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This article was updated in October 2026.
Growing your business does not have to be complicated.
Marketing expert Jay Abraham popularised the idea that there are three fundamental ways to increase revenue:
- Increase the number of customers.
- Increase the average amount each customer spends.
- Increase how frequently customers return and buy again.
A business can focus on one of these areas or improve all three gradually. Even modest improvements across each area can produce a meaningful increase in revenue.
Understand What a Customer Is Worth
Before choosing where to invest your time and marketing budget, calculate what an average customer is worth to your business.
The commonly recognised term for this measurement is customer lifetime value, or CLV. It estimates the value a customer generates throughout their relationship with a business.
A simple revenue-based calculation is:
Average transaction value × average purchase frequency × average customer lifespan
This provides a starting point, but revenue and profit are not the same. For a more useful financial estimate, consider the costs involved in attracting and serving each customer, including:
- Advertising and marketing
- Production or service delivery
- Packaging and fulfilment
- Payment processing
- Customer support
- Discounts and refunds
Businesses with complex costs or financial arrangements should consult an accountant or qualified financial adviser before using CLV to make significant spending decisions.
Establish Your Starting Figures
Begin by identifying:
- Your current number of customers
- Your average transaction value
- The average number of purchases each customer makes
- Your gross profit or contribution margin
- Your customer acquisition cost
- Your customer retention rate
Be conservative and use reliable business data wherever possible.
For example, imagine that a business has 100 customers. The average transaction is £200, and each customer makes two purchases annually.
100 × £200 × 2 = £40,000 in annual revenue
This figure becomes the starting point from which the business can test the three growth methods.
1. Increase the Number of Customers
The first way to grow is to attract more customers.
Before investing in promotion, identify your ideal customer and understand the problem your product or service solves. This can help you choose suitable marketing channels and create messages that appeal to the right audience.
Customer acquisition methods may include:
- Search engine optimisation
- Email marketing
- Social media campaigns
- Paid advertising
- Networking and events
- Strategic partnerships
- Content marketing
- Referral programmes
- Local marketing
Avoid judging a campaign only by reach, impressions or website traffic. Track how many enquiries become paying customers and how much it costs to acquire each one.
This guide to developing a customer acquisition strategy provides additional ideas.
Ask these questions before increasing your acquisition budget:
- Which channels generate the best-quality customers?
- What percentage of enquiries becomes sales?
- How much does each new customer cost to acquire?
- Do customers generate enough profit to justify that cost?
- Which campaigns attract repeat customers rather than one-time buyers?
Attracting more customers can increase revenue, but only when the economics of the campaign make sense.
2. Increase the Average Transaction Value
The second approach is to encourage customers to spend more during each transaction.
This does not mean pressuring people into buying something they do not need. The aim is to offer relevant additional value.
Businesses can increase average transaction value through:
- Complementary products or services
- Product bundles
- Upgraded service packages
- Volume-based offers
- Premium options
- Extended support or maintenance
- Free delivery above a minimum order value
- Relevant cross-selling and upselling
For example, a training provider might offer supporting reference materials, follow-up coaching or an advanced workshop. A retailer could recommend a complementary product that improves the customer’s original purchase.
Make sure every additional offer is useful and clearly explained. Irrelevant recommendations can damage trust and make the sales experience feel overly aggressive.
Online businesses can also create upselling and cross-selling opportunities by presenting relevant products at suitable points in the customer journey.
Using the original example, suppose the business increases its customer base by 10% and its average transaction value by 10%:
110 customers × £220 × 2 purchases = £48,400 in annual revenue
That represents an increase of £8,400 without changing the annual purchase frequency.
3. Increase Purchase Frequency
The third way to grow is to encourage customers to return more frequently.
Repeat business depends on more than having additional products available. Customers are more likely to return when they receive consistent value, reliable service and relevant reasons to buy again.
Methods for encouraging repeat purchases include:
- Following up after a sale
- Providing useful customer support
- Sending relevant product or service reminders
- Introducing subscriptions or maintenance plans
- Creating loyalty programmes
- Developing complementary products
- Personalising offers using purchase history
- Asking customers for feedback
- Resolving complaints promptly
Do not contact customers simply because their details are available. Communications should be relevant, useful and compliant with applicable privacy and marketing rules.
Regularly measure your retention rate, repeat purchase rate and customer feedback. These figures can help you understand whether customers are returning and why some decide to leave.
These practical ideas can help you improve your customer retention rate.
Returning to the example, increasing the average annual purchase frequency from two transactions to three produces the following result:
110 customers × £220 × 3 purchases = £72,600 in annual revenue
The combined improvements increase annual revenue from £40,000 to £72,600. However, the business must also confirm that its costs, capacity and profit margins remain sustainable.
Create a Simple Growth Plan
Review the three areas and identify where your business has the greatest realistic opportunity.
| Growth area | Useful measurements |
|---|---|
| Number of customers | Leads, conversion rate and acquisition cost |
| Average transaction value | Revenue per transaction and gross margin |
| Purchase frequency | Repeat purchase rate, retention and churn |
| Overall customer value | Customer lifetime value and profitability |
Set a measurable target for one area and review the results before expanding the strategy.
For example:
- Increase qualified enquiries by 10% over three months.
- Raise the average transaction value from £200 to £220.
- Increase annual purchase frequency from two to three.
- Improve the proportion of customers who make a second purchase.
Small, measurable improvements are usually easier to manage than trying to transform every part of the business simultaneously.
Final Thoughts
The three-way framework provides a simple way to examine business growth:
- Attract more suitable customers.
- Help customers buy more value during each transaction.
- Give satisfied customers relevant reasons to return.
Your customers are among your business’s most valuable assets, but sustainable growth depends on serving them well rather than simply encouraging more transactions.
Measure revenue, costs, customer satisfaction and profitability together. This will help you determine whether growth is strengthening the business rather than only increasing sales.
You may also like: 6 Personal Branding Tips To Help Grow Your Small Business
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About the Author
Sandra Hinshelwood is a business coach and mentor. Drawing upon her experience as a virtual assistant and team leader in the corporate world, she works with small business owners and solopreneurs to eliminate feelings of overwhelm and empowering them to focus on their goals and visions with greater clarity.
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