How to Add Value to Your Business Part 1

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 or with you for services 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 further 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 pen or pencil 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 pound sale.

In this blog we will cover:

  • How your average pound sale impacts the bottom line of your business
  • How to calculate and monitor your average pound sale
  • How to train your staff to increase your average pound 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 pound sale is the last factor in the revenue equation that you can influence in your favour. 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.

What is the average pound sale in your business?

The easiest way to calculate your average pound 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 pound sale

For example, if my total monthly revenue was £76,000 and 1745 transactions were processed through my point of sale, my average pound 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 pound sale, you’re trying to increase your average pound sale by a reasonable increment for your business.

Once you know what your average pound 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 maximise the total value of every sale they close.

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 spend an entire workshop 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 deal with, just like we discussed in the blog on conversion rates.

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. We’ll look in detail at staff rewards programs in upcoming blogs.

This concludes part one of this blog. Next time we’ll cover the strategies to increase perceived value and increase your average pound sale.

If you want to see what other free stuff you can use to build the success and profits of YOUR business just click here

 

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