by Bruce Doyle | Sep 4, 2018 | Marketing
Yet another area that I didn’t understand, was the importance of, was measuring the Average Dollar Sale in the business. This is easy to calculate, simply divide your turnover by the number of sales and you’ll have your overall average. I.e. $1000.00 sales and 100 customers then your average sale is $10.00,
Yes, some customers will spend next to nothing where others will spend heaps, that’s fine. Now you know what the average for the business is, calculate the average dollar sale for each member of your sales team, my experience is they will vary dramatically and you’ll quickly be able to see who is making the business money and who requires training. This is one of the easiest ways to increase the profitability of a business. Increase your team’s average dollar sale.
Run competitions and reward the highest performers and those that are making improvements. Increasing average dollar sale is all about having your existing customers spend more with you. It’s not about having to find new customers.
Try running the numbers in your business, what would your turnover look like if all sales were done by your salesperson with the highest average? How does this compare to your actual turnover? That’s the minimum you’re missing out on!
I’ve seen businesses grow by 200-300% in this area alone. If you’re not getting the maximum spend from your customers my recommendation is focus your energy here rather than trying to generate new customers, it’s a whole lot easier to get your existing clients spending more than it is to find new ones.
Ask yourself and your team, do our clients know all the products and services we provide? How many of our clients could be dealing with our competitors simply because they didn’t know they could buy the product or service from us?
There are a stack of strategies that can be applied to your business here, it’s just a matter of selecting the ones that best suit you.
If you need any further encouragement to focus your attention here, then here is the first strategy I implemented as a result of working with my Coach.
This resulted in 142% increase in turnover in the deli section of the business OVERNIGHT!
We calculated the average dollar sale for the ‘Deli Section’ of the business as $5.42. The strategy, was similar to the famous McDonalds one ‘Would you like fries with that?’
A training session was scheduled for the 12 girls in the sales team in the deli and our new sales system was launched. Put simply, we created an add on sale for all our products and then this was added to our ‘sales system’ as part of the way we do business. What had happened previously i.e. a customer would buy a piece of brie for say $4.50, now the sales script for that product was ‘Would you like quince with that?’, the normal reaction was, ‘What’s quince?’ To which our response was ‘Would you like a taste of Brie with quince, they are lovely together’, you would then give them a taste, making sure that you served it on your best crackers or breads. The customer would in most cases[ 81%] buy the quince which had massively increased the sale and in 38% of cases they would take the crackers or bread as well.
It didn’t matter which product the customer chose, dips, pates, terrines, olives, etc, there were scripted add on’s for each.
Here’s what resulted,
Day 1 of the new sales system. The Average sale increased from $5.42 to $13.11 that’s a 142% increase in turnover overnight. The even better thing was that it never dropped below $13.11 again. The turnover in the Deli section of this store had increased from $14,900.00 to $36,040.00 per week!
So how much did I have to spend on advertising to achieve this increase? ZERO. What was the increase in fixed overheads, rent, rates, power, etc? ZERO. What happened to wages? Nothing, the team were still serving the same amount customers. The only cost I had on a 142% increase was ‘cost of goods’.Tasting stock was happily provided by suppliers.
Strategy 2 and 3 were just as simple and further increased the average sale to $14.23 over the next 90 days.
Strategy 2; Creating a shopping list for clients works a treat, we simply asked the customer, ‘So your function or dinner party runs perfectly would you like to run through a checklist of all the things you made need?’ This works in most businesses i.e. the checklist in the paint shop with all the accessories you may need to complete the job.
Strategy 3; Simply to increase the portions and sizes of our packaging. Until then, we only had one size of plastic container for dips, olives and antipasto, by adding small, medium and large and changing our standard size to the medium, that alone increased the sale from approximately 200g to 350g.
Cheeses were portioned into larger chunks, as we realised customers weren’t buying by weight they were buying by the piece i.e. a standard wheel of soft chesses such as a brie is generally around 1 kilogram, we would normally cut this into eight pieces of approximately 125grams each, by changing this to six pieces the size didn’t look a lot different and we didn’t sell any less, but the weight had changed to approximately 165 grams resulting in an increase of 34% instantly!
We then added package deals where the chesses and crackers were packed together or a selection of cheeses were wrapped together i.e. a soft cheese such as a Brie, a Tasty Cheddar and a Blue. Pates and terrines were all sliced thicker using the same theory as the cheese, all of these so simple to implement with an immediate impact on turnover.
The result after 90 days was the deli section of the store had increased from an average of $5.42 to $14.23 or $14,900.00 to $39,118.25 in gross turnover. Two years later we had increased that to $16.80 or $46,183.00.
Hey, I don’t want to harp on this too much but this is just so easy when you know your numbers and take the time to develop and train your team on a sales system. If there is an easier way to grow a business than getting your existing clients spending more, then up until now I haven’t seen it.
Pioneered the Busines Coaching Industry, Global Business Coach of the Year Hawaii 2003, Author of 4 Business Books, Entrepreneur and Founder of UnlimitedBusiness.com
Bruce has worked with 1000's of Business Owners over the past 20 years plus he's owned and operated over 30 Businesses across a range of industries. His focus is teaching business owners how to dramatically GROW PROFITS and GET MORE FREEDOM IN THEIR LIVES.