Today I want to share how you can increase the average transaction amount of every current customer that you have as we look at the different ways to increase the profits of your business.
If you can get 10% more out of every customer, how would that affect your business? If you’d had 10% more income from every current customer that you’ve got? We’re not talking about getting new customers. But look at how many customers do you currently have and could you get 10% more out of every transaction that you have with them?
Sometimes that makes a huge difference.
In fact, just adding one up-sell or cross-sell or higher value item can generate 10’s of thousands of dollars or more into your business without adding that much more work for you.
So it’s a great way to grow the revenue and profits of your business.
We’re going to talk about this in several different posts. And in this first one, I want to talk about creating a value ladder. If you study a lot of effective marketing and business growth strategies, you’ve probably already heard of this. A value ladder is offering higher value and lower value items from your initial service offering.
To give you an illustration of how to do this, I was working with a computer repair store, and their initial price for service work was $95 to work on a computer. We thought about how to offer more value to the customers, benefit them more, but also increase the average transaction amount that we were getting.
As we thought through and examined the service process, we came up with an advanced care package to offer the customers. When a customer would check their computer in, it was $95 to do initial work on their computer, but the advanced care package we offered, a “ten-point tune-up”, was only $9.95 to add on.
So for $10 more, we would not only service their computer and fix what needed to be fixed, but we would also open it up and clean it all out, clean out the fans, make sure everything was up to date, make sure there weren’t any viruses or malware on the computer and tune up the system. There was a list of ten things that were an added value to the customer. We added that as an add on value package.
Next, we had a supreme value package where we would also offer monitoring to that computer for the year. It would warn them if there was any viruses/malware or if the hard drive was getting full, we had this software suite that allowed us to do that, and we would install it as part of a supreme package. I think it was $150, so we offered various values to each customer.
Most customers took that first add-on package because they were already paying $95 to have their computer worked on, so what’s $10 more to have it all cleaned up and checked out? That alone generated about $1,500 to $2,000 a month of extra revenue for that computer business.
Maybe you’re a hair salon, and you’ve already seen how Great Clips does it. I take my son to great clips, and his initial haircut is about $14. But for $18, they’ll do the cut and shampoo and wash his hair, which is great because it gets all the hair clippings off (at least most of it off). So they offer that as a greater value.
If you were a massage studio, maybe you could offer certain oils or salts or incense, or perhaps a deep tissue massage as an add on bonus value to an initial massage?
There are so many different ways that you can do this, and with just a little bit of thought, you can figure out what the higher value items are that you could offer your current customers.
So that is a simple way you can increase value.
In the next few posts, we’re going to talk about completing a value web with all the different up-sells, cross-sells down-sells all the different ways that you can increase the transaction amount for every customer that you have. I hope this has been helpful.
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