This is the second in a series of four posts that I’m going to share with you. Practical ideas on how you can create a number of positive outcomes for yourself, for your organisation and for your customers.

The 4 Key Questions of Business Growth…

The ideas are related to the 4 Key Questions of Business Growth. You’ll perhaps recall in a recent posting, I covered the first of the four questions;

How do you/we increase the number of Customers?

And we came up with 3 key strategies in answers to this question – Your Systematised Referral Process, Alliance Partnerships and Special Events.

I also suggested an exercise you could run, either on your own or with your team, in order to get those creative juices flowing.

(If you’ve not seen the previous ezine you can download a copy from http://www.pti-worldwide.com/ – it would be great to read it in conjunction with this edition)

Well now we’re going to look at the second of the four key questions;

How do you/we increase the average order value?

Here are three ideas for you – I know you’ll be able to come up with many more.

Accelerator 1…

The first idea is to increase your prices – an instant quick win!

“I can’t do that” I hear you say! “It’s a competitive market!”

When was the last time you had a price increase in your business?

Do you think your market place could handle just a 1%, 2%, or even 3% increase? More, depending on the nature of your business of course?

Do you have a differential pricing policy?

This could be a dedicated subject itself – however you have the point. Perhaps just take a moment to re read and answer those three questions I’ve just posed!

Accelerator 2…

The second idea is increasing the number of products and services your customers buy from you and your business.

In my experience, and feedback from our consulting and training teams (we’ve interacted with over 10,000 businesses now) most people do not buy ALL the products and services they could from you, simply because they do not know everything that you sell.

Could this be the case in your business?

Do you have a systematised process to educate and up sell customers and clients on your full compliment of products and services available to them? – a subject very close to my heart!

You’ve already invested the time in acquiring the new customer – you’ve already invested the money - now is the time to capitalise on all the effort you’ve invested to date.

I have another spin on this related to delivering the exceptional customer experience – however we’ll save that for another day.

And finally my third idea for you;

Accelerator 3…

Can you parcel or bundle products and services together?

Let’s go through the numbers first so I can explain the idea.

Let’s say that we have a product that sells for £100 and we can make it or buy it for £50, then the profit on a single sale of that product would be £50.

Sales Price - 100
Cost - 50
Profit - 50
Increase in Profit

However if there was a second product that we also normally sell at £100, which we buy at £50, then we could bundle these two products together to increase the average order value and more importantly the average order profit.

Let me show you.


Sale Price - 100 170
Cost - 50 100
Profit - 50 70
Increase in Profit 40%


As you can see we’ve bundled the products together and sold them at combined price of £170 a discount of £30 or 15% and yet the profit on this sale has increased from £50 to £70 an increase of 40%.

Naturally if we believe that customers would normally buy both products at normal price, this wouldn’t be a strategy to employ – however if the discounted price prompts additional sales then an increase in 40% profit would be very welcome I’m sure.

Summary…

So there you have it – the second of the 4 Key Questions of Business Growth and…three key accelerators you can instantly implement and personalise for your business.

Perhaps you can take some quiet time and brainstorm either on your own, or with your team, further ideas on the various ways to increase the average order value. My list now stands at 38 ideas!

Guest Article by Royston Guest