8. Leverage The Average Dollar Amount Of Every Sale You Make
Another tremendous way to generate more profit is to increase the average dollar amount that your customers spend whenever they do business with you. You’d be surprised how easy it is to increase your profits by 15% to 40% just by making a minor change or two to the way you do business.
Here’s how it’s done. First, it’s important to remember that the easiest person to sell more of your products to is an existing customer. But to extend this concept one step further, you can really make some serious money when you realize that the easiest and most convenient time to sell more to your current customers is right at the time that they’re buying from you.
Look, you already have the person in your store or ordering from you if you’re selling by mail or phone. They’ll never be more willing to dig a little deeper into their wallets than at this point of sale. All you need to do to capitalize on the situation is offer your customer a strong incentive to buy more right now.
Getting your customers to spend a little more at the point of sale is a snap. The way you do this is by using a technique called the up-sell. Here’s how the up-sell works. Essentially, you offer your customers the opportunity to buy even more of what you sell at an attractive discount once they’ve made the commitment to buy something else at the regular price.
If you own a retail store, you set up a special selection of items close by your cash register. Whenever your staff rings up a sale, they tell the customer that because they’ve purchased X dollars worth of goods, they’re entitled to certain items in the special section at a discount of 15% (or whatever figure you choose).
Now the items you feature in your special section should be very popular, quick moving items. They should also be items that have a fairly high profit margin so you can give a liberal discount and still make a decent profit.
Successful up-selling is a function of numbers. You’ll find that 15% to 40% of your customers will take advantage of your special offer. But in order to reach these levels of additional sales, your sales people must present the up-sell opportunity to every customer at the point of sale.
Using the up-sell in direct mail or telephone selling is done in a similar way, but it’s usually limited to just one up-sell item. Offering people too many choices by mail or phone can backfire and actually dilute your sales. Also, when up-selling by mail or phone, the up-sell item should be related to the original item.
For example, if you sell cookware by mail, a good up-sell item would be a cookbook. Another would be a set of kitchen utensils. Again, the up-sell item is offered at an attractive discount, but only when the customer buys the original item you’re offering.
Up-sells are simple, they require almost no additional effort or expense, and they work like wildfire!
9. Leverage Your Profits By Participating In Joint Ventures
Joint ventures are an exceptional way of adding sizable profits to your bottom line. You can use joint ventures to sell your products to the customers of other businesses. By doing this you’ll not only profit immediately, you’ll also add new customers to your list. This is called a Host Endorsed Joint Venture.
Or you can use joint ventures to sell other companies’ products to your own customers and virtually add or test additional product lines without risking a cent of your own money. This type of deal is called a Guest Endorsed Joint Venture.
For a Host Endorsed Joint Venture, you need to connect with another business that sells products that appeal to the same type of customers who buy from you. This host company will be sending a letter endorsing your product to their customers. You’ll create the mailing and pay all the costs of sending out this offer. In fact, your host incurs no expense whatsoever. In exchange, the host receives 15% to 30% of the net profit. It’s up to you and the host to determine what’s fair to both of you.
By endorsing your offer and playing off of his credibility, the host can easily generate response rates of 10% to 40%. The money you make can be tremendous, plus you get to add these new customers to your list for many more years of repeat sales.
All orders are received by the host and forwarded to you for fulfillment. There are two reasons for this. First, it’s essential to make the offer appear as if it’s being made by the host. It’s the host’s credibility that carries the weight here. Second, this allows the host to accurately track the number of orders generated.
Considering what you’re getting, trading a percentage of profits to play off all of the time, effort, and money it took to build the host’s customer list is an exceptional deal. You can use deals like this to build a substantial list of your own in a fraction of the time it would normally take.
A Guest Endorsed Joint Venture is similar, but here you act as the host to endorse your guest’s product to your own house list. The guest should pay all expenses and reap the lion’s share of the profits.
In a Guest Endorsed Joint Venture, you’re gaining ancillary profits with very little effort and no cost on your part. It’s purely found money. At the same time, it gives you a risk-free way to test other products you might want to consider adding to your business.
Congratulations! You’re now on the road to becoming a direct marketing leverage expert. You’re now ready to start compounding the results of every marketing dollar you invest.
I’m sure you’re pleasantly surprised by the broad selection of marketing areas you can leverage significantly. Ads, headlines, prices, publicity, mailing lists, advertising media, new customer sales, average purchase amount, repeat sales, up-sells, lead generation and conversion, referrals, offers, copy and more! The opportunities for improving your profits are nearly endless.
But there’s one thing I must warn you about. Don’t let yourself get confused when considering the wide variety of areas you could possibly leverage. Don’t get bogged down by all the possibilities and all the details of each. Start small. Pick one area to get started on. Pick the one that looks like it will provide the most return for the least effort. Then kick it into gear.
The important thing is to get started. Once you’ve seen the results you’ll get by actually leveraging a single area you’ll be highly motivated to take on a few more. One final point, I will make. Leverage can have a profound effect on your business. If you increase the response to your ads and boost your average sales amount, and increase the number of times each customer buys from you annually, and extend the number of years each customer stays with you, the leveraged affect is exponential. It can easily double or triple your profits and increase both the size and value of your business!
Finding the right coaching can be a challenge. If you want to learn how make your business more profitable and provide more free time for other activities then watch this free video from online marketing and Blog expert John Curran to find out more. Its a great resource for selecting the right coach to drive your business to greater profitability. Hope you took some great value out of this post today!