Being immersed in the marketing and advertising world for almost a decade now I’ve observed that the most savvy business owners do these 3 things really well.
one – Increase new customers (sales)
two – Increase the average dollar sale (the upsell)
three – Increase the frequency of purchases (lifetime value)
So number 1 is about driving more customers to your business and let’s face it sales are the lifeblood of any business. But…if you’re not focusing on the other two then you’re leaving a stack of money on the table.
Increasing the average dollar sale is about encouraging customers to spend more at each purchase. It’s not about market share, it’s about wallet share.
Examples of how you can increase your average dollar sale.
Bundle Your Products – Offer additional products at a discount. Retailers do this all the time. 1 x T-Shirt for $50 or Buy 2 x for $70 – that’s a 40% sale increase.
Package Your Products – Any service based business could do this. Even a lawn mowing business could package their products. Eg. >> (basic) Lovely Lawn Package incl: Mowing and Edging. >> (Deluxe) Best Lawn on Your Street Package incl: Mowing, Edging and Lawn Fertiliser Booster. Car companies do this really well. They have a basic, mid range and then a top of the range car.
The upsell – We all know McDonald’s are famous for this “would you like fries with that?”. I remember taking my car to a drive through car wash and the guy asking me if I wanted my alloys wheels cleaned for an extra $20, I said sure why not.
Don’t be afraid to bump up your prices by 5% or 10% customers won’t care and you’ll increase your margins.
Examples of how you can increase the frequency of purchases (repeat business)
This is all about increasing the lifetime value of a customer. Did you know it costs 10X more to acquire a new customer than to keep a customer?
Email marketing is a great way to keep in touch with existing customers, stay top of mind and encourage them to come back. With email marketing it doesn’t mean you spam their inbox with a sales pitch every time. Offer them valuable and interesting tips that will benefit their life. By all means send them special deals and instore vouchers but don’t over do it.
If you can increase each of these 3 growth areas by just 10% you will increase your overall profits by a whopping 30%, pretty cool right?
I encourage you to take a piece of paper now and set aside 30 minutes to brainstorm ways you can increase your average dollar sale and customer lifetime value.