The profit margin is one of your business’s most important performance indicators.
When the margin grows, it shows that your business is thriving. So, consider making efforts to improve the margins, such as:
- creating a trusted brand
- improving customer experience
- increasing delivery speed
- avoiding price markdowns
- improving customer loyalty
Let’s explore these in detail.
Solidify your brand
Online sales training programs say that customers are usually willing to pay more if their perception of your product’s value is high.
Perceived value is what the customer thinks about the product or service. Does your product or service have the ability to meet their needs and surpass their expectations? How does it compare with what your competitors are offering?
Consider the following methods to improve how customers view your product:
- Craft excellent copy and content that shows customers how your offering can add value and solve their pain points.
- Include happy customer testimonials and stories that show how your product or service met their needs.
Improve customer experience
According to Statista, 61% of millennials and 53% of boomers in the USA are willing to pay a higher price for a better quality service. These numbers show how important it is to create a seamless shopping experience and satisfy your customers.
It’s important for your customer service to be prompt, friendly, and helpful. For instance, respond quickly and use chatbots to ensure that customers can get answers to their questions at any time of the day. It also helps to train customer service representatives to provide top-notch service.
In addition, a user-friendly website can help improve customer experience. Some important factors to consider about your website include:
- The quality and resolution of your images. You may also consider using virtual augmented reality to make it easier for customers to visualize what they are buying.
- The speed of the site. A faster site makes for a more pleasant experience for buyers to search and get what they need. According to DotCom tools, 40% of users will bounce if your site takes longer than 3 seconds to load.
- Ease of use. Considering how fast consumers will leave a site if anything slows them down, it’s important for your website to be easy to use and straightforward. Use tools such as pre-populated sales forms to make the experience simpler.
- Payment methods. Having multiple payment methods available increases convenience for buyers.
- Mobile compatibility. According to Quoracreative, 40% of online transactions take place on mobile phones, so ensure that you cater to all customers to create a first-class shopping experience.
- Social login. To increase convenience, consider using social media login options to streamline the login process for your customers. Remember to add an extra layer of security such as multi-factor authentication to increase security.
Improve delivery speeds
According to Inc.com, customers are more willing to pay a premium if they receive satisfaction faster. So, it helps to ensure that you deliver products cheaper, quicker, and more efficiently than your competitors.
Consider the following strategies:
- Implement an IT-based efficient order management system to reduce errors and ensure you fulfill all orders.
- Improve the logistics side of your business. Alternatively, work with a reputable service provider with a large transport and warehouse network.
- Consider implementing customer pick-ups if you have a brick-and-mortar presence.
Avoid marking down prices
Markdowns increase sales volume, but they tend to chip away at your margins. Markdowns are usually a result of stock clearance, so keep an eye on your inventory control to avoid accumulating non-moving items.
Implement and train your staff in inventory management systems that allow you to remain agile and responsive to shifting consumer trends. For instance, if one product line starts showing a drop in sales, your system should quickly highlight this decline and immediately alert you to ease up on purchasing more of the item.
Instead of reducing prices, you can use tiered pricing systems or create product bundles to create a perception of a bargain without affecting your profits.
Customers often feel that they are getting a bargain when they choose the lower-priced tier. In addition, it often feels cheaper for customers to get more products for a slightly higher price than the cost of each product separately.
You will also benefit from higher efficiencies through lower marketing and distribution costs.
Increase customer loyalty
According to Web Marketing Pros, loyal customers are repeat buyers.
In addition, long-term customers are often less price sensitive allowing you to make more profit per sale.
It’s crucial to build strong relationships and brand loyalty with customers to retain their business over the long term.
Some ways to increase loyalty include:
- engaging with customers online through your social media to build relationships
- adding specialized features to your products to make them stand head and shoulders above the nearest alternatives
- asking for customer feedback and using it to improve and strengthen how you relate with your customers
Regardless of how many sales you make, if your bottom line is nothing to write home about, your business is likely to crumble. So, train yourself to use these five skills to help increase your margins and catapult the growth of your business.