There are only 3 ways to grow your business
- 1. Increase your customer base
- 2. Increase the value of each transaction
- 3. Increase the frequency with which your customers buy from you
Most businesses think that doubling your turnover means having to double your customer numbers, but if you take each one of the 3 ways above, and start to apply some numbers; you get very interesting results.
What these results mean is that you can concentrate on smaller targets in each of the areas above, or even use a phased approach, improving one area after the other, to increase your turnover much more than you thought easily possible.
Let’s take a hypothetical business. So you have a business, and in that business, let’s say you have 500 customers, and each of those customers spends an average of £10 per transaction and they buy from you at a frequency of let’s say 10 times a year, or week, or 2 years. The time frame really doesn’t matter.
500 x £10 x 10 = £50,000.
Let’s see what happens if we increase our customer base by just 10%, the value of each transaction by just 10% and the frequency by which those people buy, by just 10%.
550 x £11 x 11 = £66,550
That’s an increase of 33.1% and all you have done is make small improvements in the three main areas of growing your business
Here is one EASY way to ‘Increase the frequency with which your customers buy from you’, and one EASY way to ‘Increase the value of each transaction’
1. Call your 10 best customers
Pick up the phone and call 10, or 20 or more of your best customers (or prospects if you haven’t got that many customers yet); and simply ask them WHAT THEY NEED. Just chat, don’t sell, just ask questions. You will probably make some more immediate sales, but from the answers you get, you may get some great clues as to how to expand your product and services base. Then when you’ve found out how to source the product or service; you have a willing qualified lead ready to make a purchase. Many businesses will have a customer base in which maybe only 20% of that customer base provides 80% of the income. Don’t neglect these customers. Go out and meet them, and do the same, just ask questions, find out what they want. Most businesses will neglect these customers or not give them the attention they deserve, but it doesn’t cost anything except TIME to move your focus to maintaining and building these relationships. It may not seem like marketing, but marketing is not ALL about getting new customers; it’s about keeping the relationship with your existing customers so that they return to you to buy every time.
This means selling something else to customers at the moment that they buy from you. You’ve probably experienced this if you’ve ever been asked to ‘go large’ at a fast food outlet, or in the convenience store where items are labeled ‘Three for the price of two’. Those are both examples of upsell. The reason why a business or a retailer will try to ‘increase the value of your transaction’ by ‘upselling’, is that they realize that it may have cost them quite a lot to get you to the point of buying, and at that point of purchase, it will cost them NOTHING to try to sell you something else. This is known as a ‘pure profit sale’; because the costs are borne by the first sale, the upsell is ‘pure profit’. If just 20% of your customers allow you to upsell, that’s an additional pot of cash that you have brought into the business for absolutely NO MARKETING COST.
So what in your business, at the point of selling; could you also offer as additional real value to that customer? If the answer is nothing, you might want to create something that would add value to a sale, or team up with someone who does have something, and then take a percentage by prior agreement. You could create levels of products whereby someone who wants a service or product is upsold the ‘gold’ version which has more value.
Here are some examples of upsell in various markets
· suggesting a premium brand of alcohol when a brand is not specified by a customer (such as if a customer simply requests a "rum and coke").
· selling an extended service contract for an appliance
· suggesting a customer purchase more RAM or a larger hard drive when servicing his or her computer
· selling luxury finishing on a vehicle
· suggesting a brand of watch that the customer hasn't previously heard of as an alternative to the one being considered.
· suggesting a customer purchase a more extensive car wash package.
· Asking the customer to supersize a meal at a fast food restaurant.
5 Easy Ways to Upsell Your Products and Services
1) If you sell products, put an ad or coupon for a related product or an upgrade in the box.
2) Send new clients a thank you card with a promotion for one of your other services.
3) Put a sign up in your shop or office announcing a new offering or special deal. Just make sure it doesn’t get lost in the clutter, and train your staff to point it out.
4) Send targeted follow-up emails to customers offering them a related product or service (you can do this automatically with a good email autoresponder , we’ll cover this another time)).
5) On your Website, offer an added discount for buying two products or services together. Amazon does a great job of this by always offering a second book on the same subject below your main selection.
Remember, upselling is really just a matter of offering something else your customer is likely to want, based on what they’re buying now. Simple as that.
You’re doing your clients and customers a HUGE disservice if you don’t tell them you have something else they may want or need. And you’re leaving money on the table in your own business.
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