MBA1986 How To Break Through a Revenue Plateau

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Hey oh. Welcome to the $100 MBA show, the business podcast. You can't afford to miss every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014. And in today's episode you will learn how to break through a revenue plateau. In business, you will hit plateaus when it comes to revenue. You're working, you're hustling, you're trying your best, but that revenue number just won't budge. This is when the old saying what got you here won't get you there really rings true. At different points in your business you are going to need to make some changes. You're going to need to make some tweaks so you can break through from a certain stage. Listen, I know this can be incredibly frustrating. I've been through this several times in my business and many of my businesses in the past. But what I've learned is getting through this plateau is actually not that complicated. It doesn't mean it doesn't require work or planning or strategy. It just means there are three factors in your business that you're going to need to review. Only three One of Those three are going to allow you to unlock and move to the next level and get out of this revenue rut. We're gonna discuss these three things and talk about how can you move forward, how can you break through, how can you start making progress again with your revenue? So let's get into it. Let's get down to business.

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I want to start today's episode by recognizing the fact that every business is different. You might be selling services, you might be selling software, you might be selling coaching. You might be selling a product to businesses, you might be selling products directly to consumers. But the fundamentals of making money of revenue in business really doesn't change. There are three factors that are in your control when it comes to making more money. Now we're talking strictly revenue here, not profit, because that has a lot to do with your expenses. That's a different story. We're just going to focus right now in terms of the money that comes into your business. So what are these three factors that control all of revenue? Factor number one is the number of customers you serve, how many customers come through your door and buy. Factor number two is how much they spend. And the third factor is the total amount they spend with you, which is also called lifetime value, which also means having customers buy from you more than once. So quick recap. How many customers, how much you charge and and how much customers actually spend in terms of repeat customers, total value inside of the lifetime of that customer. That's it. That's basically the three levers you can control. You can invest into marketing and driving traffic to your website and your sales funnels and that would increase the number of customers that buy. That would affect lever number one. You can raise your prices and affect lever number two, where when people buy, they actually give you more money and you can offer more products, more services to your existing customers, incentivize them to continue to purchase from you and that would increase your lifetime value for that customer and affect lever number three. Now sometimes pulling one lever will affect another lever. For example, if you doubled your prices, effectively pulling polling Lever number two, this may affect the number of customers that buy. Now, this is not necessarily bad because at the end of the day, your goal is to make more revenue, right? Let's say, for example, you doubled your price. Let's say you sell an online course and it was $500 and now it's 1,000. You used to have 10 customers a month when it was at 500, so you're making $5,000 a month. But when you pulled lever two and you increased the price, less people bought, but it was seven customers that bought and now you're making $7,000 a month because the price is 1,000. So even though it affected the number of customers, your total revenue is still more. So it's not necessarily bad. But know that sometimes when you pull one lever, it will affect the other. Now, depending on the stage of your business, if you've been around for less than a year, then lever 2 is probably the easiest one to that you can start experimenting with to get past your revenue plateau. Why less than a year? Because people are not really used to your price. You haven't had a huge customer base usually by this time. And raising your price after a year and being in business makes total sense because you are starting to level up and you're starting to add more value to your product or service. And you'll probably see the most significant difference in your revenue in terms of a jump and getting past that plateau with just that one move, even if that increase is only 10 or 20% increase in your prices. On the other hand, if you are an established business that has been around for a few years, and you have established customers, and you have a good customer base, lever number three is one of the easiest for you to really use and move past your revenue or your revenue mark. And that's literally offering more to your existing customers, selling them more product, selling them more services. The these people already sold on you, you've already built trust with them. It's a lot easier to sell to an existing customer. In fact, HubSpot did this intensive research on this topic and reported this statistic. Existing customers are 60 to 70% more willing to pay than a new fresh customer and they're willing to spend 60% more than a new customer, meaning that not only they're willing to buy, but they're willing to even spend more than a new customer. So this is a incredible resource, your existing customer base where you can sell to them. They are already sold on you. New products and new services, more expensive products and services. And this is what's called expansion revenue. This is what will take your business to the next level. Notice I chose to leave bringing in new customers last because most people think I just need more customers, I need more traffic. And that could be true, right? And in a lot of cases, it can be true. But more traffic and more awareness is not the same as more customers. So when you look at more customers as a metric, as a lever, the first thing I want you to look at are your conversion tools. What are you doing to convert a visitor to your website to a customer? Are you optimizing your website for sales? Do you have any kind of funnel or some sort of system where people can join your email list? And then you nurture them on your email list, you give them an email sequence, you invite them to a webinar, you warm up, up that lead so that they can convert into a customer. Most people don't have a traffic problem. They actually have a conversion problem. Because if you improve your conversion rates by just a few percentage points, it can drastically improve your bottom line. And then when you do get more traffic, it really counts because now you're converting at a high rate. But getting more customers, getting more traffic, and working on your conversions is a real lever you can pull. Now, your job as the business owner, as the leader of your business, is to choose what are you going to do? And my advice is choose one, see it through, get a result, and then move on to the next lever. Don't do several things at once. It's very hard to know what's working when you do that. So say, for example, you decide I need to raise my prices and charge more for my product. Go ahead, raise your prices by 10, 20, 30%. If you're really bold, go even higher and say, see how high you can go without affecting your total revenue goal or revenue increase. Meaning, remember that example? I said that you had a course for $500 and you moved it to $1,000. You doubled your price. Let's say you did that and you got, instead of 10 customers, seven customers. So now you're making $7,000. But then you say, hey, I'm going to bump my course even higher. I'm going to go 1500. And this again affected your number of customers. Maybe it went down to 5, but again, your revenue is now 7,500, slightly more than before. You still the limit. But let's say you raise now to 2,000, but then you get three customers. That's $6,000 total revenue. You went overboard. You went over the line. But you would never know until you go over the line and then you can kick it back to 1,500. Knowing that that's the sweet spot. It's going to take some experimentation, but just focus on one lever first. Let's say you say I need more traffic, I need more customers, I need to work on my conversion strategy. Then this is a project you're going to need to dedicate some time to, some thought, to some planning, maybe hire some experts, invest in SEO or on page optimization or Facebook marketing or referral marketing. Whatever you choose, you need to really focus in and say, hey, if I increase the number of people who come to my website and increase my conversion rate, does this really increase and get me out of this rut and increase my profits? You have to be laser focused with these efforts as you're pulling these levers.

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To wrap up today's lesson, it can be incredibly frustrating when you're doing so much, you're working so hard and you're not really seeing things move. A lot of that is just you spinning your wheels. You're not really focusing in on one of these levers. If you're not sure which one to start with to which lever to pull, just pick one. Literally try to pick one and work on how you can improve that area in your business. Even if it's as simple as raising your prices. When you raise prices, you become a little bit more premium, which means you got to really show more value on your sales pages. You might have a more premium experience to match that price. If you're going to add more products and services to sell to your customers, are you going to make it front facing on the website or is that going to be too overwhelming? Maybe you wanted to sell those products and services on a private webinar. Maybe you want to sell it on pages that are not available publicly and just email it to them. What's your strategy going to be? And guess what? Choose a strategy, test it out, get a result, try something else and see what happens there. The worst thing you can do is actually doing the same thing you're doing now. You got to try something different. Why? Because what you're doing now is getting you the same results. Just like what Albert Einstein said, the definition of insanity is doing the same thing over and over and expecting a different result or different results. So what you need to do is change it up.

Okay?

Don't keep doing the status quo. This is where it gets hard. Because as entrepreneurs, we're creatures of habit. We want to keep doing what kind of works and it's kind of paying the bills. But if you want to break out of the level you are now, you're going to have to do something different and see these as projects. Dedicate a few months to it, three months to driving more traffic and getting more customers, and see what you get up to see if it really does help. Track your numbers, your metrics, your traffic numbers, for example, their conversion rate numbers, how many leads you get, how many sales, and compare it to where you are right now. Like Peter Drucker says, what gets measured gets managed. Thanks so much for listening to the $100 mea show. If you love what you hear, hit us up with a rating and review. We would love to hear what you think of the show. Open up your favorite podcast app and leave us a rating and review. We love reading reviews and if you leave us one on Apple Podcasts, you enter our weekly random draw we call Free Ride Friday. Listen in on Friday, like tomorrow to see if you won. It's that simple. It's our way to say thanks for showing us love on Apple Podcasts. Before I go, I want to leave you with this. Like I said, one of the biggest challenges you're going to face in this whole exercise is forcing yourself to do something different. Saying, hey, what I was doing the last year was great and all, it got me here. I got to try something different. I got to focus on something else. I got to make some changes so I can get some different results. I have found that when I need to do this, it's helpful to change my routine. Whether that's waking up a little bit earlier in the morning, whether it's changing my desk or my office and rearranging my office. I know it sounds crazy, but a physical change in your life can help you get through a mental and practical change. It's like getting a new pair of sneakers before you join a new gym. Thanks again for listening and I'll check you in tomorrow's episode. I'll see you then. Take care. Of.

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