Imagine being able to add tens of thousands to your small businesses bottom line easily with a principle utilised by big businesses across the world! In one of our previous articles I spoke briefly about add-on sales, or the ‘Would you like fries with that’ effect. I would like to expand on this principle as I believe it is essential in almost all businesses.
The basic principle is that you ask your customer at the point of sale if they would like to add something inexpensive to the transaction. This might sound small, but it adds up and could potentially make your business a tidy profit. For example, let’s say you run a café, you sell 100 takeaway coffees a day. If 10% of these customers agree to add a muffin they otherwise would not be purchase for $4 this will add $40 to your daily sales. Now if you extrapolate that out over a year that’s $10,400. For doing basically nothing extra besides asking a simple question.
The principle is simple. Select a product that costs a small amount for the customer, maximum gross profit for your business and minimal/no labour cost for your business. Then ask your staff to ask every customer if they would like to add on the item to their order at the point of sale. You should try and ask every customer because in my experience only 10% will agree. Might sound like a low score but when you get better at it you can increase that percentage to as much as 50%.
The next step is tracking, if you aren’t tracking how do you know how far you’ve come? Make sure you are tracking every sale and every add-on sale. This will give you an idea of the effectiveness of the item you are using for the add-on promotion. Make sure you stay the course and don’t flip and flop between items otherwise your data will be a bit off.
Sounds great right thousands for not doing much? But you need to be careful when selecting the product to add-on. Make sure it is a low cost (i.e. a muffin in a cafe), high Gross profit and requires minimal labour to produce. Don’t be tempted by adding something that will take too long to produce or use too many other resources, keep it simple.
Use your brain and make sure you are asking the right customers. Parents are not going to appreciate you selling a child ice cream when they were meant to get a loaf of bread. Know your audience. A muffin works well with a coffee, extended warranties work with TVs. however, it is important to use your emotional intelligence don’t try and sell a milkshake to someone ordering a salad.
You might think that hospitality is the only place this works but trust me I’ve seen it work in a wide range of industries. Think about it, how many times in your week does someone try and add to your transaction. The chocolate bar when you get fuel, the warranty when you buy a TV, upgrade to a premium room in a hotel and of course the fries when you buy a burger. Think about your business and what you can add on for your customers maybe premium paint or business consulting services, the options are endless.
I hope you implement this principle into your business. If implemented properly you can potentially increase sales dramatically for little extra effort. Please feel free to utilise our add-on sales tracking tool at https://www.yodelit.co/tool and have fun out there!
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