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Regardless if your business is a typical ‘bricks and mortar’ store or an online website, there’s a number of ways to increase your sales and profits and never spend a dime! Some business owners decided to add products or services. A creative method to increase your cashflow along with your sales and profits is by upselling your customer. Typically, this is done during the shopping or just before the checkout.
We’re not talking about one time offers or just a ‘bigger’ size of what you’re already selling; we’re talking about upgrading your customer.
Increase high profit sales 50% or more!
Getting creative and selling upgrades to your customers can become a very profitable part of your business. Those upgrades could be that silent profit center that ultimately increases an individual sale by 20, 30 or 50%; and sometimes even more.
The upgrades that we’re talking about are extended service packages or extended warranties. There are countless ways to sell these ‘extended’ packages and you will find that a large percentage of your customers will add them on to their current purchase. They do that because they’re looking to be sure they’ve got the ‘entire package’; they’re buying their ‘peace of mind’.
Extended warranty or service packages typically have very high profit margins. They are designed to cover all or a portion of a repair or service related to the original purchase. In subtle terms, you may want to consider the extended warranty as an ‘insurance’ that guarantees the performance of the product or service.
As an example, look at Extended Warranty packaged for cars. For either a one time fee or recurring subscription charge, the vehicle owner gets additional coverage in case of break downs or repairs that are beyond the original or current warranty (if there is one).
A lot of these extended car warranties also include a variety of ‘add-ons’ like roadside assistance, operator assisted directions and other perks.
If the products you manufacture or sell already carries a warranty, consider selling an extended warranty that ensures the product’s performance will continue. In some cases, extended warranties have even gone as far as becoming a Lifetime Warranty. Of course, every one of these extended packages have limitations, conditions and restrictions; but in every case they increase the amount of the sale along with the cashflow and profits of the seller.
Build Profits and Eliminate your Competitor
using this excellent Marketing Strategy!
Selling Extended warranties is an excellent strategy to separate your business from your competitor. When you add the term ‘Lifetime’ to your warranty, you will turn heads in your market (and amongst your competition), guaranteed!
For physical products, your extended service or warranty package could be in the form of future upgrades, added benefits, membership programs, repeat purchase incentives or discounts or even service, installation, assembly or maintenance packages. (A good friend of mine confessed that when purchasing toys for his children, the most dreaded words were ‘some assembly required!’)
In the case of digital or intangible products, your extended service or warranty package could be in the form personalized technical support, installation help, access to private membership websites or forums, or even a course (video or download) that teaches the customer how to get the most from his new purchase. Include helpful information that provides tips on how to get the most enjoyment from their new purchase.
If you’re a professional or involved in the service business, your extended service plan could take the shape of membership programs, premium services, future discounts or even larger bundles of time/service at discounted pricing. As an example, if you’re a consultant, you could offer packages that include several more hours of your time on a retainer basis. You may include follow up consulting or on-call priority services and privileges, all at a discounted rate.
When you are in a seasonal business, consider putting together ‘prepaid packages’ of service. That way you have the opportunity to market and sell your service during your slower, off season time while improving your cashflow. You may even want to create different size ‘bundles’ that offer different discounts, all based or focused on the total value of the package.
Are Upgrades & Bundles a good Marketing Tool?
If you think people don’t buy bundle offers, look at the examples that phone companies have set. Because they all offer a similar range of services that include your typical telephone, plus wireless (cell phones) and internet service, they offer you a bundle to ‘lock you in’ as a customer.
Look, when you have a customer at your door ready to purchase, all of the marketing efforts have just proven to pay off. All the hard work is done. Now you have an opportunity to really capitalize on the sale; your dealing with a person that has already expressed an interest in purchasing from you. Don’t miss this opportunity to increase the sale and your profit.
Put Names on your Upgrade Marketing Packages
Another way to market your upsell or upgrade is to name your packages. You’ve seen scenarios where you can purchase the bronze, silver or gold package. And remember, your packages don’t have to be just more of the same service that you’re already selling. Consider this as an opportunity to introduce your new customer to all the other services or products that you offer. A great example, (and one that I am sure you’ve already heard) is ‘Do you want fries with that?’. No matter what burger or sandwich selection the customer made, they’ve just been introduced to the french fries! What a killer marketing move!
A Marketing Tool to build Repeat Sales
When considering your extended service or warranty packages, don’t forget about the parts of your business that are repeat sales. Of course, you’re not going to call it a warranty program; it becomes a ‘rewards program’. Provide a flat discount or package of services at a discounted rate. Consider the hair stylist that offers packages for future services; you lock your customer in for a longer period of time; it’s almost like putting a cage around them and eliminating your competition!
Whatever bonus, extended service or warranty package you offer, be sure to cap it off with a professional look and make it tangible. That could be as simple as a printed ‘Certificate’ created and printed from your home or office computer. That small added cost to you will be returned in increased sales and profits.
Even though extended service packages or warranties are profit centers themselves, don’t lose site of the opportunity they bring for you to expand your core business, brand and reputation. You can easily ‘cross sell’ (offer your version of ‘fries with that’) or simply offer premium services that are not includes otherwise.
People love the options. It shows that you’re taking care of them and they go a long way with the client who is looking to eliminate the risk. Help your customer feel important and secure; make sure that every sale includes some offer to upgrade in either added product or service. Your bank account will thank you; the customer will too!
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