Increase Average Sale Amount
One of dozens of strategies listed and linked to here:
How to Make More Money
From Your Business
By Steve Gillman
Perhaps the easiest way to increase profits in a business
without finding new customers, is to increase the average
sale amount. This is why they ask you at every fast-food restaurant,
"Would you like fries or something to drink with that?"
You can even sell additional product at lower profit margins.
For example, in a restaurant setting, after a couple declines
desert, the waiter could offer two for the price of one. As long
as there is still some profit on the items, larger total bills
mean bigger profits.
How you apply this principle will depend on the nature of
your particular business. In a cleaning business, for example,
you might offer to place several deodorizers in key places in
a house for $10 extra. With automobiles the extras that are added
to a sale (upgraded stereos, rustproofing, etc.) often provide
the bulk of the profit.
Of course one way to increase the average sale amount is to
raise the price. This can backfire, of course, if total sales
go down because of resistance to the new pricing. If you are
going to try increasing prices, research what your competition
is charging, and read the page on how to increase perceived
While in general you make more money when each customer spends
more, there are two things to watch for in applying this strategy.
The first is profit margins. You have to be sure that you make
a profit on the additional amount spent. It won't help you to
move your average sale from $5 to $6 if the ways you do it move
your average cost from $3 to $4. In other words, don't give away
too much just to boost revenue--look to make a profit on each
Also, there are times when it may appear that you are boosting
the total sale, yet all you are doing is giving away some of
your profits. Notice that in the example of the two-for-one deserts
at a restaurant the special is offered after the diners turn
down desert. Why? Because if they intended to order two deserts
anyhow and you gave them one for free, you just cut your profit
margin. In other words, be sure that the thins you do are really
increase the average sale amount. Designing your efforts appropriately
is a start,but tracking the results is important too. If you
don't already know the dollar amount of your average sale, find
out. Then start tracking it as you try to boost it.
If you look at the customers you have right now, and ask the
question, "How can I get them to spend more on each visit,"
you'll probably find some ways to increase the average sale.
Check out the page Sell
Complementary Products for another specific way to make more
from each sale.
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