It is easy to look at the FTSE 100 and cheer. The blue-chip index has already hit a new all-time high this month, breaking the 10,000 level for the first time ever.

But the flipside of a growing price is a falling dividend yield. It is now down to about 2.9%.

That can be bad news for income investors. But the good news is that there are ways investors can try and mitigate the effect of a falling FTSE 100 yield.

Invest more to earn more

One of the simplest is to put more money into the market.

By raising the size (or frequency) of a regular contribution, it can be possible to earn more dividends even as the blue-chip index yield falls.

That is not rocket science – but while the approach is simple, it can work well.

Looking beyond the FTSE 100

Another approach would be to look at shares that sit outside the FTSE 100.

The past five years have seen the FTSE 100 rise 59%. By contrast, the smaller FTSE 250 index has only risen 15% during that period – and it now yields 3.5%. That is still not an enormous yield, but it is notably higher than the FTSE 100 offers.

Still, although the FTSE 250 yields more, dividends are not the only source of shareholder return. The dramatic difference in price performance over the past five years demonstrates how important price movements can be. The FTSE 250 has badly underperformed the FTSE 100 in that regard, though past performance is not necessarily indicative of what will happen in future.

But I do think it is useful for investors to remember that there is life beyond the FTSE 100, whether in the FTSE 250, the large number of other shares listed in London but contained in neither index, or in overseas markets.

I do like to stick to what I understand when investing, though, so whether at home or abroad, I am looking for companies I feel I understand.

Focus on dividend growth potential

A third way to try and earn more dividends over time is to look for businesses that seem likely to keep increasing their dividend per share regularly.

Some even state this as an objective: it is known as having a progressive dividend policy.

One such firm is British American Tobacco (LSE: BATS).

It has been a member of the FTSE 100 since the index’s inception (albeit with a slight name change) and remains one. But while the FTSE 100 yield stands at 2.9%, British American yields close to twice as much, at 5.5%.

That reflects the dividend per share having grown annually for decades.

That incredible dividend record – which management aims to keep going, with annual growth – reflects the strong economics of tobacco.

Cigarettes are cheap to make and can command a high price, something helped by the company’s unique collection of premium brands such as Dunhill and Pall Mall.

But with fewer cigarettes being smoked, there is a risk of falling profits. The company is expanding its non-cigarette business with products like vapes.

It remains to be seen whether those can ever be as profitable as cigarettes. They also raise ethical concerns for some investors, like cigarettes.

From a long-term income perspective, though, I see this as a share for investors to consider.