Tips to boost average dollar sales

Walk into any fast-food restaurant and order a hamburger and you’ll invariably be asked, “Do you want fries with that?”

Walk into any fast-food restaurant and order a hamburger and you’ll invariably be asked, “Do you want fries with that?”

Many now ask, “Would you like to super-size the order for just 60 cents more.”

Just think of the millions of extra dollars generated each day by asking two simple questions.

This same strategy is important for any business. The issue isn’t market share but wallet share. Boost the dollar value of your average sale and you boost your cash flow.

The following information offers simples ways to increase average dollar sales.

Crunch the numbers

Calculate the dollar value of your current average sale. On a typical day, if you have 20 customers and total sales of $2,000, your average sale is $100.

Depending on the type of business, you can also calculate the average sales per day of the week, by employee, location or marketing campaign.

Test and measure

The results will often lead to a plan of action. For example, if your numbers are lower on Mondays, plan special Monday promotions. If one ad campaign brings in a $2 sale and another a $12 sale, then adjust accordingly.

Set new targets and plot your strategies to meet them.

Use add-on or up sell techniques

“Do you want fries with that?” is a textbook example, but the same approach works for any business.

A legal office can ask every client if they have an up-to-date will. Bets are two out of three don’t. The result can translate into thousands in average weekly billings.

Do you use a checklist of related products when servicing customers? If you operate a paint store, customers probably also need brushes, rollers and drop cloths. A hair salon always asks whether customers need hair products.

Special offers at the checkout counter can trigger impulse sales.

Highlight hidden products or services

A fellow coach worked with an insurance broker who averaged 1.27 policies per customer despite offering more than 14 types of insurance. A survey revealed that most clients didn’t know the company sold other products.

Implement ways to “educate” your customers. In-store demos, signage or newsletters and email offers work well.

Change your product or service mix

Adding or subtracting to your product line can actually see your revenues grow. If the average daily sale in a bakery is $5, by adding specialty cakes and other premium goods the figure can jump.

The same effect can sometimes be achieved by dropping lower-priced products. You must first know what makes/models sell best. Drop the $35 model and the customer will spend $45 or $55 instead.

Bundle your offerings

Encourage customers to spend more by giving them a package deal on multiple products or services. Again, fast-food restaurants really know their systems — an “extra value meal” includes the entree, side orders and a drink. A vehicle repair shop might offer a tune-up and lube job in one visit.

You can also bundle your time. One computer repair company wasn’t achieving enough revenue charging hourly rates, so they now sell services in 10-, 20- or 30-hour contracts. This new option yields higher average sales and ensures return business.

Train your staff

Create weekly or monthly sales challenges. Focus your sales team over a specific time period or promotional campaign and track results. Small charts comparing last year’s to the current sales receipts eliminate competition between staff, but drive sales overall.

Make staff aware of your sales value targets and how they can help increase results. Let your staff know what you’re looking for and then give them the tools to achieve it.

Raise your prices

If you’re just opening your doors, price your products or services on the high side and figure out how to offer more value. Being the least expensive isn’t necessarily going to pay the bills, and will put you in a tough situation if competitors beat your price. (Remember, stay out of price wars by fully developing your unique selling proposition.)

If your business is established, don’t be afraid to increase your prices by five or 10 per cent. Most steady customers won’t care. (You don’t stop going to your favorite coffee shop or your hair salon when they raise their rates.) You’ll increase your margins, which will make up the difference if some do leave.

These simple strategies can maximize every transaction and keep the cash flowing and generate peak profits.

ActionCoach is published on the second and fourth Tuesday of every month in the Business section of the Advocate. It is written by John MacKenzie, whose Red Deer business ActionCoach helps small- to medium-sized organizations in areas like succession planning, systems development, sales and marketing, and building/retaining quality teams. MacKenzie can be contacted by email at johnmackenzie@actioncoach.com or by phone at 403-340-0880.

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