Nowadays it seems that starting a small business is easier than ever. From basic homegrown dropshipping offices to unique startups that add actual value, we are seeing those small business numbers skyrocket.
And when there are too many fish in the tank, it’s hard to stay afloat, let alone grow your business.
This is the right moment to start focusing on incremental sales – an often overlooked yet powerful lever for parenting success.
But what exactly are incremental sales, and how can small businesses capitalize on them? Let’s dive deep into this concept, unravel it, and explore strategies that can unlock new revenue streams.
What are Incremental Sales?
At its core, incremental sales refer to the additional revenue generated by specific actions, marketing campaigns, or promotions that wouldn’t have occurred otherwise.
In other words, these are sales that happen on top of your baseline revenue, thanks to efforts that encourage a customer to make purchases they otherwise wouldn’t have made.
Think of your business’s regular, ongoing sales as a river. Incremental sales are like tributaries – streams of revenue that flow into the river, making it grow.
Unlike baseline sales, which come from your core, repeat customers, and normal day-to-day operations, incremental sales often arise from targeted efforts designed to attract new customers or persuade existing ones to buy more.
Why Do They Matter to Small Businesses?
In the vast sea of marketing jargon, it’s easy to miss why incremental sales are vital for small businesses. But consider this: from small to big – businesses often pour money into marketing and sales initiatives, assuming that every additional dollar earned is pure profit.
However, if those dollars are merely shifting sales from one product line to another, or are only attracting customers who would have purchased anyway, then you’re not growing – you’re just shifting the pieces around.
Incremental sales ensure that your marketing funds are spent on expanding your market, not just maintaining it. This distinction is essential for small businesses with limited budgets, where every dollar must be accounted for.
Strategies to Drive Incremental Sales
Before proceeding to some down-to-earth strategies, we should take into account that these are very industry-connected. Ones that work for a small coffee shop won’t work if you’re a SaaS startup.
Other strategic approaches are more universal and comprehensive. We’ll overlay a couple of those.
1. Personalized Marketing Campaigns
Generally speaking, a customer prefers a personalized approach when dealing with a salesman. This feature of human nature has been exploited by businesses since forever. Today, more than ever, consumers expect brands to understand them on this individual level.
Personalized marketing allows you to tailor your promotions and communication to each customer’s unique needs, increasing the likelihood of generating incremental sales.
Either by applying complex personal CRM systems, or simple purchase history insights – you can create campaigns that feel relevant and timely to your customers.
For example, sending a “we miss you” email to customers who haven’t shopped in 60 days with a special offer just for them can entice these individuals to make an additional purchase they hadn’t planned on.
Another often-used strategy is creating loyalty programs that reward frequent customers, thereby encouraging them to buy more often.
2. Seasonal Promotions and Limited-Time Offers
Urgency and scarcity are powerful psychological drivers. Limited-time offers or seasonal promotions create a sense of urgency that prompts customers to take immediate action.
The key to success with this strategy lies in the balance: the offer should be appealing enough to nudge your customers but not so frequent that it loses its impact.
For example, offering a discount on seasonal products like holiday-themed items or services during a particular time of year can drive sales that wouldn’t have happened otherwise.
3. Upselling and Cross-Selling
The art of upselling and cross-selling is about maximizing the value of each transaction. Upselling pushes consumers to buy a more expensive version of a product, whereas cross-selling makes suggestions for related goods. Both techniques can lead to additional sales without the need for new customers.
Let’s say you own a small electronics store. When a customer buys a smartphone, suggesting they add a screen protector and a case (cross-sell) or upgrade to a higher-end model with more features (upsell) can increase the transaction value and drive incremental revenue.
4. Targeting New Markets
Expanding your customer base to untapped or underserved markets is a sure way to generate incremental sales. For a small business, this could mean expanding regionally, offering products to a new demographic, or even selling online for the first time.
For example, a brick-and-mortar bookstore might find a new audience by launching an online store. By offering exclusive online promotions or curating a collection of rare or niche books that cater to specific interest groups, the business taps into new customer segments, generating incremental sales.
Final Thoughts
Incremental sales may seem modest when viewed in isolation, but they are like pieces of a puzzle. Over time, each piece adds to the bigger picture of sustained growth.
For small businesses, consistently focusing on incremental sales can be the key to building momentum in a competitive market.
Although, the sky is not the limit and the number of strategies you can apply when trying to increment your sales is not unlimited – it does offer an amazingly vast blank sheet of paper for your creativity to flourish.
These specific strategies with examples should nudge you in the right direction.