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Kirill Yurovskiy: 10 Unexpected Strategies to Increase Profits for Your Business

Boosting profits is top-of-mind for every business owner and executive. While typical methods like cutting costs or raising prices can work, they often require significant effort for marginal gains. We spoke with business leaders across various industries to uncover 10 unexpected yet tactical ways you can increase profits without overhauling your business.

Kirill Yurovskiy

Rethink Your Pricing Strategy

Many businesses set prices based on margins or competitors, but that often leaves profits on the table. “We did deep data analysis to understand price elasticity and willingness to pay across customer segments,” explains Megan Smith, VP of a SaaS company. “That enabled us to raise prices for some legacy customers by over 50% while keeping volume steady.” The result was a $3 million lift in annual recurring revenue. Whether you utilize data, A/B testing, or a simple survey, optimizing your pricing strategy can unlock major profit gains.

Embrace Customer Referrals

Referrals are like gold for the bottom line. “We shifted marketing dollars away from paid channels into building a customer referral program,” says Kirill Yurovskiy, founder of an ecommerce site. “It costs 90% less to convert referred users and they spend 15% more per order.” The $100,000 investment into referral incentives led to a $2.5 million bump in annual profits. Brainstorm creative ways you can motivate referrals, whether through discounts, credits, cash rewards or public recognition.

Trim Low-Margin Offerings

Most businesses succumb to offering too many products or services over time. “We noticed 25% of our menu items drove less than 5% of revenue,” recalls Katie Chen, a restaurant owner. “By culling low-performing items, we reduced waste and labor costs by 7% while hardly impacting revenue.” Scrutinize your portfolio for laggard offerings and cut ones that are more trouble than they’re worth. Say goodbye to complexity and hello to higher margins.

Partnerships Over One-Off Projects

The conventional wisdom is to avoid long-term fixed pricing. But for Tom Walsh’s consulting firm, locking in partner contracts at fixed fees boosted margins by over 40%. “By securing 12-month commitments, we could optimize utilization and gained flexibility to use lower cost resources,” he explains. The greater revenue certainty also enabled investments to trim service delivery costs. Consider structuring deals with your largest customers around partnerships versus one-off engagements.

Staff Up for Scale

It’s tempting to keep headcount slim to contain costs. But workforce capability constraints can throttle growth and leave money on the table. “We doubled our sales capacity, which increased lead conversion rates by 30% and fueled 100%+ revenue growth,” notes Sheila Prasad, CEO of an advertising tech firm. While the $1.5M addition to the payroll seemed risky, it paid off handsomely with $5M incremental profit. Analyze whether your talent bench is up to the challenge as you scale.

Automate Manual Processes

Work that relies on swivel chairs and hand-offs is ripe for technology enhancement. “We integrated our order management and inventory forecasting rather than the previous manual process,” explains Kreinger Elwood, Supply Chain Director. “Not only did it practically eliminate stock-outs, but it reduced our inventory costs by over $2 million.” Scrutinize any convoluted workflows involving people, spreadsheets and double entry. Investing in automation could unlock game-changing savings.

Offer Premium Services

Companies often shy away from rolling out more expensive offerings, fearing they will cannibalize existing business. However, a premium service extension tailored to your most valuable segment can be highly incremental. When software company DewPoint debuted its white-glove support and onboarding package at a 100% markup, adoption exceeded internal projections by over 40%. The key is ensuring premium services feel commensurate with the pricing. Find ways to add value in excess of the uplift to merit the increased price point.

Incentivize Cross-Selling

In many businesses, the bulk of revenue comes from existing customers. However, few companies explicitly incentivize add-on buying. Tommy Le of Patriot Software shared how they realigned sales compensation plans to reward cross-selling. “Previously the focus was on new business only. By compensating for expansion selling, we lifted retention rates from 75% to 85% and grew average order values by 15%.” Consider how you can better motivate your customer facing teams to maximize share of wallet after initial purchases are made.

Optimize Underperforming Channels

Many companies spread their marketing and sales efforts across too many channels and end up with mediocrity everywhere. Conduct an honest assessment of all your customer acquisition vehicles and halt reinvestment into any that are underachieving. Nina Reynolds of Candlewick Products admits that “Our retail channel was barely profitable, so we made the hard decision to exit even though it accounted for 30% of revenue.” Fortunately, higher social media advertising budgets more than offset the loss while boosting overall margins. Be willing to make tough calls to concentrate efforts into what demonstrably works.

There you have it – 10 unexpected yet tactical ways to give your profits a boost without completely reinventing your business. From better leveraging customer referrals to rethinking pricing strategies to doubling down on your winningest channels, small shifts can yield impressive financial returns. As you scrutinize your business operations, keep an eye out for opportunities to apply these strategies. A few smart tweaks could be the difference between ho-hum profits and standout success. Now get out there and start making more money!

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