1) Increase the number of sales (i.e. if you sell 100 widgets a month, sell 200 a month), or
2) Increase the price per sale (i.e. if you sell your widgets at $1 per widget, sell them instead at $2 per widget).
1) Sell to new customers, or
2) Sell more to existing customers.
We then touched upon the idea of return on investment.
One thing that we see a lot of businesses miss is an opportunity to easily sell more to existing customers. To do this, you have to know your customer well and identify their need, but if you keep your vision broad, it is often an easier method of increasing revenues than finding new customers.
Amazon is a perfect example of this. When they first went online, in 1995, they sold only books. Now, they sell virtually everything. The idea is simple – people are already coming to us to buy books, we can give them the option of buying music as well. This has the additional benefit of bringing in new customers too. They did it again with the Kindle – people are already buying physical books from us, if we give them a method to buy electronic books, maybe we will sell more (there is a tradeoff though, because for every electronic book sold, that is one less physical book).
Note the return on investment concept coming into play here – to expand into music, an investment must be made, but it is a relatively small investment to sell something that Amazon’s existing customers already buy.