In this month’s Insight, Paul McKibbin of SPS North West looks at the third method to grow your business - increasing the
average sales value of each transaction.
Customers come to you for help and guidance. So it’s important to let them know about all the options, including additional products or services that are available to add on to the original purchase. You’ve put a lot of time and money into getting that customer in to your business in the first place, so why not leverage the return on that investment where you can? There are a number of common selling strategies you can use to increase the average sale transaction value.
1. Cross selling
Cross selling is when you sell other products or services in addition to the customer’s original choice. Ask yourself “what else could we offer with this item that would add more value to the customer?” Then develop cross selling checklists for each item that will guide team members in making suggestions to customers.
Cross selling is when you sell other products or services in addition to the customer’s original choice. Ask yourself “what else could we offer with this item that would add more value to the customer?” Then develop cross selling checklists for each item that will guide team members in making suggestions to customers.
2. Up-selling
A great way to up-sell from a lower to a higher priced item is to offer your products or services in tiers, along the line of bronze, silver and gold. Your first tier might be your budget items, your second tier is the one you actually want the majority of customers to buy, and your third tier items will appeal to those who are happy to spend a little more for more value. Train your team members to offer all options in your range. Statistics show that most people will select the second tier item.
3. Bundling
Bundling should make your products and services appear more attractive and create a higher perceived value in the mind of the customer. Take a look at your full range of products and services and see if there’s any opportunity to package things in this way.
4. Smart merchandising
Signage, ticketing, presentation and packaging, traffic flow, and point-of-sale displays are all types of merchandising that can increase your average sale if done well. Providing educational information about your products or services, testimonials or brochures, can help build customers’ confidence and increase the average sale value.
5. Work your margins and pricing
To increase your average sale value you must understand your margins and how they affect your bottom line. Avoiding discounting and price wars is important to maintain and increase your average sale value. If your present margin is 35% and you reduce your prices by 10%, then you must increase your sales volumes by 40% just to stand still! Try some what-if scenarios with your products.
To learn more about how we can help you build up the value of your firm, or to
look at some of the other services we offer, contact SPS now for a FREE discussion by calling our office in the North West on
0161 903 8291