How to Increase Revenue Without Working Overtime
How to Increase Revenue Without Working Overtime
In the service industry, we’re in the business of selling time. Booking appointments with clients in exchange for our services. It’s all tied to the clock and since there’s only 24 hours in a day, it can feel like there’s only so much money a person can make.
The bad news is we can’t clone ourselves (yet). We can’t grind out too much overtime without losing sleep or killing our personal life. And sadly, profit margins are getting worse every year with increasing costs of doing business. So is there a money-making ceiling for someone in the business of booking appointments? Thankfully, no!
If you’re a badass barber, tattoo artist, hair stylist, massage therapist or almost anyone selling their services to make a living, increasing revenue can be done in four ways. Believe it or not, there are actually ONLY four ways to increase revenue:
1. Increase number of customers
2. Increase average transaction size
3. Increase frequency of transactions
4. Raise prices
Let’s dive into each one and look for ways to spend the same amount of time (or less!) while increasing revenue. Don’t feel like reading? Check out this video walk through by our friend Chin at Spring Activator.
1) Increase Number of Customers
The first place to start is figuring out how to eliminate those empty time slots in your calendar. If your week is a bit sparse, let’s work on filling up your days to max capacity (without working overtime).
One way is by driving your customer bookings to those calendar dead zones until your week is full. Because let’s be real – empty time slots mean lost cash. This is where marketing comes into play. The goal here is to try to attract your “ideal” customer and getting their appointment locked-in.
Here are 4 ways you can start ramping up your bookings:
- Get serious about your Instagram game. Run a contest. Make sure your online booking link is front and center in your Instagram bio and remember to include it in your posts & stories. In our recent study, 37% of all appointments booked on our platform came from social media, with the lion’s share coming from Instagram.
- Start testing new marketing ideas like email. Build your list and send a monthly newsletter or special offer email to your clients.
- Provide exceptionally killer services and customer experience. Your clients will naturally start talking about how much they love you, which brings us to the next point…
- Word-of-mouth referrals. Arguably one of the most powerful ways to grow a business. Don’t be afraid to ask your current clients to send in their friends!
Already booked solid? If you’re a shop-owner, it might be time to hire.
Key takeaways: boost marketing, provide a killer service, ask for referrals, hire.
2) Increase Average Transaction Size
It’s true. Bigger is better.
Hey, it’s not what you’re thinking (get your mind outta the gutter 😜). We’re talking about transaction size. If you’re looking for a way to spend the same amount of time (or less) while making more money in the service industry – this is it.
Your goal is to get each of your customers to spend more every time they’re in your shop. Even if it’s just a little bit more, it can really add up. Here are a few ideas to get the juices flowing:
- Introduce new retail products at your front desk. Have staff promote them to every client. Offer a prize/cash bonus incentive for the shop.
- In your marketing, feature the appointments that cost more money. For example, instead of hyping flash tattoo art on your Instagram, do a multi-post story with videos of a large piece you’re working on.
- Offer package deals to incentivize clients to book multiple services at once
- Create a contest around your higher priced services, for example, create a “tag-your-friends” Instagram contest where the winner gets a free balayage hairstyle.
Key takeaways: offer retail in-store, up-sell clients, market to your ideal client.
3) Increase Frequency of Transactions
The third way to increase your revenue is to boost the dollar value spent over the lifetime of one particular client. Yep, we’re talking about re-booking.
One of the best ways to get your clients to come back and book appointments with you again and again is to focus on your customer service. Give people a top-notch service and experience while they’re in your shop. Make them feel appreciated, relaxed, have fun, and you’ll find they will be more likely to book with you over and over again.
Try to remember the little things about them: keep detailed client notes in your client database. Save their kid’s names, trips they were talking about last time they were in, the tea they like to drink. It’s the details that matter and creating a little client cheat-sheet will help you build those relationships.
After their appointment is complete, ask your clients if they would like to book their next appointment right away.
Key takeaways: focus on high quality customer service, build a relationship, ask clients to re-book right away.
4) Raise Your Prices
The fourth way to increase revenue is the one that sounds the easiest, but requires the most research. Raising prices. Whether you charge an hourly rate or a set price for each service, pricing has the biggest impact on increasing revenue.
If you’ve been in business for a few years now and you’ve never raised your prices, you should definitely consider it. You’ve likely improved your services over the years to give your clients more value. Also, each year inflation is chipping away at your profits.
Not sure if you can raise your prices? Start by taking a look at your local competitors. Check out the quality of work they do, services offered, prices, and read any online reviews you can find. Then compare everything to your own services. Evaluating your pricing is essential to make sure you’re not under-charging, which can reflect poorly on your brand. From the article, How Much Should I Charge Clients? on entrepreneur.com we learn a bit more about under-charging.
“When you provide a service, you have to find an intersection between where you feel adequately compensated and what is the highest amount your clients are comfortably willing to pay. It is important to find the price which sells both value and quality. You don’t want to price something too low and people think it’s poor quality.”
If after some research you find you’re in a position to raise your prices, it’s time to do a little announcement to your current clientele. With the coming new year, the timing is perfect. Which brings us to the topic of grandfathering. Should you or shouldn’t you?
This is a controversial one and many businesses swear that grandfathering some folks on the ole/cheaper prices is the best way to go. Our advice? Proceed with caution. If costs are going up, and your quality of work is improving, honouring your old prices could hurt your revenue and actually devalue the service you’re providing.
Key takeaway: Increasing prices will immediately increase revenue. Grandfathering can hurt your business.
How are you working to increase revenue in 2019?
Have a story to share about increasing revenue at your shop? Got any tips for the community that we missed? Please leave a comment below.