It’s the back to school time around the country. But school is never NOT in session around here. What are you going to do this month to improve yourself and your business? This weekly marketing tip is a great place to start. In keeping with the back to school theme, This month we’ll tackle Econ 101, talking specifically about places where you can gain financial leverage in your business.
First up, your average transaction value (ATV). You need to constantly be thinking how you can bump your ATV. Just think what a 10-20% increase in your ATV could do for you bottom line every year. What can you up-sell that your not currently selling? What can you add as a cross-sell?
Here’s an example in our 3D Mail business. We are constantly asked about mailing list, and I would have conversations with clients about lists. We would define a target market that would fit their business to use with 3D Mail, only to tell them to go somewhere else to buy that list. Well, we fixed that real quick, and now we provide lists to our clients. It’s not a big part of our business, but it was non-existent two years ago, and it’s an easy add-on when I have a discussion about cold prospecting with clients.
Here’s another great example. In reading Dan Kennedy’s new book, “Making them Believe.” He was working with a manufacturer of leather cleaner. It was an all-in-one cleaner, treatment, polish. He created three different cleaners for the same can. One for cleaner, one for treatment, one for polish and packaged the three as a ‘system,’ instantly increasing the ATV of that product. If you’re a serious student of promotion, especially of yourself, Dan’s book, “Making them Believe” is must reading.
Next, your transaction frequency. How can you get your existing clients to buy more frequently. The first and easiest way to do this is through continuity income. We’ve gone over this before, so we’ll briefly touch on it’s meaning. Continuity income is essentially a monthly billing program where you offer your product or services to your clients, and they pay automatically each month.
Usually it’s billed directly to a credit card until they ask you to stop. For years I’ve been poking, prodding, pleading and begging my clients to try and find ways to use continuity income in their business. The conversation usually ends with, “Yeah, that works in __________, but I’m in ___________, so I can’t use continuity.” Here’s an example from an industry in which many would think you couldn’t have continuity, the auto repair shop business.
In working with one of our auto repair shops we found they offer continuity in their shop. They call it their VIP program. Each month, the client is automatically billed a predetermined amount to their credit card and it’s put in the repair shops “bank.” for that client. Plus the repair shop matches 20% of that. So a $25 monthly ‘deposit’ becomes $30. They can then use the ‘bank’ for ANY auto repairs the shop performs, such as on on-going maintenance, or unexpected future repair costs.
You can also sell part instead of the whole. For example, if you sell an information product for $97, you could break it up into “intro” and “advanced” courses and sell each for $67, netting you an extra $37. Times shares do this with hotels, condos. Even net-jets fractional jet ownership. Each of those gives the owner more transactions for the same product.
Lastly, you can improve the yield on activities you’ve already invested in. Your website is a prefect example of this. You paid to have it created and hosted, etc. What would be the results if you increased your conversion rate (the rate you turn browsers into buyers) by 2%, 5%, 10%, or 25%. Another example are your phones. How can you or your sales reps increase their productivity on the phones? Using the same rate as above for your website, what would that do for your bottom line.
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