By Dan Rafter
Dan Rafter is a freelance writer and editor with 15 years of journalism experience. Dan blogs via Contently.com.
The current economy isn’t exactly a friendly one for most small business owners. Too many consumers are worried about losing their jobs. Others fret about the value of their homes continuing to fall. Still others haven’t received even cost-of-living boosts to their salaries in three years or more.
It all adds up to customers who are more cautious than ever when it comes to spending on retail goods. This means that businesses need to use every tool possible to convince these buyers to part with their dollars.
One way to do this? Discover the selling science behind add-ons.
You know what an add-on is. It’s that extra purchase — or two or three or more — that consumers make when they’re buying a specific product. For instance, a consumer stops into the local hardware store to buy a seeder. While there, he notices a fresh package of grass seed and another of fertilizer sitting near the seeders. Not only does this customer purchase a seeder, he also buys the fertilizer and seed. These add-on purchases can add up during a week, month or year.
Nabbing the Real Money
Retail blogger Rick Segal says that add-ons are where the real money comes from for small business owners. That’s because stores don’t make as much of a profit on the first item that customers buy. Overhead, advertising and employee salaries suck up the profits.
But the add-ons? They provide that extra bit of income that makes the difference between a thriving small business and one that’s struggling to keep its doors open.
Segal breaks add-ons into two categories, extras and accessories. Accessories are fairly obvious: You’re selling a customer a bottle of perfume. You might ask this customer if she’d like some body lotion to go with it. Or you’re selling your customer homemade pasta noodles. Why not ask this customer if she’d like some homemade sauce to go with it?
Want Fries with That?
The key to convincing customers to make these second purchases is simple: suggest them. Merely grouping like products together is a good start, but to really get the add-ons adding up, you and your sales staffers have to speak up.
You can also promote add-on purchases by running special sales during the year.
For instance, you can advertise that batteries are 20% off when customers purchase a new digital camera. This encourages shoppers to pick up a package of batteries, even if they didn’t plan on doing so.
Extra items are a bit more challenging. These are items similar to what the customer has already purchased, but different.
Footwear is a good example. Your customer may be purchasing a pair of work boots. Your sales associates should then ask if this customer is interested in a pair of slippers that are on sale or a pair of running shoes that are currently being discounted.
The Efficient Way to Build Business
There’s a real positive that comes with training yourself and your staff to sell more add-on products: It’s a cheap way to build your business.
According to Entrepreneur, there are three ways to build a small business: You can attract new customers. You can work to make customers buy your products or services more frequently, or you can increase the size of your customer transactions.
It’s important to focus on adding new customers. Businesses that don’t do this will surely fail. But it’s equally important, and far more cost-effective, to focus, too, on convincing your customers to increase the size of their purchases and to purchase more often. Add-ons can help you accomplish these tasks.
After all, when a customer buys a pair of dress socks with that new suit he just purchased, you’ve increased the size of his transaction. When a customer remembers that you sell the perfect film for the camera she just bought from you, it’s likely she’ll come back to you when she runs out of film. You’ve just used the power of add-ons, then, to increase the frequency of this customer’s purchases.