5 Simple Steps to Increase Your Average Sale Size
To double your revenue, you don’t necessarily need to double your number of clients.
PHOTO CREDIT: Getty Images
It's happening everywhere in consumer sales. Have you ever added fries to your lunch order at the suggestion of the cashier, or bought five accessories to complement your new camera or phone because there was a great "limited time offer"? If so, you've experienced the receiving end of a successful upsell. While it's commonplace for products and goods, increasing your average sale size for software and services is a different ball game.
As an entrepreneur or business owner, increasing average orders is gravy: it allows you to work less, grow your revenue faster, or increase your margins. However, many professionals think that doubling their average sale size is impossible, or so difficult it isn't worth it. So, they spend all their efforts trying to increase the sheer volume of clients.
Doubling your average deal size is possible. Like those fast food companies and retail stores, it's really about perfecting the timing, the offer and the value derived from it (think ROI). At my current company, we've implemented some simple tactics that helped us increase our deal size by 180 percent in the past three months.
The path to perfecting the upsell in any industry is really understanding your customers as a whole, and then personalizing the message to the individual. Once you understand their motivations, struggles and the value they derive from your product, you'll have all the information you need to consistently increase your average sale size.
1. Understand The Decision Process
To find the perfect upsell for your customers, you'll need to invest in learning about not only who they are, but also what value they get from your company and the frame of mind they're in when interacting with you and your sales team. Start by exploring what your product does for them: is the problem it solves urgent, or is it a long-term investment? Is your product a "must-have" or a "nice-to-have"? Is it a product that needs to be adopted by the entire organization or can a small group start using it as a pilot? What level of management is making the final purchase decision?
2. Talk To The Right People
There are few things more frustrating than delivering a great sales presentation and forming a relationship with someone you think is a lead, only to find out that they aren't the final decision maker. Yes, you've developed rapport and trust between your brand and someone at that company, but you'll have to exert nearly as much effort to convince a second - or even third - person before you can close the sale. Worst, in some situations, the person you've pitched will go pitch their boss, the actual decision-maker, but leave out important details or make errors in their description -- and your chances of closing a big deal are likely down the drain.
To find out who you should talk to at the organization you're targeting, start by looking at the deals you've closed in the past, or deals that your colleagues have closed. What job title or seniority were the decision makers? If you're not sure who the right person is, don't be afraid to ask your lead if they are the decision maker or if they can introduce you to them.
For example, with my team, we've looked at the decision makers of our current clients by industry and by company size. At small advertising agencies, we may target the Managing Partner, whereas as, at medium-sized technology startups, the decision maker is more likely the VP of Sales.
You can also invest in a lead generation tool that includes a lead scoring function. It will help you programmatically analyze your customers and point to who you should target at organizations you haven't yet contacted, which will save you a lot of time and confusion in the future.
3. Nurture With Personalization and Precision
Once you've identified who you should target, you should make sure you reach out to them with a very customized message. If you aren't personalizing your messaging to leads, you're significantly lowering your chances of a positive response. Using an outbound automation software that allows you to segment your leads will save you a lot of time.
One of the most effective ways we've found to personalize the messaging is to use merge tags in email sequences. These tags allow you to dynamically add content that is different in each email. For example, you can customize the first name, company name, industry and so on.
4. Sell Your Unique Value
Value-based selling means creating a sales relationship that starts with a "discovery" stage in which you explore what problems your lead has that your product may be able to solve for (commonly referred as "pain-points"). Next, you help them realize how valuable it would be to solve that problem. And finally, explain the role your product would play in fixing the problem.
By following this formula, in this order, your lead will end up telling you why they need your product.This will not only make them more likely to buy, but also trust that your brand has their best interests in mind -- which will make them more receptive to repeat and increased orders.
You'll likely be able to group some of your customers around the unique value you're delivering to them. For example, my team and I have split our clients into 3 main groups, for which we have a different value proposition:
Entrepreneurs & Agencies. They typically do sales themselves and so we help them automate the outreach process.
Small and Medium Businesses. They typically have several sales reps and their goal is to increase revenue fast. We help them build a repeatable and scalable process.
Large Organizations. They typically have a large team, lots of (usually bad) data. We help them identify who they should target next and how to implement account-based sales efficiently.
5. Leverage Your Existing Connections and Clients
When you close a large contract with a big organization, you've likely developed a strong rapport with the decision makers. Don't be shy about asking them for leads. A referral from a trusted source can often double the speed at which a lead gets through your sales funnel, and smooths the entire journey, as less trust needs to be developed from scratch.
In the past couple of months, we started to systematically ask our clients if they knew any other companies that would be a good fit. Referrals now represent about 20 percent of new business - our fastest growing acquisition channel.
Increasing your deal size for your software or services might not be as simple as asking customers at checkout if they want to add fries, but it is within reach for every company. With a careful analysis of your customers and their decision process, as well as a strategic approach to engaging with the decision maker, you'll be on track to double your deal size in 2018.