Stop Discounting Add Value And Giveaway Perceived Value

Stop Discounting Add Value And Giveaway Perceived Value

Increase the perceived value of your products and services to boost the average amount customers spend in your store.

Increasing the average amount of money customers spend in store is the last chance you have to increase the total amount of money that flows into your business. Don’t get overwhelmed, you can start small – it’s amazing how small increases can add up to big results.

Adding actual and perceived value to your products or services is the primary way you can boost how much each person spends in store. These are usually little changes or bonuses that don’t cost you very much, but make the customer feel that their money stretches farther at your business. This encourages them to spend more to get more.

Of course, the amount that you’ll be able to upsell or add-on to your customer’s purchases will depend on the business or industry you’re in. It’s much easier to get someone to buy an extra sharpie market than it is to get them to buy an extra piece of furniture or a DVD player for their TV. But generally, everyone can find a way to boost their average dollar sale.

4 Simply Ways to Add Value:

  • How your average dollar sale impacts the bottom line of your business
  • How to calculate and monitor your average dollar sale
  • How to train your staff to increase your average dollar sale
  • Other strategies for increasing your average dollar sale

Boost the amount each customer spends in your business, and you’ll see a large impact on your bottom line.

Your total revenue is the product of how many customers you have, how many times they purchase from you, and how much they spend.

# CUSTOMERS X # TRANSACTIONS X $ AVERAGE SALE = $ Revenue

So, if you have 360 customers in a month, who each purchase from you an average of 1.5 times, and spend approximately $100 each time they do, your gross revenue will be $54,000.

Like I said earlier, increasing your average dollar sale is the last factor in the revenue equation that you can influence in your favor. You want to look for opportunities to have each customer spend more than they intended when they walked in your store – even if just by a small amount. This is why the point of sale at nearly every business I can think of has a handful of low-price items to encourage impulse purchases.

In the example below, take a look at how a 10% and 30% increase in your average dollar sale can impact your overall profit. In this case, the average dollar sale started at $140, so a 10% increase is $14, and a 30% increase is $42 dollars. If the product was an MP3 player, a $14 increase could be a pack of extra batteries or a better set of headphones. A $42 increase could be a better MP3 product with more music storage.

Starting Point 10% Increase 30% Increase
Leads 4,500 Leads 4,500 Leads 4,500
Conversion Rate 30% Conversion Rate 30% Conversion Rate 30%
Customers 1350 Customers 1350 Customers 1350
Transactions 1.3 Transactions 1.3 Transactions 1.3
Average Dollar Sale $140 Average Dollar Sale $154
(10% increase)
Average Dollar Sale $182
(30% increase)
Revenue $245,700 Revenue 270,270 Revenue 319,410
Margins 24% Margins 24% Margins 24%
Profit $58,968 Profit $64,864.80 Profit $76,658.40

Set a reasonable target for yourself, and you’ll see the same increase in your bottom line. A overall 10% increase in your average dollar sale – assuming your margins are unaffected – will generate a 10% increase in profit.

What is the average dollar sale in your business?

The easiest way to calculate your average dollar sale is to divide your total revenue (before you factor in your margins) by the total number of transactions in the same time period.

$ revenue / # transactions = $ average dollar sale

For example, if my total monthly revenue was $76,000 and 1745 transactions were processed through my point of sale, my average dollar sale would be $43.55.

This is another measure that will fluctuate from business to business, industry to industry. Remember that you’re not trying to reach a “good” average dollar sale, you’re trying to increase your average dollar sale by a reasonable increment for your business.

Once you know what your average dollar sale is, set yourself a reasonable target based on the opportunities that exist in your business for boosting sales. A great way to do this is to involve your sales staff – these are the people on the front lines who know your customers and types of products or services they would benefit from.

You will also need to train and develop your sales team to maximize the total value of every sale they close.

Sales training team adding value wEquipu

Train your sales staff on the sales process from beginning to close.

Everyone can benefit from additional sales training, including so-called ‘naturals’ and your star salesperson. Make sales training a regular part of how you run your business, and you’ll have a stronger team of more focused people.

You’ll need an entire course on your sales process, but here are some tips to review with your staff in the meantime:

  • No one likes to be sold – including your customers. Find ways to make their decision to purchase seem like their idea. Educate your customers on the merits of the product or service you offer, and connect those merits to their needs. The more they believe you are working to meet their needs and solve their problem, the more responsive they will be to additional product suggestions.
  • Be clear when addressing objections, and present one or two solutions at a time. Being over-eager to blurt out the answer, or suggesting too many alternate products can be overwhelming and confusing to the customer, which will deter them from purchasing.
  • Make sure each staff member knows how to up-sell, cross-sell and down-sell to close and boost sales.
  • Follow through to the end of the sale. Work through the sales process (understand the problem, offer solutions, address objections, close) then suggest additional or complementary products and head straight to the point of sale to complete the transaction.
  • The success of your sales process and your ability to up-sell is based on trust and credibility. Work with your team on finding ways to build instant trust with each client you work with.

Provide Incentives for your team

  • Give your sales staff a reason to work for higher sales, and you’ll have a team of people supporting your business growth efforts. Would you work harder to make someone else money? Absolutely not. If you want to leverage the sales talent of your team, you have to build in a performance-based system to reward strong work.
  • Be generous with your rewards – token gestures will have the opposite effect you’re looking for. Consider rewarding both high performers, and those who have demonstrated great improvement, as this will motivate staff to keep improving. You can also reward staff on an individual and team basis.
  • Incentive programs can include bonus checks, gifts and gift certificates, recognition awards, or a combination for meeting agreed-to sales targets.

Once you’ve trained your staff, implement one or all of these strategies to add perceived value and increase your average dollar sale.

increase value

Package products or services

  • Package products to increase your customers’ perception of value. Bundles and packages are perceived as having a higher value than the sum of individual items and customers will feel they’ve received something for free.
  • Use packages to revive interest in old or new products, or to move old product out of your store. This will work for services as well, as long as the offer or package is given an end date and there is a sense of urgency. For a spa, you could package manicures and pedicures and reduce the cost by $5 for limited time. Customers coming in for a manicure only may be encouraged to book both services and take advantage of the perceived discount or increased value.
  • Package products or services so that they are intuitive, like socks and running shoes or razors and shaving cream. Make sure that the products relate to or complement each other. Packages that don’t make sense to you won’t make sense to your customers.
  • Create starter kits to ease customers into new products, and boost the dollar value of the sale at the same time. Any new activity or tool could feasibly have it’s own starter kit, like painting, camping, running, a new computer or skin care line.
  • Use your list of up-sell items to create packages. If you always encourage customers to buy leather protector with their winter boots, consider marking up the cost of the boots and including the protector for “free.”

Charge for convenience.

  • Offer to ship or deliver your products or services for a small fee, or provide free shipping or delivery on purchases over a certain dollar amount. Many customers will pay a little extra for convenience services, as long at the fee is within a reasonable range.
  • Set up service contracts or in-store warranty programs, and charge for them. This works well with electronics, appliances and other products that may require regular servicing or tech support. It is more convenient for the customer to deal with you instead of the manufacturer, so most client will be happy to pay a small amount more for the service.

Give visual reminders through merchandising.

  • Use checklists next to product signage to suggest additional complementary or required items. For example, if a customer is purchasing a printer, do they have the USB cord, paper and ink they’ll need to get it set up?
  • Always have impulse products available at the point of sale. Failing to do this usually means saying no to hundreds or thousands of dollars in revenue. Even hardware stores have displays of candy and personal maintenance – completely unrelated items – at their point of sale to boost each sale that goes through the till.
  • Post reminder or suggestion stickers on products for passive up-sells. On printer paper, suggest ink cartridges and vice versa. If items are part of a set or particular line of items, put a sticker on the product that says “I’m a part of a set!”
  • Ensure your store layout and merchandise displays are conducive to complementary purchases. Place batteries next to items that require them, and other items together if they make sense as a single purchase. If you can’t put all like items together, use strip tags to give items like batteries a second location.
  • Organize your products in order of price from basic to premium, and label them as such. Customers who come in looking for the high end or budget products will be able to quickly identify which is which, and your sales team will be able to easily explain the benefits and differences between each.

Provide financial incentives to spend more.

  • Offer a bonus gift or in-store credit for purchases over a certain value, and put that value at about 25% more than your average dollar sale. For example, all customers who spend $100 will receive a $20 gift card for their next purchase. Or, all customers who spend more than $50 will get free shipping.
  • Stop discounting, and find ways to add more and charge more without spending more. Instead of a discount, can you package two items together and charge a price just slightly lower than the cost of the two individually?
  • If your business is catalogue or order based, establish a minimum amount per order. This could be as low as $25 or $30, depending on your business, but it will reduce the number of small orders that come through and your cost to process them.
  • Provide easy access to credit and financing options, especially if you sell high-priced items. Use these credit facilities to provide “no payments for 90 days” and similar offers. This strategy usually boosts the average sale of big ticket items like appliances and electronics because customers will opt for the higher end model.

Small increases in each transaction can have a big impact on your profit at the end of the day.

As you can see, there are endless ways to boost your average dollar sale. Choose a few strategies that you think make sense for your business and your customers, and evaluate how well they work. The idea here is to make it as easy as possible to pad your revenues with a little extra cash through the till.

To Your Success,

7 Easy Steps To Strengthen Your Marketing Message Now

7 Easy Steps To Strengthen Your Marketing Message Now

Blog-a-Lesson Checkpoint:

  • You know who your target market is, what their needs are, what their purchase behaviors are and how to reach them.
  • You know how to use market research to find out more information about your market on a regular basis.

This Blog-a-Lesson is about writing targeted messages for your target market.

In a earlier post I showed you how to isolate your target market, and then how to use market research to gather information about that group of people to use in your marketing strategies.

Today we’re going to take your market research and use it to create a powerful marketing message. The strength of your marketing message lies in its ability to speak to the specific wants and desires of your target market, and tap into their emotional reactions, or hot buttons.

When you push those hot buttons, you motivate your audience to take action. The more people you can motivate to take action, the more leads you’ll have in store and on the other end of the phone line.

In this Blog-a-Lesson we will cover:

  • How a strong marketing message will supercharge your lead generation
  • Examples of strong marketing messages
  • A step-by-step process for developing your unique marketing message
  • Strategies that will strengthen your existing marketing message
  • How to test and measure the strength of your message.
  • How to be consistent with your strong marketing message

A strong marketing message will make a huge difference in your lead generation strategies.

A marketing message is simply a statement or phrase that you use to communicate information about your business to others. A strong marketing message will do four things:

  • Speak to the reader’s needs, wants or problems (hot buttons)
  • Offer a solution, advantage or benefit
  • Describe a point of difference
  • Motivate the reader to take action

As I said earlier, the key here is to motivate your target audience to do something after they read or hear the message. It needs to be strong enough to entice the audience to ask for more information, visit the website, pick up the phone or walk in the store.

You will put your marketing message on every piece of marketing material your business uses for lead generation, so it has to be powerful and consistent and speak to the group of people that you have identified as your ideal customers. Strengthening your marketing message has the potential to dramatically increase your lead generation before you even change your existing strategies.

Here are some examples of strong marketing messages that are used by successful businesses today.

how-to-create-marketing-material-1

Let’s get started with the process you can use to create a new marketing message for your business, or refine the marketing message you already have.

Work through the following questions to brainstorm and record the aspects of your business that you will communicate in your marketing message. Take your time, and be as detailed as possible.

1. Use all the information you gathered about your target market to figure out what your customer’s hot buttons are.

Write down who your customers are, and what their problems, desires and needs are.

Take some time to revisit the behavioral and psychographic information you gathered when researching your target market. This will give you an idea of what kind of emotional hot buttons you should focus on when creating your marketing message.

Hot buttons are emotional triggers that motivate your potential customers to take action. Some common hot buttons are: price, location, exclusivity, results, safety, timeliness, convenience and atmosphere.

2. Describe the value or benefit that your product or service offers your customers.

This is what your customers get when they spend money at your business – the answer to “what’s in it for me?” How do you solve their problems? How do you meet their needs, or fulfill their desires?

For example, maybe you’re a grocery store in the neighbourhood, and you offer the convenience of being just a short stroll away instead of a car ride.

When you’re thinking about this question, think about your product or service in the context of the benefits, results, or advantages customers receive, instead of the features you offer.

3. Think about the outcome of the value or solution that you provide.

Brainstorm what happens when your customers receive the value or benefit from your product or service, what happens? Are they thrilled? Relieved of worry? Do they have more time to spend with their families, or do they put dinner on the table faster?

This is kind of like the storytelling aspect of creating your marketing message. Paint a picture of how you will improve the lives of your customers, in one way or another.

4. What is your company’s point of difference? What makes you stand out from the competition?

Your point of difference – or uniqueness – is something you will want to strongly feature in your marketing message. It is the reason that the reader should choose your business instead of your competition.

For this step, do some research on your competition and see what kinds of marketing messages they are using. How strong are those messages? What benefits and results do they promise?

If you are having trouble figuring out what sets you apart from your competition, think about including an irresistible offer, or a strong guarantee to give yourself an edge. (We’ll spend some time on powerful offers and risk reversal strategies like guarantees later on in the program.)

5. What is the perception you would like others to have about your business?

How you wish your customers to perceive you will impact how you describe your offering in your marketing message, and the kind of language you will use. Revisit the vision you created, and write down some ideas about the image you want your business to project to the outside world.

For example, if your business is completely transforming its operations to become more environmentally sustainable, you will need to use different language and emphasize different features and benefits than you did before.

6. Based on the notes you wrote in response to the above questions, summarize the information into a paragraph of 4 to 5 sentences.

If you’ve got pages of notes, this may be a challenging part of the process, but that’s okay because it means you have a lot to work with. Take your time, and wade through your notes bit by bit.

You may want to start by writing 10 to 15 sentences, and then narrow those down to 4 to 5 sentences when you have a better idea of what specifically you want to focus on. Or, you could try writing three sentences for each question, and then working to synthesize from that point.

Keep in mind that the most effective marketing messages use strong, descriptive language that triggers emotional responses. Think about how you would describe your point of difference, or value-added service to a close friend, and write with that in mind.

7. Using descriptive language, synthesize your paragraph into a single sentence of 15 words or less.

This sentence will become your unique marketing message!

I know how challenging this part of the process can be, so to make it easier, I usually write a few different sentences that emphasize different things to give myself choices. For example, if you don’t know whether to feature your company’s commitment to unbelievable prices, or its guarantee of customer satisfaction, write one sentence each and compare which is stronger.

Aim to have two or three sentences that you’re happy with, and then test them out to see which is the most effective.

The only way to find out the strength of your marketing message is to test it. Don’t be afraid of making some mistakes – you need to get feedback!

Test your three draft marketing messages internally first.

Before you go out to the public with your drafts, test them on your friends, family, staff and colleagues first. Use their feedback constructively, but don’t be afraid to stand up for elements that you believe are effective or important.

Once you have gathered enough feedback, rework your draft messages and incorporate the suggestions you believe are valuable.

Incorporate feedback, and then test a few draft messages externally.

When you have refined your draft messages and incorporated staff and colleague feedback, you can start to test the messages out on your audience.

This doesn’t have to be complicated, or cost a lot of money. Simple tests using small-scale distributions will give you the information you need to choose which message is the most effective.

For example, place two or three ads in the local newspaper – one a week with a different message each time – and compare the number of leads each ad generates. Or, send out a small direct mail campaign, with the materials split into three groups – one for each message.

The message that generates the most leads is the strongest, and will be the one you choose to be your business’ unique marketing message.

Now that you’ve got a killer message, use it consistently on all of your marketing materials and in all of your campaigns.

Consistency and repetition are powerful persuasive tools to use to reinforce your message over time. Ensuring your marketing message appears on all documents related to your business will build your brand image and your company’s reputation.

Make a list of all marketing materials, stationery, signage and internal and external documentation that your customers and clients come in contact with. Then, incorporate your marketing message onto each of them.

Here’s a suggested list of materials to include:

  • Website
  • Advertisements
  • Direct Mail
  • Listings
  • Phone Messages
  • Email Signature
  • Business Cards
  • Letterhead

Now that you know what you’re going to say, and who you’re going to say it to, let’s dive into some lead generation strategies.

The next post focuses on advanced strategies for lead generation that you can start implementing into your business right away. Our focus is to set up lead generation strategies that either immediately or over time will run themselves, so you can generate more leads with less time investment.

To Your Success,

wEquipu-small-business

We help you develop breakthrough marketing strategies and put groundbreaking small business consulting ideas into action with our Silver Bullet System ultimately improving small businesses decisions and business results through proven methodologies. 

As John Maxwell Certified Coaches, we have the management and team coaching expertise to tackle team challenges head on.  We help small businesses overcome fierce competition, modest budgets and solidifying their sales and marketing engine by improving lead generation, conversion rates, transactions, higher prices and profits generation strategies. – wEquipu Team.