New Offerings, New Revenue

Two client companies had severe seasonal fluctuations in revenue that stymied the owners’ plans for growth.

When I first talked with each of them, they told me they needed more annual revenue. They asked about better marketing and sales overall, and about increasing networking and using social media to attract more buyers.

But as we looked closely at their monthly P&Ls, it was obvious to me that they had plenty of buyers. They had many high-revenue months. What they actually needed was to generate more revenue from their current buyers during periods of the year when they weren’t typically buying. The problem was more accurately described as seasonal underutilized capacity.

The two companies are in quite different industries: a CPA firm and an auto services company. Yet upon closer look there were many similarities. It’s important to look beneath the surface at underlying components before settling on a plan for growth.

Similarities Beneath the Surface
Both of these companies have the following:

  • 20+ years in business
  • 70-80% of buyers are repeat buyers
  • Many 15-year buyers
  • Very strong loyalty to the owners
  • Seasonal fluctuations
    • The CPA’s low season is summer
    • The Auto services company’s low season is winter

They would not erase the seasonal downtimes with more marketing and sales efforts, or with more networking or social media campaigns. Those would only bring in more people during the high seasons.

We had to answer the question “What causes people to not buy their offerings during their respective  low seasons?”

  • The CPA firm: there’s no need for tax return services from May through September.
  • Auto services: the stresses of winter weather cause people to delay routine service

Responding to these causes

Having clarity about the causes of seasonal fluctuations led to the following decisions:

  • During the summer the CPA firm would offer non-tax related services to their long-time clients
  • During the winter the auto service company would reduce the impact of weather uncertainties for their long time customers.

Results two years later

Each company saw immediate revenue growth during the first traditional low season they implemented their new revenue growth tactics. The CPA’s top 20 clients were delighted to have their trusted CPA help them strengthen their overall financial position in a variety of ways. The auto service’s long time customers responded enthusiastically to outbooking and storm related specials.

This revenue growth continued in the second season. Even more significantly, the clients and customers who enjoyed the first year look forward to more of the same each year. In one season of carefully designed and effectively marketed new services, these companies’ best buyers permanently changed their perception of the value they received from companies they had already liked.

Revenue Increases in Your Company

How deeply are you looking into your company to find opportunities to increase revenue from your current buyers? Are you throwing anything and everything at the wall to see what sticks? Or are you carefully analyzing the details to uncover nuanced opportunities already within the company?

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