To grow your business, you need to look at what your customers are spending with you. You can grow your customer base by either getting more leads into your sales funnel or by increasing your conversion rate or both. Once you have your increased customers base, you need to either increase your customers average spend per transaction, do this by upselling to your customers, or by increasing the number of times your customer's purchase from you.
The retail industry refers to an average basket size. Although the basket size is essential, retailers should also be reviewing customers basket diversity.
Let us look at a simple equation to understand the annual value of a customer. We start by looking at the number of times your customer purchases from you and the value of each purchase. For example, let us say your customer buy from you 10 times in a year and they spend $200 each time. All things being equal, they could add $200 to their value. Either by buying one more time a year, so taking it up to 11 purchases or by purchasing an extra $20 each visit. So, there are two ways to increase their value either grow your customer basket size or entice them to buy more often.
Depending on what product or service you are selling you will need to look at different ways of achieving this.
Here are a few things to consider.
1. Upsell - Take time to get to understand your customers' needs. You may have the opportunity to sell them something else. This is easier to achieve than you may think.
2. Understand their buying habits - Why do they purchase the way they do? Do they work on min stock holdings, or do they buy as they need? Do they buy when you remind them about your product or service offerings?
3. BOGOF deals - Buy one get one free! It works. The psychology of buying more than you need, or more than you planned to buy at the time, needs no explanation it just works!
4. Offer a loyalty programme - People buy more when they get rewarded for buying.
5. Review your pricing - Make sure you are market-related not necessarily the cheapest.
6. Offer superior customer service. - Customers are willing to pay and spend a little more when they are happy and treated well.
If you get this part of the sales success formula right, you are guaranteed to grow your business.
For insight and support on upscaling your business growth, contact Coach Sonja Shear where business growth is guaranteed.