Have you had that printer buying experience-the one where you visit your favourite big electronics retailer to pick up the $69 special but walk out spending $150? You leave with a full extra set of ink cartridges, a few packages of “the best photo paper in the store”, a $20 cable and a 5 year warranty? This is far from accidental. Acquiring new loyal customers is time consuming and expensive. Big retailers know that the way to increase revenue is by increasing the amount of money the customer you have already acquired spends. As a small business, you can do the same!
If you learn the language and approach this right, your customers should not see the addition of associated products as an upsell or a cash grab, they should leave feeling that you looked out for them and provided a complete package.
Start talking about the total solution from the beginning. No one likes when they go to the dealership to pick out their brand new car, settle on the price and then get called into the manager’s office for the upsell. Instead, starting this conversation early builds trust and opens the client’s mind to your expert advice. Ask the questions of your customers that bring them to understand that they will need more. Recalling the printer example, questions like “do you know how you plan to connect this to you computer?” or “do you have good quality paper at home?” or even, “what do you plan to use this for?” If, for that final question, they have said, “print family photos” selling photo paper should be easy. For the big retailers, these associated products often generate a much larger margin than the original product ever could have generated.
If you run a small business, take some time to think about what associated products and services you can add to your offering and then work to make the sale of the additional products on every transaction. Process some quick calculations to see what strides you can make in efficiency and profitability. Determine how to increase the amount each already acquired customer spends on each transaction. Finally, spend some time at your local big box electronics retailer and watch the sales people work their magic as they turn the $69 sale into $150. We, as small business owners, could learn a lot.
Here are some key steps needed to implement a successful associated product strategy:
- Make the associated products available. If you sell printers, have the cable and ink close by. If you sell bookkeeping services, have the pamphlet on direct payroll deposit services handy. If you sell cars, be ready with the warranty, scotch guarding, rubber mats and running boards. If you sell power drills, have the drill bits ready to go.
- Practice the conversation with your sales people. Powerful questions are the key to building trust when you are working to sell anything. Start by asking questions that assess the client’s needs, show a genuine desire to help with their specific problem, and then present a complete solution, ask for the sale, and ask for feedback.
- Put the plan into action. Use the conversation you practiced with your team on every new client you meet. You will find that leading them to the “complete solution” will make clients feel confident about spending more.
For more information about any of Halton Region’s Small Business Centre resources and services, contact us at 1-866-442-5866, by email email@example.com or online at www.haltonsmallbusiness.ca, or visit us in person at 1151 Bronte Road, Oakville. Don’t forget to follow us on Twitter @haltonecdev and Facebook atwww.facebook.com/HaltonSBEC.