LightBulb Business Formula:
Increase the Dollar Value of Your Customers with Upselling, Cross-Selling, and more.
But how can we make them even more valuable and get them to spend more money on every transaction they make with you?
In this module of The Martin Print Lightbulb Business Formula, I’ll be taking a look at five very simple steps you can take to increase the dollar value of your customers, including:
This is another area of your Growth Analysis Calculator on which too many people don’t spend nearly enough attention.
Making just relatively tiny increases to the average transaction value of your customers can ultimately help to make a massive growth in your overall revenue.
But how on Earth do we do it?
The good news is that we can do this without being deeply annoying or creating doubt and suspicion in the customer’s mind.
We’re not trying to pull any tricks here or engage in any devious activity to squeeze every last cent from the poor customer’s pocket.
We’re simply trying to clearly communicate the genuine value for the customer if they spend a little more.
Are You Charging What You’re Worth?
In a moment, we’ll get onto the juicy stuff with Cross-Selling, Upselling, and Lightly-Baked-Upside-Down-Selling.
(Actually, no, scrap that last one, I don’t think the world is quite ready for it yet.)
But first, a quick word on your general pricing.
When I first mentioned to Old Bert – our mostly friendly resident caretaker – that I was writing a Blog post on increasing the dollar value of customers, he gave a derisory snort;
“Well, that should take you all of two minutes to write! Just tell everyone to put their prices up. It’s not hard, is it? I should be writing this bloody Blog. My genius is being wasted here on fixing your squeaky chair.”
Well, there are several slightly smarter ways to try and get your customers spending more without just dramatically hiking all your prices up and driving everyone away because they’d need to sell their homes before dealing with you again.
But a key starting point here is to make absolutely sure that you’re charging what you’re worth.
We can get a bit too nervous and over-cautious about this.
If business is not doing spectacularly well at the moment even though your pricing represents amazing value, you’re surely going to attract even fewer customers by raising the prices to a reasonable level?
Being cheaper than everybody else can obviously be hugely attractive.
It’s always a good plan to regularly check out your competitors and make sure that you’re not pricing yourself out of the market.
But if you’re actually providing something of higher quality than your competitors, the most important point is to clearly communicate this to your audience.
A lot of your customers will be more than happy to pay the extra cost if they fully understand why they’ll be getting something better than your rivals are offering.
And if none of your customers are paying the prices that you and your business deserve, you’ll be struggling from the start to achieve any significant growth in your revenue.
Cross-Selling, Upselling, and Combo Bundling.
Something funny and mysterious happens when you’re standing in the queue of a typical fastfood restaurant chain.
The rough price you’ve figured out in your head whilst you’re waiting somehow doubles or even trebles by the time you pass through checkout.
You’ve been very quickly persuaded to beef up your order with extras, “go large” for bigger value, or opt for the combo deal meal.
In a nutshell, this is Cross-Selling, Upselling, and Combo Bundling in their most widely-known forms, if not exactly the purest or the best.
Those corporate fastfood restaurants certainly do pretty well out of these raw techniques, even if there’s not usually enough time for their employees to do anything more compelling than ask if you want extra fries with that.
The good news for smaller and friendlier businesses is that we have the scope to pull off these techniques in a much more sophisticated and effective style.
Hmm. What if run an online business? Will this get complicated?
Quick answer: No, far from it.
Depending on the type of business you run, you may well have an opportunity to Upsell and Cross-Sell in person or over the telephone.
But even if your business is entirely online, you still have a massive opportunity here to employ the same techniques by email or as part of your online checkout process.
Maybe even a bigger opportunity to impress and persuade.
If anything, a visually dramatic screen popping up as the last quick surprise step before checkout to illustrate bigger benefits has more potential to be privately absorbed and acted upon by the consumer.
Especially the sort of consumer who is instinctively programmed to stick their fingers in their ears and shout “No thank you!” when they’re approached by real-life human beings.
Need any help in setting this up for your business website?
Open a Live Chat at our website if you’d like us to design and implement Upsell screens tailored to your customer’s purchases.
We’ll even help with the ideas too.
There’s a lot of argument and debate about the exact definitions of Cross-Selling and Upselling.
It’s no wonder people get confused about what exactly each term is supposed to mean.
Let’s leave the arguments to people with more time on their hands, though.
For the purposes of this article, I’m going to stick firmly to the common-sense definitions. You can make up your own words and terms later if you really feel the urge.
Cross-Selling is the technique of selling additional related products which are likely to improve the customer’s overall experience.
It’s the fastfood equivalent of “Do you want fries with that?”
It’s something that can easily be done in the right way in person, over the telephone, by email, or as a last step during online Checkout.
Ideally, you should be recommending:
Some kind of ‘extra’ or add-on to the original purchase
Something very closely connected to the original purchase which the customer is likely to find useful.
So, if your customer has made a decision to buy a Vegetarian Hamper from your business, it’s probably not a great idea to try and cross-sell them a packet of pork sausages.
Here at Martin Print, if a client orders a set of Letterheads or Compliment Slips from us, I’m likely to ask if they need any custom-designed Envelopes and then quickly run through some of the popular formats including Peel n Seal and Print n Make.
We’ve already established that the client is planning on posting out business stationery, so it seems a natural step to ask if they’ll need the perfect branded Envelopes to help with that process.
If a client is ordering a set of Leaflets or Brochures but they were planning on using their old, out-dated artwork from 1997, I’ll ask if they require professional new graphic design.
It’s a relatively inexpensive add-on, but one which will dramatically improve the quality and outcome of the order.
You’ve already determined the customer’s needs from their own choice of original purchase, so they’ve already done most of the work here for you.
All you need to do is push the benefits of an additional sale which will complement and enhance the overall transaction.
Upselling is a slightly different kettle of turnips..
Here, you’re trying to get the customer to upgrade to a superior and more expensive product or service for a better result or for bigger value.
So, this is the fastfood equivalent of, erm….
Well, really, it’s the fastfood equivalent of “Do you want that cooked with better ingredients?”
Hmm. Very rarely hear that in fastfood restaurant chains, though, do you?
We’re effectively making it clear that if the client is willing to spend just a little more, they’ll end up with something of much higher quality than they were originally intending to buy.
So, for example, if I had a client who was considering a set of basic unlaminated Business Cards, I would usually make a few tailored suggestions depending on what would really make their particular design go POP!
I might suggest that a set of Gloss, Matte, or even Velvet Laminated Cards would really help to bring their artwork to life and deliver a superior finish.
Again, we need to be sensible about this.
If one of your customers is considering purchasing a child’s scooter, there wouldn’t be much point in trying to upsell them a personal Helicopter.
The main idea is to try and communicate the benefits and value of moving up to the next natural step.
A third strategy is to bundle together some of your related products to create an irresistible Combo Deal.
There are a number of ways you can do this.
You can literally present the customer with an almighty ultimate package of connected goodies at a price that represents huge value for them and a massively increased order for your business which went way beyond the customer’s original intentions.
However, I feel that a smarter move is to take it a little more slowly.
Instead of throwing everything but the kitchen sink at the customer, take it one step at a time.
We offer all sorts of small but valuable Combo Deals at Martin Print, depending on the type of order we received from the client.
For example, if a client is ordering a set of Business Cards, we may ask if they’d be interested in buying a set of Custom Fridge Magnets in the same order at a special discounted price.
It’s a strategy that works well for us. In fact, it works out well for both parties.
Fridge Magnets are often seen as the magnetic alternative to Business Cards, so there’s a strong connection between the products.
The client is being given an opportunity to take advantage of a great deal which will be of genuine value to them, and we’ve just increased the dollar value of the order.
We would typically offer the deal during the online checkout process.
As a very last step before the client commits to placing the order, they might see a screen which shows off the beautiful full-colour glossy magnets in all their glory and promotes the special discounted price available if the client adds the Magnets to their current order.
The client can then make a quick and simple decision to refuse the deal or take advantage of the combo-deal opportunity.
DON’T just automatically add extra items to the customer’s online checkout process without asking them.
It should be the customer’s decision to add the items, it shouldn’t be their responsibility to delete them from the basket.
Some businesses do this, and it’s a terrible idea which comes across as trying to pull a fast one.
You’d probably kick up a stink if you were getting served in a store, and they tried to charge you for a load of extra items that they’d just randomly thrown into your basket.
The same logic applies to online checkouts.
DON’T go too overboard with the idea of desperately trying to increase the dollar value of every single sale.
It can be a very risky strategy if you go too far.
So try to avoid offering a million and one increasingly unsuitable offers to an increasingly frustrated customer.
We need to accept that some people really do just want to pay for their original order and move on without feeling too pestered.
Bigger Quantities. Bigger Value.
This obviously won’t work for every type of business…
But if you’re in a position to offer a higher quantity of units at a price that represents bigger value, make sure that this crucial point is clearly conveyed to the customer.
It’s the fastfood equivalent of ‘”Do you want to go large?”
The customer ends up with loads more stuff without spending loads more cash.
It’s something we try hard to communicate at all times at Martin Print.
Due to the nature of setting up print runs, it usually works out significantly better value to print bigger quantities of most products, and we pass these savings onto the customer.
Whilst some clients may well be content to pay $49 for a basic set of 250 Business Cards, I feel it’s important to make it clear that they can get a whopping 1000 cards for just $88.
Many customers will feel grateful that you’ve highlighted such a dramatic rise in value, and some of them will be more than happy to make a slight increase in their spend and get a much bigger heap of your goodies in return.
You don’t even necessarily have to do this in an upsell-y kind of way.
Just make the pricing options as clear as crystal from the start.
We place handy price calculators on our product pages, so that customers can quickly and easily see for themselves how much they can save without us having to hit them over the head with it.
The key is simply to make the customer completely aware of the bigger value in bigger quantities.
Minimum Purchase Sizes – A Good Idea?
Here’s a slightly controversial strategy which I don’t use myself but it could potentially be fruitful for your particular industry.
Some businesses will achieve great success in increasing the average dollar spend of each customer by simply raising the minimum quantities available to buy.
In a slightly more interesting approach, some businesses will introduce a minimum transaction value to qualify for free shipping.
So the hope is that the customer feels compelled to buy something else to top up their order and avoid ‘wasting’ money on an element of the service that could potentially be free.
It works in many cases. I speak now as a customer who has regularly topped up my orders and ended up buying loads of rubbish that I didn’t really want, just to avoid getting stung for shipping.
But I personally have reservations about the concepts.
Firstly, the ‘qualify for free shipping’ angle is not a very targeted or tailored approach to increasing your customer value.
You’re basically just saying “Buy something else – anything else! – and you might feel a bit less cheated.”
And I also have major concerns about turning away perfectly good customers who really did just want the smaller quantities that you’re refusing to provide.
So approach with caution!
And only use these techniques if you’re completely convinced that it’s the right approach for your type of business and that your customers won’t get annoyed with you.
Optimise Your Transactional Emails
If you’re a very small business, you may oversee these Transactional Emails manually, but it’s far more likely that you use some type of automated system.
The problem with most Transactional Emails is that they’re completely bloody boring.
In fairness, they do have a purpose to serve.
In most cases, they’re providing reference numbers, order codes, shipping information and all sorts of other stuff likely to send your recipients to sleep.
Nobody really expects to get excited by or find anything interesting within a Transactional Email.
It’s just the email that gets quickly skimmed through by customers to check that they haven’t accidentally ordered those leather trousers in the wrong shade of pink.
But why not take the chance here to surprise your recipients with something that might actually be of some value?
It’s usually too late to offer an Upsell or an increase in quantities, but there’s still time to quickly recommend a Cross-Sell or perhaps a Combo Deal involving the purchase of another related item at a special price if the client acts quickly.
This is another communication opportunity that gets missed by most business owners.
It should never be the focus of the email, obviously. But just a quick mention near the top of the content may be all it takes to ignite an immediate return visit to your business.
The End is Nigh…
Fortunately, I’ve saved the very best for last…
This is the big one.
Probably the most important element of the whole strategy.
We’re going to increase the final key area of your Growth Analysis Calculator and deliver the final powerful surge to your projected revenue.
We’ve got new customers to come back quickly and we’ve improved their average dollar value.
But wouldn’t it be great if they would stick around for far longer so that they keep on regularly spending more for years and years to come?
In the final part of the formula, I’ll show you How to Increase The Life Cycle of Your Customers, and you won’t want to miss it…