something like this on your own would take forever and cost a fortune. · CRM tools, such as Hubspot or Salesforce, among others, that automatically collect information about your customers help you learn more about your audience without having to do much more work.
· Accounting and payroll are important parts of your business, but they can suck up your time and your operating budget. Luckily, there are countless automated tools, such as Quickbooks or Xero, out there which you can use to ensure this part of your business is run as efficiently as possible.
Another option besides automation is outsourcing. We live in a digital world, and that means there are countless professionals working in the online marketplace which you can use to reduce the expense of running your business.
Part of the reason this works is because you can take advantage of a global workforce.
The cost of living is less in certain parts of the world, and if you can find some quality people in these areas, you can get great value, reducing the expenses you must incur.
But even if you can’t find people willing to do the same or more for less, outsourcing can still help you save money.
For example, if you have cybersecurity needs, or if you have to run a full-time customer service operation, outsourcing is a great idea because these functions require considerable investments in infrastructure that outside firms are far more capable of absorbing.
#3: Optimize or Delete
Time is money, so examine your business functions one by one to determine if there are automation or outsourcing options, and when there aren’t, the next step is to optimize or delete.
Start by asking yourself if the functions you can’t automate or outsource are really necessary.
It’s quite likely something that made sense a few months or a year ago no longer does.
When you can’t delete, optimize.
There are a number of ways to go about doing this, but it starts by outlining all the steps required to complete each of your business’ primary functions.
Then, engage those on your team to find out if there are any best practices already being used that should be shared, or if there are any things preventing them from being more efficient.
Most people develop their own workarounds to be more efficient, and it’s important everyone in the company have access to this knowledge.
#4: Audit Subscription Services
Recurring costs are a huge drain on your cash flow.
Even if each one is only $10 or $20, this can add up over time, especially if you’re not really using the tool for which you subscribe.
Drop or downgrade services you don’t use.
Many companies offer a free or cheaper version that will save you money, or there may be an alternative that could work just as well without costing you so much money.
#5: Reevaluate Site Infrastructure
Your website is obviously the backbone of your website. As such, it makes sense to pay for good hosting service, especially since we know load speed is a big factor in search engines’ ranking algorithm.
However, just because you need it doesn’t mean you need to spend a fortune.
Check to see if competitors are offering something better, such as a promotional rate for switching, and don’t be afraid to change if you find a better deal.
Another option is to contact your current host to see if you can pay upfront for more service.
Typically, doing this will allow you to take advantage of a significantly discounted monthly rate, so while you’ll pay more upfront, you’ll save quite a bit in the long run.
Part 2: Boost Growth
To grow your business you must invest in it. The saying, “it takes money to make money” exists for a reason.
However, the trick to being profitable is investing in the right things.
This provides you with a better return and it makes the investment more worth while.
Here are some ways you can invest in your business to make it more profitable:
#1: Focus on Organic Traffic
Organic traffic, i.e. search traffic, is one of the most effective ways of generating quality leads.
As a result, if you are looking to improve profitability through growth, start focusing on how to drive more organic traffic to your site.
To do this, you will need to spend some time getting acquainted with SEO.
However, before you start diving into keyword research and doing an extensive link building campaign, spend some time optimizing your current pages. You’d be surprised at how much of a boost you can get just by doing that.
After you’ve taken the time to improve your onsite content, it’s time to start researching search terms for which you could rank, as well developing an approach to building links.
If you’re just starting out, try to go after some long-tail keywords that are less competitive and build up over time.
If nothing else, you can use this new traffic to try and attract and engage followers, which you can use send targeted marketing material that can be quite effective.
#2: Expand Horizontally
If you’ve already got a decent bit of traffic coming to the site, then a good way to boost profits is to expand horizontally.
Think about additional products those that already bought from you might want, and then work to encourage them to make these purchases.
You could do this during the checkout stage by setting up a “People who bought this also bought…” window on your site, or you could even set it up as an automated email that goes out some time after the purchase has been made.
This works great because you don’t need to spend any extra money finding new customers.
Instead, you are extracting more value from your current ones, which will help boost profits without forcing you to incur an additional expense.
#3: Personalize Promotions
Consumers are constantly bombarded with marketing materials, and this means most of the stuff you send out is at risk of being ignored.
As a result, to make your business more profitable, you need to work to get people’s attention, and it turns out addressing people directly and personalizing promotions is a great way to do this.
Examples of personalized promotions include:
· Offers based on people’s past purchase history (something a CRM platform will help you determine). Use language such as, “We hope you liked Product X, and if you did, know that Product Y is currently on sale for ____. Don’t miss out on this great opportunity!”
· Design promotions around specific dates, such as people’s birthdays
· Send messages from a real person and use the person’s name so that it feels less like you’re promoting something and more relatable.
#4 Targeted Marketing
Along similar lines, to make your business more profitable, you should be using as much targeted marketing as possible.
Since the entire world these days in online, you can access tons of information about your audience, and then you can use this to directly target those most likely to respond to your messages.
A great example of this is Facebook and Instagram. Both sites collect tons of data about users, and you can buy ad space that puts your messages in front of the right eyes.
To learn who you should be targeting, take a look at your website statistics and come up with a profile of your ideal customer. Then buy ads targeting people who match this profile.
This approach helps take some of the guesswork out of your marketing efforts, which means less money wasted, more customers, and, of course, bigger profits.
Love the Process
Making your online business more profitable is of course easier said than done.
The strategies we’ve discussed here will certainly help, but the exact combination that will make up your profit-boosting approach will depend on your business, and this means trial and error is really the best way forward.
Start making some changes here and there and measure the results as you go. Eventually, this process will help you uncover the formula that will lead to better margins and more revenue.