When you think of the possible ways to increase your monthly or annual sales revenue, what do you think of first? Typically, the answer is either adding more customers or raising prices.
Those are both proven paths to revenue growth, but they are not always possible or practical. Adding more customers may require capital you don’t currently have, because you may need to invest in marketing, infrastructure, and staff to attract and service additional customers. Raising prices can be met with buyer resistance, particularly in a competitive market.
Luckily, there’s a third way to boost your sales revenue. That method is to get existing customers to spend more with you—in other words, increase your average transaction size. Although customers spend more, they also get more in return, so they tend not to be as resistant as they are to price increases. And since you don’t need to expand your customer base, you can often boost your sales numbers without adding much overhead expense.
How to Calculate Average Transaction Price
The first step is to calculate your current average transaction price. That will become your baseline against which to measure your efforts.
To figure out your average transaction price, simply divide the amount of your sales by the number of customers you sold to during a given week, month, or year. Let’s say you sold to 40 customers—one transaction per customer—and your total sales were $12,000 for the month.
$12,000 divided by 40 customer transactions = $300 average transaction price.
Now that you know the baseline for your average transaction price, work to in increase that number.
Here are five strategies for increasing your average transaction price:
1. Ask for the Add-on at the Point of Sale
Ask the customer if he or she is interested in another relevant item, at the cash register or on the phone while taking an order. You also can include add-on suggestions in your ecommerce store (Amazon does this with “other customers purchased this plus that” suggestions).
Pick one item as the add-on of the week to make it easy for you and staff to remember and promote. Sometimes just asking a question can boost your average transaction size by 5 percent or more.
2. Display Related Items Close By
Display related items a customer may need close to other items being purchased. You see this often in the grocery store, with a basket of lemons on the seafood counter. People won’t run all the way back to the produce section for one lemon, but they’ll gladly throw one in the cart if it’s right there. Service businesses also do this, such as salons that display hair care items and cosmetics near the cash register.
Ecommerce businesses can easily display related items somewhere on the page. Even content businesses get into the act by displaying related article headlines at the bottom of the page.
3. Use Flash Sales and Promotions
Reduce prices but increase sales dollars? Sounds counterintuitive, right? But it works, because it gives customers a sense of urgency to buy. For your promotion, pick high-margin items that everyone needs, but make sure they are low-priced items that buyers won’t think too long about purchasing along with other items they came for.
Don’t forget to promote flash sales on your social media channels. For example, restaurants, coffee shops, and bakeries often use social media to spread the word about promotions to nearby consumers offering the special of the day.
Make use of email, too. Sending a solid email promotion to your email list can drive in-store sales as well as online sales.
4. Offer Quantity or Bulk Discounts
This technique works especially well with consumable products where buyers tend to stock up or have recurring needs.
But it’s not just for consumer staples. For a dog grooming service, this might involve offering a discount for buying six months’ worth of services instead of one grooming session. Or it might involve offering a full array of optional services instead of the basic grooming, for a discounted upcharge.
This technique can also be used in the online services world. With job listings, for instance, it might mean offering a package of six listings at a discount versus a single listing. A buyer might end up buying more listings than otherwise, because the package is a good deal.
5. Offer Bigger Ticket Items
Start offering items with a higher price tag along with your existing items. Selling a $1,000 item when your average transaction size is $300, can make a considerable difference. You may not sell a lot of that $1,000 item, but adding just one per month to our hypothetical calculation above could boost your average transaction size by nearly 9 percent to $325. For example, a business with a software-as-a-service (SaaS) product could sell a higher-priced one-time implementation package.
With a little creativity, these five techniques can be applied to most types of businesses. One thing the techniques all have in common is the potential to increase your average transaction size with minimal extra effort and little to no up-front investment. They can grow your business—and grow it profitably.
This article was originally published on Inc.