The primary goal of any business is increasing the revenue. Regardless all the complexity of the business world, there are only 4 basic ways to maximize your revenue. You can increase the number of customers, increase the frequency of transactions per customer, raise your prices or increase the average transaction size. This article will cover three techniques to increase the average spend per customer.
Imagine you have a client who decides to buy one of your products. It is already a good start, but it is not enough if you want to drive larger profits. This is the time when upselling comes into play. Upselling is a sales technique when you induce a customer to buy an upgraded or premium version of your product. It doesn’t really matter what you sell, the technique works well for both car sellers and fast food retailers, who mastered the technique by offering “SuperSize” portions. Other upselling options include plans with premium customer support, extended warranty or products with added value (a room with a sea view in the hotel).
Tips to implement upselling
Use a powerful CRM system to know your customers, anticipate their needs and forecast the maximum amount of money they are ready to spend on the given product. According to Sales trends report 2016 from GetApp, 86% of salespeople increased revenue, and 78% improved customer satisfaction after adopting sales software. So, never underestimate the analytical data your CRM can offer. Moreover, don’t overwhelm your customers with the number of premium options and don’t offer too expensive products (not more than +25% to the original price). Otherwise, you take a risk to get your prospect off the hook.
Cross – Selling
Cross-selling is offering your customer an additional good or service related to the product they are going to buy. Cross-selling is one of the main sales strategies in the beauty industry: “'For best results, use in conjunction with ….” Amazon, one of the largest retailers in the world, attributes 35% of its revenue to cross-selling. Don’t miss a chance to learn from the best.
Tips to implement cross-selling
Think about buying as a problem solving process. What items can you add to the customer’s basket to solve their problem? Make sure, that your complementary item is cheaper (or even discounted) than the main product your customer is ready to buy. Appeal to such motives as “better result”, “saved money”, etc. Here are a couple of successful cross-selling examples: a digital camera + a memory card, a hotel room with a transfer from the airport, etc.
Bundling is a bit different from cross-selling. It is a selling technique when you group different products together and sell them at a price lower than the price of the same items if they are purchased separately. For example, you can sell gloves for $50, a scarf for $20 and a hat for $30. Another option is a set of the same matching items for $90. The practice says that this technique might increase average check by as much as 50%. Moreover, it helps you to get rid of overstock items by bundling useful products with “not so popular” options.
Tips to implement bundling
The first rule of thumb is to bundle properly. Look for the right product combos. Research your customers and predict the bundles which will attract them. Make sure that your bundles result in saving either money or time. Think about Christmas gift bundles, matching set of clothes or dish sets. These bundles not only increase the revenue of the retailers, but also improve customer satisfaction which by itself is a wonderful achievement.