Increasing Revenue - A 101

The methods are many, principles few.


If you google “how to increase revenue” you get an overwhelming number of options.

Upsells, price hikes, new products, services, digital offers, high ticket, subscriptions, affiliates, … on and on and on.

How can you know what’s right for your business?

This week’s edition is on the principles of raising revenue. Once you’ve mastered the principles, you’ll be able to see methods everywhere and choose which ones you like best.

“The methods are many, the principles few. Methods often change, principles never do.”

-an unknown sage

The Simple Strategy

There are only three ways to raise revenue.

You can increase (1) the number of customers, (2) how much they spend, and (3) how often they spend. That’s it.

Customers x AOV x Frequency = Revenue


Since the beginning of business time, there have been three principles that matter for increasing revenue. They don’t change.

These three principles have stayed the same and always will. To increase revenue, you can increase:

  • Customers - The number of people who have paid money for your business’s goods or services. This is not followers, or well wishers, or leads. It’s people who have paid.

  • AOV (Average Order Value) - The average amount that the average customer spends on an average day. You will have super customers and customers you lose money on. Take the average.

  • Frequency - How often each year the same customer purchases again. For some businesses this is once. For others it’s many times.

Why it matters

An entrepreneur’s superpower is always focus. When given the option of doing more, we should choose to do fewer things better.

When you need to focus limited time and capital, you have to choose. Which methods will you use?

Well, simply put, choose a method that works on the principle you need help with.

  • If your business does not have a steady stream of customers, pick a method that attracts customers.

  • If your AOV is currently low, pick a method that raises it.

  • If your frequency isn’t what it could be, pick a method that increases frequency.

“As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.”

-Harrington Emerson

How it works.

Each principle has two sub-principles that you can use to break down the problem farther. To illustrate, I’ve asked a question for each one.

  • Customers

    • Traffic - Do a lot of people know where to find my business?

    • Conversion - Once they’re there, is it compelling for them to buy?

  • AOV

    • Upsells - Am I asking if they would like anything else?

    • Bundles - Can I bundle products or services to create a new experience?

  • Frequency

    • Subscriptions - Do my products or services lend themselves to subscription?

    • Annual sales - Am I running a few annual sales to help customers on the edge of buying to convert?

How to apply it.

An example: You run an E-commerce site. 

You have a good product, a decent AOV for your market and repeat purchases from your existing buyers. But your current traffic is only 1,000 people a month.

Where is the primary problem?

It’s getting new customers. This means “optimizing the up-sell automation” on your website isn’t going to increase revenue much. That increases AOV, not Customers, so you can say no to the cold-email you just got trying to sell you that.

This business needs more traffic. Choose methods that increase traffic.

Remember the starving crowd? Feed em.

Your next play.

Ask - 

Of the three principles, which one is the biggest struggle for my business? Customers, AOV or Frequency?

Are the methods I’m using working on that principle?

Find your highest priority principle and choose a method you like. Execute until it works, then ask the question again.

The end.

Business is difficult, but it’s simple. Focus on the principles of revenue growth so that you can use your limited time and capital well.

Remember “The methods are many, the principles are few.”

Pick the principle you need to work on and stick to it.

Revenue growth will follow.

Catch you next week!


Whenever you’re ready, I help bootstrapped entrepreneurs increase their profit in two ways.

  1. If you need help choosing which principle to focus on, the 1-hour, 1-on-1 might be right for you. These are best for businesses in the launch stage, usually under $200k in revenue. It’s amazing how much we can get done in an hour.

    Book your call here.

  2. Make your business more profitable, peaceful and resilient with Simple Strategies Coaching. A cross between coaching and consulting, it includes 2 major deliverables and 12 weeks of 1-on-1 coaching with Nate. These are best for more complicated businesses that are scaling, usually between $200k and $1.5M.

    Book a call here. 

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