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Grow Your Sales By Focusing On Your Average Value Of Sale

Updated: Feb 13



Hello there! Today, let's explore the exciting world of boosting your business's income by making your average sale worth more. Buckle up because we're about to dive into strategies that will skyrocket your success.


But before we dive in, let's break down the 3 main ways to make more money in your business:

  1. First, you can get more clients to join you.

  2. Second, you can make each sale worth more on average.

  3. The third way is to encourage your clients to buy from you more often throughout the year.

Let's break it down with an example from a small company:

Imagine you have 350 clients. On average, each client pays you $3,500 per year, and they do business with you about 1.5 times a year. This adds up to a total revenue of $1,837,500.

350 clients × $3,500 × 1.5 = $1,837,500


Now, let's say we work on improving all three aspects: clients, average sale value, and transaction frequency. We increase each area by just 10%, which is totally achievable. In this new scenario, you'd have 385 clients paying you $3,850 per year, and they do business with you about 1.65 times a year. This results in a revenue of $2,445,712, which means a gain of $608,212 in revenue. You just grew your revenue by just under 33.1% which is massive.

385 clients × $3,850 × 1.65 = $2,445,712


By focusing on improving each of these three areas by just 10%, you'd see a massive jump in your revenue of just under 33.1% This technique is known as "divide to multiply." You break down the key parts of your business into smaller pieces, work on each piece to improve it, and then put it all together to achieve remarkable growth.


Your Average Value of Sale:

Moving forward, let's focus on one of the three key areas: your Average Sale Value. This area holds a triple boost for your business: it increases your revenue, improves your cash flow, and enhances your business's value. Essentially, you get three benefits from working on this one important aspect.


If you're steering a firm with growth in mind, this is where your attention should be. Understanding and making the most of what each sale brings in can be like discovering a treasure trove for your business's growth, profits, cash flow, and overall value. When you raise your average sale value, your earnings get a boost, cash moves more smoothly, and your entire business becomes more valuable. Let's delve into how you can make this happen for your firm.


Grasping the Average Sale Value:

Let's talk about the average sale value—it's the typical amount a client spends in a single transaction for your services. You calculate it by dividing your total earnings by the number of transactions. And then, divide this number of transactions by the number of clients you have.

But here's the deal: if you're not aware of these numbers, you're essentially driving blind. If you truly aim to grow your revenue, profits, and the value of your business, then you need to focus on what truly counts. That means knowing how many clients you have, how much they spend on average, and how often they transact.


Why does this number matter so much? Because it directly impacts your financial health. When you increase your average sale value, you make more money without having to hunt for new clients. And guess what? Getting existing clients to buy more from you can be up to 6 times more cost-effective than chasing new clients. It's a game-changer.


Why Bigger Average Sales Matter for Firms:

Making your average sale bigger is a big deal for firms, and here's why. First off, it helps you make the most out of every time a client buys from you. By encouraging clients to spend a bit more, you can tap into the full value of your services and make more profit.


Plus, it helps cover the costs you can't avoid when providing your services. When your average sale value rises, your income goes beyond your costs, and you end up with a nice margin. Lastly, a higher average sale value lets you invest in growing your business. Think marketing efforts, staff training, and expanding what you offer.


Smart Strategies to Raise Your Average Sale Value

Boosting your average sale value isn't rocket science. Let's take a look at some strategies that work wonders:


Upselling and Cross-Selling Techniques:

Imagine this: you're serving your clients, and you give them a fancier version of what they're already buying. That's upselling. You show them all the extra benefits and value they'll get, and guess what? They might just decide to spend a little more. Then there's cross-selling, which is like suggesting other stuff that fits right alongside what they're already getting. Both tricks make your average sale value go up and create an even better experience for your clients.


Now, let's talk about making this strategy work for you. The secret sauce is figuring out what your clients usually buy from you. Most businesses have those main products or services that make up around 80% of their income. Your task is to match these core offerings with other products or services you can cross sell that your clients would love. Here are some examples to get your gears turning:

  • Imagine you run a domestic cleaning company. You could offer an extra service like doing weekly laundry, dry cleaning, and ironing. You pick up the laundry one week and drop it off the next, right along with your weekly cleaning services.

  • If you're in the accounting business, think about providing business valuation services to clients who seem to be growing their ventures.

  • For a legal firm, how about organizing workshops on asset protection for certain clients you identify by going through their files?


These strategies aren't just about boosting how much you make from each sale. They also turn you into a hero in the eyes of your clients. It's a total win-win situation!


When it comes to upselling, think of it like having different versions of your products or services. Imagine a range from bronze to platinum where the value increases. Even in a field like law, you could have your regular services and then offer a special client membership package. This package could come with extra value, bonuses, and different levels of interaction. Think of it to supercharge your client experience, like having more frequent meetings with different partners.


Bundling Services or Making Packages:

Picture combining a bunch of services into one package deal. Clients love that! Bundling makes them feel like they're getting a lot of value. It's a smart way to sell more and raise that average sale value. Sometimes, throwing in discounts or extra services can make clients spend even more.


Happy Clients, Loyal Clients:

When your clients are happy, they spend more, and they keep coming back. It's that simple. To make them happy, offer top-notch service, solve any problems quickly, and go above and beyond. Building strong relationships creates trust, which leads to more spending and repeat business.


Personalized Experience:

Imagine giving every client a unique experience that matches their needs. That's personalization. By tailoring your services to each client, you make them feel special. This can mean customizing what you offer, giving personalized suggestions, or providing exclusive perks based on their preferences. When they feel understood, they're more likely to spend more and stick around.


Smart Pricing Strategies:

How you price your services matters. Try offering different levels of service at different prices. This way, clients can choose what fits their needs and budget. Another trick is to introduce extras or premium features they can pay a bit more for. This raises your average sale value and lets clients tailor their own experience.


Keep Tabs on Your Average Sale Value:

To really make your average sale value soar, you've got to keep an eye on it. Regularly track and analyze this number. By watching how it changes over time, you can spot trends and understand what your clients like. Tools like analytics and client management systems are your allies here. Study what makes your average sale value go up—like better upselling, pricing strategies, or how satisfied your clients are. Constantly fine-tune your approach to unlock your service firm's full potential.


In Conclusion:

Let's break down the actions you can take from this article to implement these ideas and boost your business's success:

Know Your Numbers: Start by understanding your current numbers. Calculate your average sale value by dividing your total earnings by the number of transactions. Know how many clients you have, their average spending, and how often they buy from you. This knowledge is your foundation for growth.


Focus on 10% Improvements: Work on enhancing three key areas by 10% each—clients, average sale value, and transaction frequency. Small improvements in these areas can lead to significant overall revenue growth. Break it down into manageable steps to achieve remarkable results.


Upselling and Cross-Selling: Implement upselling and cross-selling techniques. Upselling means offering clients an upgraded version of what they're buying, showing them the extra value they'll get. Cross-selling involves suggesting related items to go along with their purchase. These techniques can increase your average sale value and enhance the client experience.


Bundle Services or Create Packages: Consider bundling multiple services into one package deal. Clients love value-packed offers. Offering discounts or extra services within these bundles can encourage clients to spend more and increase your average sale value.


Focus on Client Happiness: Happy clients tend to spend more and stay loyal. Prioritize exceptional service, quick problem-solving, and going the extra mile. Building strong relationships based on trust leads to increased spending and repeat business.


Personalization Matters: Offer a personalized experience for each client. Tailor your services to their specific needs and preferences. This can involve customized offerings, personalized recommendations, or exclusive perks. Clients who feel understood are more likely to spend more and stay loyal.


Smart Pricing Strategies: Experiment with different pricing strategies. Offer various service levels at different prices, allowing clients to choose what suits their needs and budget. Introduce premium features or extras that clients can pay a bit more for, raising your average sale value.


Track and Analyze: Regularly monitor your average sale value. Use analytics and client management systems to track changes over time. Identify trends and what's driving value increase—like improved upselling or better client satisfaction. Continuously refine your approach for better results.


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