Wealth-Coaching

When it comes to growing your business increasing your average unit of sales is one of the easiest, least expensive approaches for any entrepreneur. Yet is far too often completely overlooked.

Getting larger purchases is not difficult. In fact, it’s actually a lot easier than you might think.

Although I’m going to give you 13 ways to increase your average unit of sale it is far from a complete list. So don’t make the mistake of thinking these are all of them.

I belive you’ll love the first strategy for getting customers to make larger purchases because it is so darn simple…

You may be thinking, “What kind of goofy strategy is ‘ask’?  Well, this concept is vitally sound and extremely important for growing your sales and profits quickly.

I guarantee that you are leaving tons of cash on the table if you’re not “asking” customers to buy more. Let me illustrate.

If you owned a computer store and someone came in and purchased a computer, wouldn’t it make sense to ask if he wanted to buy a printer, or software, or other computer accessories? If you ran a restaurant and a customer ordered a meal, wouldn’t it be natural to offer an appetizer or dessert? Or what if you sold furniture, when someone bought a sofa, don’t you think it would be prudent to offer them a coffee table or lamp?

You understand the point. But it’s absolutely shocking at the number of businesses that fail to ask. 

Think about how many times you’ve eaten out and the waitress simply brings you a check without asking you if you would like dessert.

Look if you don’t ask, they ain’t gonna buy!

I was totally frustrated one Saturday when I decided to replace the porch light.  I had gone down to the local hardware store and was getting great customer service. One of the salemen  helped me pick out what I needed and sent me on my way.

When I got part way through the installation I discovered I needed a separate brace that wasn’t sold with the light! Sheezzzz, why didn’t the salesman tell me when I was there the first time! Now I had to make the extra trip back to the store and it cost me an extra hour. I’ve never been back to that store.

Most businesses are failing to even ask/consult/advise the customer to take the next natural step, whatever that step may be. How about you? Are you asking for the customer to take the next step in his or her own best interest? If not, why not?

Howard had built a nice, two-million dollar company.  But when people phoned in to order his products, his in-bound operators had never asked them if they’d like to buy something else.  The suggestion they have a list of three or four specific products to offer the phone customers in descending price order was just one simple idea that has added tens of thousands of dollars in sales to Howard’s business. This suggestion, coupled with immediate implementation resulted, right from the start, in 30 to 50 percent of all callers buying the up-sell, adding an average of 20% to the average order!

As long as you are adding value, pleasure, advantage, benefit, performance or a better result to your customers lives, you have an obligation to offer them more products or services.  If you don’t ask you are not serving your customers nor your business and you deserve what you get, which is a mediocre enterprise, with little or no customer loyalty. And to make matters worse, your mediocre service will force you to have to repurchase the same customers over and over again… the most expensive way to do business.  You don’t want that, do you?

It takes simple planning and then training to program into your operation the idea that you are serving your customers by asking them to buy more.  It’s a matter of becoming aware.  If you don’t feel that way about what it is you are selling, it’s probably time to et out and do something else.

The second strategy for getting your customers to pay you more money is to…

Aaaarrggh! Oh no, have you gone into shock? Do you think you couldn’t possibly get away with charging more without losing customers. OK, let’s closely examine this concept.

Most entrepreneurs are focused on low price because they believe that’s all the customer is looking for.  This may come as a suprise to you but it’s simply not true.  Oh sure you can argue with me if you like, but hey, it’s your money you’re letting slip out the door!

Its true customers do want a good price, but they first want what they want and they want to believe they are getting value for what they purchase.

Kent Monsen found this out first hand.  A customer came into his store to look at refrigerators 20 minutes AFTER he had just purchased a refrigerator a few minutes earlier at a competitor’s store down the street.  

Well, you might think Kent’s chances of getting a sale weren’t very good. But as Kent talked with the customer, he learned the guy wanted a better refrigerator than the one he had just been sold at the competitor’s store. Here’s what happened.

The salesman’s paradigm (belief) at the other store was that every customer only wanted a cheap price.  And you can’t blame the salesman for thinking that way. Cheap price was the store’s entire marketing campaign.  So he went about selling him the cheapest refrigerator he could.  The salesman didn’t take time to find out what the guy really wanted.  So the customer bought what the salesman sold him.

By the time he left Kent, he had purchased a more expensive refrigerator and had called and cancelled the order from the other store! He took home a new refrigerator that cost $300 more than the first one he bought! The customer wanted more bells and whistles and he got what he wanted…. from someone else.

And remember, there is often a difference between what people say they want, and what they really want. For example.

If you ask a purchasing agent of a large manufacturing facility what he wants he will say, “the best price,” when in reality, on time delivery and defect-free parts are the things that really mean the most to him because he has to keep production on line. It won’t matter a bit to him if he saves a nickel on a part if it isn’t on the assembly line when it’s needed and he’s got 100 workers standing around with nothing to do, or when one of his biggest clients returns a carload of defective products.

The lesson here is, customers are looking for value first.  You also need to realize customers may not even understand on a conscious level what they really want.  You have to be sensitive to what their real needs are. Customers want what they really want, whether they know it or not. It’s up to you to provide it for them and let them know what that value is.

Understand, once the customer is standing in your store or practice, or is on the other end of the phone, he has revealed he is in the market for whatever it is you’re selling. You owe it to the customer to offer him the best product or service you have. It’s generally advisable to start with your best product or service. If your customer doesn’t want the larger unit, or upgraded service she can refuse it, but if it’s never offered to her, you are failing to serve her.  Don’t let yourself or your staff do this

kind of disservice to your customers.

One client, Earl Daly, reported he had doubled his photography business by using this principle.  He was ecstatic. 

When asked where he fit on the price scale with his other competitors, with 10 being highest price and 1 representing the lowest, he admitted he was at the 1 level. Earl said the next level of competitor was priced was at the 5 level. Earl needed to use the third strategy for increasing unit of sale…

…to about the “4” level.  He would still be the cheapest guy in town but he would instantly quadruple his profits! You should have seen the look of enlightenment come across his face!

He said it hadn’t occurred to him because he felt he was already making a good profit and his overhead was low because he worked out of his house. However, if he wanted his business to grow and to move into a studio, or buy a new digital camera, or upgrade equipment so he could provide more people a better service, the only way would be to charge more money when it made sense, and was fair to both the customer and himself. In this situation he could raise his prices and still be the lowest priced guy in his market!

Interestingly, Earl’s bookings may actually go up. The fact is, being so far below the market, many people may doubt Earl’s professionalism.  That’s one of the dangers of having too low a price.

Here’s the fourth easy way of getting customers to buy more.

Tests have shown that by giving customers three selections, each with increasing value, the number of people that selected the middle item is astounding.  

Another photographer, Ralene, discovered she could make a lot more money by giving customers three choices.  She put together low, middle and high-end packages with the middle package priced higher than her average sale.  Her original thought was that she would sell a lot of low-end packages and move more volume. To her delight, she discovered that almost no one wanted the “cheap” package.  And though she sells more middle packages than anything else, she also sells even larger packages, because she has programmed it into offering the larger one to everybody.

Are you getting any new ideas on how to get your customers to pay you more money?  Well, just in case you’re one of those hard to convince types here’s some more ideas for you.

Two of the easiest ways of getting customers to make larger purchases are

Everyone has experienced the up-sell driving through a fast food joint. After you have placed your order, the next question to come back over the speaker is, “Can I add a fruit pie dessert to your order?” or “Can we super size your drink or fries for just 10 cents more?”

McDonald’s has a new twist on their Monopoly promotion.  They used to give away the chance to win with every purchase.  This year they only give you the monopoly pieces on the larger items. Could you use this strategy for what you are doing?

If you prepare in advance to up-sell, your profits will go through the roof.  You need to be prepared to offer something of value for a good price, right at the point of purchase.

It was suggested to a window washing client that when somebody calls him to do their windows, after doing the job (and before getting the check from the customer), he should have his serviceman offer the customer an annual (four-time minimum) service contract. He can offer this as a substantial discount and get his money up front, and he’ll still be profitable because he eliminates the costs associated with “remarketing” to his customers.  

The cross-sell differs somewhat from the up-sell. It’s an additional product above and beyond the initial purchase.

Returning to the window washer example, perhaps a customer turns him down on his up-sell…  He can whip out an offer for a bottle of his commercial-grade cleaner that can be used in the kitchen and bathroom on countertops, sinks, showers and tile easily and quickly remove hard water spots.

This technique can be used in your business as well, easily and profitably.

Joe Squire has one of the top 10 accounting practices in his state.  He’s number one in the second largest county in the state.  Joe realized he can and should be cross-selling additional products to his clients, which would be in their best interest.

So now, when Joe’s tax accountants complete a client’s tax return, they walk the client through a questionnaire designed to determine what other needs the client has.  As a result, Joe is cross-selling financial planning, retirement and exit strategic consultations. He’s even recommending his clients get involved with Stevens and James Marketing to improve their marketing effectiveness.

Now, a seventh creative way of increasing the unit of sale…

Perhaps you’ve seen cologne packaged with deodorant and body talc. By packaging the three items together, the purchaser gets a better buy than if he purchased them individually.  Although more money is spent for the package, rather than just the cologne, however, this still is very attractive offer.  The merchant got a larger overall unit of sale because the three were “bundled,” and the buyer got a better buy.

One software store selling education software offered their customers the choice of buying a math program for $32, or purchasing a package with a math and reading program for $39.  The customer spends seven more dollars because they were packaged together.  You may not think seven dollars is much more money… and that’s the idea of course… but that seven bucks represents a 21.8% higher purchase.  And in the case of software, the cost of product is minimal, so the increase in profit is substantial.  And on top of that, the software store may have been getting rid of an old version of the reading software.

Some of you may need to do something dramatic to get more money out of your customers.  You may have to…

This really applies when you truly deal at the low end of the market in your industry.

One owner of a family furniture business represented the third generation.  His parents and grandparents chose to serve the low end of the furniture market so they stocked low-end furniture and dealt in used furniture.

When he took over the store he was told this was the only way to do the furniture business in this market. So like a good son he took Mom and Dad’s word for it.  After running the store for a while he became frustrated with the type of customer the used furniture attracted. His typical customer was unemployed, or on a fixed income. He recognized these folks were in a survival mode and couldn’t buy anything better, even if they wanted to. And their Marginal Net Worth was just that… marginal!

He took a big gamble, upset his parents, went against tradition, and threw out all of the used furniture.  Then he added a middle line of goods to the store.  Now he carri

es all new furniture… a line of low end inexpensive furniture for folks starting out in life, like newlyweds and college students needing to furnish their apartments with something inexpensive, yet nice, and a middle line of furniture for folks that are moving up in life; out of school, starting a new job, or moving out of the old apartment and into their first home.

Overnight it changed his customer profile. These people can and want to spend more and can turn into life-long customers.

…is the ninth great way of getting more money from your customers.

If you sell janitorial supplies and your customers repeat purchase every three months, offer them a six-month supply at an attractive price if they will buy it up front.  Could you cut them a better deal if they would commit to a whole years supply now?

One client sells health food supplements.  He has customers that reorder every 30 days.  He could offer the customer a couple of options, like giving the customer a better deal if they purchased three bottles at a time (that would be offering a quantity discount), or they could put them on a…

…where the company automatically ships their order every month and simply dings the customer’s credit card. Or they could sell them a…

…deal where they purchase the whole program up front and receive the product month-by-month.

…is a close relative of the larger-unit-of-purchase idea.  Lots of people don’t like this, but it is being used successfully and your business may be able to take advantage of this strategy.  With the negative option the customer agrees to let you send the product at regular intervals and charge him automatically unless he specifically asks you not to send a specific shipment, or until he cancels the service altogether.  Sometimes a customer continues on the service longer than he would normally, simply because he doesn’t take the time to cancel.

Book and record clubs invented this technique, but now it and the “subscription” sell are being used by companies that sell cosmetics by infomercial, multi-level marketing companies, direct mail suppliers of health supplements, and a host of others. How can you make these programs work for your business?

Have you been into a convenience store lately?  They are masters of the…

Have you noticed it’s sometimes difficult to even see the clerk behind all of the point-of-purchase, impulse-buy marketing?

All convenience stores are set up similarly. One item they all have right up front is the beef jerky.  You can buy a single piece of this western delicacy for a $1.00. That makes this stuff about $100.00 a pound! Talk about a legal license to steal! It’s hardly believable people will pay this much money for a piece of dried cow carcass, but they obviously do. The jars are half empty every time you go into one of these joints.

Now they are truly taking advantage of the impulse buy.  And grocery stores do a lot of displays at the end of each isle. Businesses pay top dollar to be in these positions because they know their sales will go up.

Any retail business can take advantage of this principle. And it isn’t simply an impulse idea. If you display a popular or new product that can add real value, benefit, or maximum service to your customers life at the point of purchase, and then couple it with asking the customer to buy, you can add some serious revenue to your business overnight!

There is even a doctor who has been successful using this technique. He puts little signs up in his waiting room, things like “Flu Shots — $19 Today.”  People who came in for other reasons buy a lot of flu shots this way. It’s a great service to the patient, who is reminded of a need, and it has added tens of thousands of dollars in revenue to this doctor’s bottom line.

These are some great ideas for getting your customer to spend more money with you. There are certainly many more. However, these ideas should be very adaptable to all business in some form.  It takes some planning and an action plan, and most of all, discipline, to get these ideas implemented.

GROWING YOUR BUSINESS ASSIGNMENT

#1:
Make a list of all the ways you can get your customers to spend more money with you. Prioritize the list and then assign each item an implementation date. Then proceed to add each of these money-making ideas your business until they are all in place.

 

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