In other words, increase the average transactional value of their purchases. Or more simply, get them to spend more money when they buy something from you.
Now, this just happens to be the quickest and the easiest way there is to increase your profits.
One of the things that continually amazes me, is the number of businesses that have extensive and expensive plans in place to acquire more customers. Yet, very few have paid much attention to this highly profitable and highly leverageable step of increasing the size of the order… getting more money from each of your customers every time they buy from you.
If you think about how easy this is and how profitable it can be, you’ll see why it’s such a powerful concept. And, you’ll also see why nearly every fast-food restaurant has embraced… has mastered… and requires that every person who takes orders, understands, and is proficient in the use of the “up-sell” and “cross-selling.”
Think back about your own experience. You drive through and place your order… a sandwich and a drink. And then what happens? A voice comes back over the speaker and asks if you’d like an apple pie, or fries with your order.
That’s an example of cross-selling. Selling an additional product in addition to, or beyond the initial purchase.
Or, they might suggest that you “super-size” or “giant-size” your order. That’s an example of an up-sell… increasing the size of the initial order.
In any case, if you take them up on their suggestion, what they’ve done is just increase their profits substantially, since they made an additional sale, but had no acquisition or marketing costs.
You see, they realize that a certain percentage of their customers will say “yes.” And the only reason they say “yes” is because a suggestion was made to them. So they play the numbers game.
And the result? Well, by being aware of what their customers might want… but not ask for on their own… and then by asking questions or making suggestions, they bring in a substantial number of dollars. And other than the actual cost of the product those dollars are pure profit.
Make It More Advantageous For Your Customers And Prospects To Give You Their Money Than It Is To Keep It For Themselves
Now, here’s another technique they frequently use. It’s called “bundling,” or “packaging.”
It’s where they combine a sandwich, a drink and fries, then throw in a couple of “bonus” items, like maybe a cookie and a toy. They put it all together in one package, and give it a name like, “Happy Meal.”
They’ll charge you less for that package than what each of those items purchased separately would have cost, but the total dollar amount you spend will be higher.
And, since there were no marketing costs involved other than the cost of the items, themselves… it’s pure profit and it goes straight to their bottom line.
Now, what does that have to do with you, and your business?
Well, you may not be in the fast food business, but the principles can still apply.
Just ask yourself this question: “What additional products or services do you have that would be natural complements to what your customers initially buy from you?”
Can you maybe suggest that your customers upgrade to a better model, a larger quantity, maybe a more comprehensive or perhaps a more frequent application?
Can you find ways to bundle or package certain items that would give your customers more value, more use, more enjoyment, and at the same time increase the unit of sale?
Do these things seem like common sense to you?
Well, they probably do. But as I mentioned before it’s surprising how few businesses use these three simple principles.