The fifth way to grow your business is to encourage your customers to spend more each time they buy.
There are hundreds of ways to do this. The key is to develop strategies that add value to the transaction instead of simply increasing the price. Your customer gets something valuable and you make more sales – win win!
Here are some universal ways to encourage a higher spend:
1. Upskill your team.
Teach them how to articulate the value of your products or services. The first sale is to yourself. They need to be able to readily identify the right upsells for customers and cross-sell products naturally and effectively. They also (counterintuitively!) need to recognise when they must down-sell so they don’t lose a sale. Investing in training your sales team will pay dividends.
2. Offer more pricing and payment options.
Proposals with options, easy finance and payment terms, and simple service contracts help remove barriers to doing business together.
3. Educate customers.
Live in-store promotions, video tours, and web content are all ways to highlight what’s special about your products or services.
4. Provide add-on value.
Four for the price of three, free delivery with a minimum spend, companion selling, bundled offerings with a discount, and bulk buy deals are some of the ways you can get add-on sales and give your customers that ‘I got great value’ feeling.
5. Be strategic.
Position your offering as higher quality, then increase prices or drop cheaper products.
6. Build rapport and develop relationships with customers.
Create an emotional connection with your business. Send freebies to your best customers, invite them to special events, and give them VIP specials. The top 20% of your customers may end up contributing 80% of your targeted increase in average spend.
To set a goal to increase your transaction value, you first need to know your current average transaction value. To calculate this, divide your sales value over a period (excluding tax) by the number of invoices raised during that period. Now you can set a goal for improvement. Don’t forget to monitor this to ensure you’re on track to achieve your goal!
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