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3 Easy Ways To Increase Your Average Transaction Value
Increasing your average transaction value is the process making more money out of each customer.
It is one of the easiest ways to increase profits in your business. Most of these techniques are used by major corporations everyday (would you like fries with that?) and can be applied to small business as well.
Upsell The Customer
Ok, so I hinted to this one before. It’s the most common technique used in business today. The most famous example is that sales line from McDonald’s, but there are other example such as additional costs for extended warranties as used by electronic goods retailers. The key is to provide an offer that is complimentary to the original sale and increases the perceived value of the product to the customer.
Bundle Your Products
Product bundling is when two or more products are combined as a salable package. The cost of the package is higher than the cost of the individual item, but less than the two when sold separately. This works particularly well with product sold at high margin. A good example being computer software. The bundle creates the perception of value and allows you to increase your profit margin on the total package.
Increase Your Price
Yes, this might seem obvious but hear me out. The important fact you need to know is how changes in price affect demand in your market. In many business categories, price is reflective of quality. A good example is wine. A wine that is priced below $10 is perceived to be of inferior quality that a wine that is priced above $20. The $10 wine may be better but the $20 wine will be the one purchased when quality is the key driver for the purchase decision.
Look at your product and see if your market would accept a price rise with no change in demand. One other thing to remember is the concept in consumer psychology called just noticeable difference. This concept just means the point at which consumers are likely to notice change. The general rule in pricing is that an increase of 10% is going to be noticed more than an increase below 10%. So try to keep the rise below 10% if this is the strategy you choose.
So there you go. Three easy ways to increase the amount of money you make from your customers. Let me know what you think by making a comment below.
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