Borrowing from Peter to Pay Paul

Upsells, add-ons, cross-sells, support packages, insurance – they can all substantially increase your revenue and profit.

And that’s what we’re trying to do in this email series – increase your profits!

But improving the Items-Per-Sale lever is perhaps the hardest of all of the 7 Levers to improve.

Not because it’s physically difficult (it’s not); or that it takes a big investment of money or time (it doesn’t – it only requires you to change how you interact with existing clients).

It’s difficult because it requires a lot of thinking.

And unless you’ve done it 100’s of times before (or have the help of someone who has), it’s hard to do it effectively.

When upselling Items-per-Sale is done poorly:

  • It doesn’t actually increase sales at all;
  • It “feels dirty”;
  • It takes a lot of effort – and doesn’t work effectively;
  • And you burn your most valuable asset – existing customers.

This first point is where I’m going to focus today. Because when some people think they’re increasing sales – what they’re actually doing is very different.

When Upselling ISN’T Upselling:

Upselling is easiest to understand when thinking about businesses that sell lots of products or services.

  • You buy a car – you add-on sunroof, metallic paint and leasing package.
  • You rent a car – you add-on the insurance.
  • You buy a burger – you add-on the fries.

But if you’re not in a multi-product, or multi-service business, upselling gets messy.

Are These Scenarios Upselling? Or Not?…

  • If you sell auto parts to mechanics – is it upselling to get a customer to increase their purchase from 10 units of a particular product, to 20?
  • If you’re an elevator maintenance company – is it upselling to get a client to sign a 2-year contract instead of a 1-year contract?
  • If you’re running a café – is it upselling to get a client to purchase a “coffee card” for 10x coffees instead of one?

In all of the scenarios above, you’ve increased the total value of a single transaction – or the number of items the client has purchased.

But you really haven’t shifted the needle on your Items-per-Sale figures.

Instead, you’ve just “borrowed” future repeat sales – which is a different lever in the 7 Levers process.

That’s OK. You can do it. But you need to be clear that these types of improvements don’t actually count towards increasing your Items-per-Sale figures.

This is an important distinction to make between what improves the Items-per-Sale lever – and what doesn’t.

These changes “fudge the figures” – instead of actually and measuably increasing sales.

(And if I’m working with you – I won’t let you fudge the figures.)

Where to Focus to Avoid “Fudge”…

Increasing your Items-per-Sale figures requires you to be smart with your customers – and find the additional items that go beyond what they’ve buying.

  • In service-based work – increase scope, deliver greater features or functions or outcomes.
  • In product-based sales – enhance the product by adding helpful additional accessories.
  • Or add unrelated side-products and services that help the customer in other ways.

These improvements generate real and measurable improvements to your Items-per-Sale figures.

The Bigger Framework…

This one improvement sits inside the bigger framework outlined in our recent whitepaper – 7 Levers and the Growth Paradox. Make sure you get a copy.

Warm regards

Brent Hodgson

Pete Williams is an entrepreneur, author, and marketer from Melbourne, Australia.

Before being honored “Australia’s Richard Branson” in media publications all over the continent, Pete was just 21 years old when he sold Australia’s version of Yankee Stadium, The Melbourne Cricket Ground For Under $500! Don’t believe it? You will! Check out the story in the FAQ section (it really is our most asked question).

Since then, he’s done some cool stuff like write the international smash hit ‘How to Turn Your Million-Dollar Idea Into a Reality’ (+ the upcoming ‘It’s Not About the Product‘) and he’s created a bunch of companies including Infiniti Telecommunications, On Hold Advertising, Simply Headsets and Preneur Group.

Lots of other people think he’s pretty good too! He’s been announced as the Global Runner-Up in the JCI Creative Young Entrepreneur Awards for 2009, the Southern Region Finalist in the Ernst & Young 2010 Entrepreneur of the Year, and a member of SmartCompany’s Top 30 Under 30.

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