Increase your business' average client lifetime value
Why this is the fastest, cheapest and most direct way to increase profits. 3 questions to answer to increase your transaction value without spending more.
Increasing the value of each transaction is one of the fastest and cheapest ways to grow your business.
This is because a 10% in average transaction value directly increases your turnover by 10%, and done correctly, increases your profit even more.
You also don't have to spend more on marketing to get this increase, because you already have the client. In fact, the moment of the transaction is the most open your customer will be to buying from you, so make the most of it.
Some ways to increase your average transaction value:
Upsell - think of ways to sell improved or deluxe versions of your products
Add-on - what other products or services can you offer that will help your customer get their desired result faster/easier?
Accessories - what other related products or services would your customer be interested in?
Best upsell is when you get the customer to come back to you at a later date - eg a free future consulation worth $100 if they spend more than $60
How much can you spend to get a new customer and still turn a profit or break-even in the short term? Improving your back-end sales allows you to spend more to get new customers, opening up your business for significant growth.
Increase your average customer value by phoning customers after they have bought something from you, and offering them a special deal on a related product, or offering them additional of the same product at a discount.
Do you understand the lifetime value of your customer? Knowing how much a customer is worth to you opens up massive marketing opportunities, as you can start paying more for each customer, because you know you can still make a profit over the long term.
Manage based on conversion rate, not ego - set expectations for your employees based on conversion rate and average sale value
Your customer base is an asset that you are probably overlooking: Are you capturing the contact details (email, phone number & address) of all people that do business with you?
Grow your business and increase your conversion rate by marketing to your current, past and prospective customer base. What special offers can you make to your current customers? What about re-activating past customers by offering them a special package deal?
Any business can increase profitability by upselling - if you don't have any related products, then partner with other companies and earn a commission on selling their products
The biggest reason your customers stop doing business with you is because they feel you don't care about them. How can you reward your loyal customers on a consistent basis?
Customer satisfaction is not enough anymore - focus on customer loyalty. How can you become a trusted advisor to your customers?
Change your mindset about your customers - don't focus on just the initial sale, but on the business relationship you are creating. Think about each customer as an asset, and nurture the relationship.
Example of upselling: car dealers can often offer the car at cost because of the number of extras they can offer at higher profit. Done right, this makes more profit, and feels like extra service to the customer.
The secret to effective upselling or cross-selling is to think about other products that your customer might want related to their initial purchase, and then offer that the the customer at the right time
Increase the lifetime value of your customers by offering them all your products, even products unrelated to their initial purchase. Ensure they know about everything you do.
Example of up-selling: You might get several free books when joining a book club, because they know their average client lifetime value makes up for the upfront cost
Example of upselling: After selling an expensive dress, a high-end clothing store could offer exclusive jewelry or shoes that match well with the dress
After or during each transaction, train your sales staff to ask: What complementary products or services do we have related to this purchase? What else might this customer want today?
Help your customers make buying from you a habit: Immediately after they buy from you the first time, get them back a second time by offering a massive discount, special offer or free consultation appointment
Reactivate your past customers by using email, phone and mail - remind them why they bought from you by sharing your Unique Selling Proposition, offer them a special deal to invite them back
Increase your revenue and profit by increasing your average customer worth by (1) increasing the value of each transaction, and (2) increasing the average number of times each customer buys from you
Do you have a system for marketing to your current and past customers on a continuous basis? If they've bought from you in the past, they are much more likely to buy from you again.
Each time you make a sale, start thinking about how you can get that customer to buy from you again. How can you turn an one-time sale into a lifelong relationship?
Find out who your top customers are...then create customized product catalogues just for them. Think about the products or services that they need, then send them your personalized recommendations.
Regularly analyze your receipts and invoices to figure out who your best customers are. Then think about how you can sell more to them: What else do they need? What else are you offering that they might not be aware of?
Critical business growth metric: What is your average transaction value? How much money do you make each time a prospect converts into a customer, or an existing customer buys again?
Manage by metrics: When your employees help you increase conversion rate or average transaction value, reward them by paying part of the profits as a bonus
Persistent follow-up with prospects not only increases conversion rate, but it also creates more loyal customers who will buy from you more often, increasing the lifetime value of each customer
Increase employee productivity and reduce tension by managing by conversion rate and average transaction value - set clear expectations and reward employees when they meet conversion targets or increase the average transaction value
Increase your business' average customer value by training your sales people, and authorizing them to package complementary products into special deals at the point of sale.
Increase your average transaction value to massively increase profits: Do you have any complementary products that you can package together? Are you offering all purchasers discounts if they buy more products at once?
Bad sales performance is a good thing...because it means your business has lots of room to grow, by simply training your sales staff better. Increase your conversion rate to increase your profitability dramatically.
Allow sales people to put together packaged prices at the time of sale, for example selling 3 for the price of 2
Increase your average transaction value by contacting your customers a short while after their order, and surveying them about other related products and services they might be interested in
Increasing your average transaction value can easily double or triple your profitability, because you are making more without spending more
Before sending out an order, contact your client and offer a complementary product at a discounted price
Always upsell - if done right it feels like better service, and it has a massive effect on your profitability (even if your conversion rate is low)
Increase your average transaction value by always educating your customers on all the services you offer that might be relevant to them, not just what they are buying now
Empower your sales people to sell more per transaction, to increase your income without increasing costs
Increasing your average transaction value is a high leverage growth activity, as it increases income without increasing costs
Are you including a bounce-back offer/sales pitch with every outgoing order?