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How To Increase Your Average Transaction Size

One of the best ways to grow your business is to increase the amount you make per transaction. If you can sell more during the initial purchase, your business can grow without having to add more customers. Savvy business owners love this because it’s often easier than adding a ton of new customers in an effort to grow the business. You need to do both, but today let’s focus on increasing your average sales price.

Offer More:

Increase the amount of value you provide and you can increase the amount you charge. Price is only an issue in the absence of value. A simple way to add more value is to offer bonuses. The addition of great bonuses allow you to increase your price a little, due to the fact that it raises the perceived value of your offer as a whole.

Another way to achieve this is by offering a Premium version. You see businesses do this every day in a wide variety of industries. Some studies show that 10%-20% of all buyers will say yes to a premium option (more expensive option). People believe they get what they pay for and they want the best. It’s important to note that you should NOT create a Premium version of your product or service that has a price increase but not a value increase. Your customer should be getting more value by choosing this deluxe version.

Finally, the most common way to offer more is by simply adding an Up-Sell or One-Time Offer to your sales process. If someone is buying a painting on a large canvas, then a good up-sell would be asking the customer if they’d like to add a dust-cover for it. The customer is already in the buying mindset so it’s easy for them to make a decision. When you’re selling something people are passionate about they especially love taking advantage of your additional offers.

For example, if I’m buying a new guitar then it would be wise to ask me if I’d like any guitar strings, picks, or even a tuner. These are small and easy up-sells that aren’t going to double the amount the customer is paying but will increase your transaction size.

Offer Less:

This may seem a bit odd since we just talked about adding more to your offer, but by making things scarce and exclusive you can demand a higher price. If you’re selling a limited edition of something then it makes sense that the price will be more than normal. If I offered an intensive training course that gave people personal interaction with me, then I would severely limit the amount of people who could participate. By doing that I would have instant price justification because of the exclusive nature of the program. Brainstorm some ideas on how you can do this in your business.

WARNING: Let me say that when using scarcity in your business it MUST be real. If you say “Only 50 available” but you sell 90 then you are a liar and will do severe damage to your brand. Use it wisely.

Charge More:

It doesn’t get any more simple than this. It’s one of the easiest, oldest, and most proven ways to get more money. Just charge more. Most people seem to charge less than what they are truly worth. There’s a lot of reasons for that but I’ll save them for another post. But if fear is holding you back from charging more then build more value into your product or service. The more value your customers get from you, the more your price is justified…not just in their eyes, but your own.

Photo by skippy

  • http://www.facebook.com/AskMrVideo Perry Lawrence

    Love this John! Upping the price in this economy can be scary. However I just read that Top earners GAINED 6% this past year. And the folks who are currently buying my Video Podcasting services HAVE the cash! So I’m listening… finger on the trigger…

  • http://lifestoked.com Deacon Bradley

    It sounds so easy when you put it like that, hah. If you create a premium version, should you design it to be what you want people to buy (the best value)? For example, the regular version may look good, but the premium version delivers WAY beyond it’s price point.

  • SimonKerr

    Awesome John. Nice validation on what I just started doing this week. Always good to know I’m on the right track with growing my business

  • Joe Peck

    Thanks John! Great advice and works great for the movie business. Cheers!

  • http://www.JohnMichaelMorgan.com John Morgan

    Keep up the good work Simon!

  • http://www.JohnMichaelMorgan.com John Morgan

    Thanks Joe!

  • http://www.JohnMichaelMorgan.com John Morgan

    Excellent Perry! You’ve got a lot of awesome stuff going in your business!

  • http://www.JohnMichaelMorgan.com John Morgan

    It’s hard to say. Some businesses will create a premium version that is priced so high that it makes the basic version look like a steal. That strategy is going in the opposite direction of your question. I think the idea should be to always move people up in your products and services.

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