Channels that influence revenue optimization
In order to optimize your revenue, you need to individually optimize each of these business functions that contribute to your revenue. Turning your attention to the following channels will help you maximize revenue from all parts of your funnel.
Pricing optimization to increase willingness to pay
Pricing optimization is what ProfitWell does best, and happens when you align your pricing to show the value you provide to a customer. Do this and your products will flourish.
Pricing optimization involves using data from customers and the market to understand how you should most effectively be pricing your product, and it makes use of a variety of data types, including customer survey data, demographic and psychographic data, and historical data. The interaction between the inherent value of your product—what it can do, and how much better it can do what it does compared with its competitors—and your customers’ willingness to pay for all of this value is a delicate matrix.
Let's take Hubstaff as an example:
Hubstaff has an exceptional features read-out—enough low-value features to buoy its big hitters, and almost everything it offers has high WTP.
The key to price optimization—and, with it, one of the keys to revenue optimization is to price all of these features in accordance with both value and WTP. Figure out how your product’s features break down along these lines; hopefully, you won’t have any low-value and low-WTP functions. Like we said, ProfitWell does a mean line in pricing optimization.
Profit optimization to maximize sales efficiency
Profit optimization involves maximizing the possibility of your sales team getting and converting the best leads, leading to higher average profit per customer.
This is where the quality of your segmentation and data collection will really be put to the test. Sales teams should work with the data you have available in order to find customers with a certain profile. The most high-quality leads are those who:
Need your product. It seems simple, but many an optimization initiative gets beached thanks to sales reps targeting prospect who are theoretically perfect...aside from the fact that they don’t need your product.
Are likely to stay long term. Your best prospect will have a need that’s likely to last over a long period and that your product can satisfy. They may have a history of long-running subscriptions to their name.
Spend more. It’s impossible to optimize revenue without going for the connoisseur, and the ideal prospect is one who knows what they want and is willing to spend as necessary to get the best.
In accordance with the general quality-over-quantity approach, the surest route to profit optimization doesn’t involve stuffing your accounts with high-volume, quick-conversion leads; it involves getting a smaller number of dedicated, high-rolling customers and keeping them. Every customer you keep saves you money on acquisition costs.
Marketing optimization for better audience targeting
Marketing optimization comes after you’ve completed your pricing-and-profit-optimization steps. Now that you know how your pricing reflects your value, and the type of lead willing to pay it, you need to reach them.
We’ve spoken about the wide array of marketing options available to you. With your marketing strategy devised, you need to optimize your output for high-spending customers who truly value what your product brings to the table:
- Create a content series that ably demonstrates your product’s high-value features.
- Pilot a video series that discusses potential applications of the features in that bundle you have on offer.
- Find out what social channels your customers use—e.g. Are they low-engagement, Twitter-and-LinkedIn regulars? Do they prefer to use specialist insight networks like HackerNews? Then, put your content in front of them.
Inventory optimization presumes you do things the old-fashioned way: keeping and selling physical products. If that’s the case, there’s still plenty you can do to optimize your processes, from manufacturing to supply chain management.