FutureLearn offers courses in many different subjects such as. This article is from the free online. Our purpose is to transform access to education. Register to receive updates. Visit the source of this article and learn more! What is Economics in Global Logistics? Join this course for free! Before You Go! Why Not See all FutureLearn courses. Make sure all sales reps are trained in upselling techniques and know how to approach the conversation without being pushy and turning the customer off from the purchase altogether.
Clear comparisons, perhaps in a grid or informative graphic, are helpful for educating consumers on the features and benefits of various available models. Finally, reselling is one way many companies are generating additional revenue from existing products.
By offering a resell program, customers can donate or sell back merchandise they no longer want but that is still in good condition. With some minor refurbishing and cleaning, this merchandise can often be resold, increasing your profitability and decreasing waste of unwanted items. Aka: Never underestimate the power of happy clients. Understanding your customers and delivering consistently excellent experiences is perhaps the most cost-effective way to increase loyalty and acquire new customers via referrals.
You can show appreciation for your existing customers, increase their lifetime value, deliver new leads and boost your profits. Offer personalized promotions of products a current customer has expressed interest in, plus a code to share with friends or family. Incentivize customers to talk up their favorite products on social platforms. After all, the best advertising is free advertising.
Today, experiences are paramount to consumers. Interactions with a company can trigger an immediate and lingering effect on their sense of trust and loyalty. Value, reliable service and quality products will always be important, but experience and connection are what set a company apart in highly competitive markets. How can profitability be improved in manufacturing? Often, the fastest way to higher margins here is negotiating better terms with suppliers to lower COGS.
For example, say you purchase 21, bottle tops every month, and you have three suppliers. To ensure a resilient supply chain, you place an order for 7, from each. But how, exactly, do you facilitate that? Do you try to sell a lot of items to create an abundance of revenue, or do you try and become as profitable as possible?
And what approach is the best one to take for your business? They serve different purposes in business; revenue maximization can be beneficial in the short-term, but profit maximization is a long-term strategy intended to promote lasting business success.
You can use a combination of both of these methods to reach your own specific goals, but, depending on what you want to accomplish, one strategy might be better for your business than the other. Revenue Maximization Revenue maximization is the theory that if you sell your wares at a low enough price, you will increase the revenue you bring in by selling a higher total volume of goods.
However, maximized revenue does not equate with maximized profits, as you may have to sell your goods at a loss to get them off of your shelves. If you choose this strategy, your goal is to increase volume of goods sold, not the profit you make off of selling those goods.
Revenue Maximization Pros Naturally, there are a number of advantages that come from maximizing revenue without focusing on profits, otherwise business owners would never use this strategy. The law of the reality of diminishing marginal productivity demonstrates that adding input will eventually reduce production and increase cost. When the production level reaches a point that cost of producing an additional unit of output MC exceeds the revenue from the unit of output MR , producing the additional unit of output reduces profit.
Thus, the firm will not produce that unit. Profit is maxmized at the level of output where the cost of producing an additional unit of output MC equals the revenue that would be received from that additional unit of output MR. However, acquiring new technology probably means incurring a fixed cost which shifts the TFC curve usually raising the TFC. The manager needs to decide whether the increase in TFC due to adopting technology is adequately offset by the reduction in the TVC to justify investing in the new technology.
0コメント