Recession-Proof Your Business! How To Get A Higher Average Sale
As I outlined previously, there are four core functions to growing a business strategically: get more new business, get a higher ticket average, get more repeat business, and generate more referrals. In this article we will cover core function #2; getting a higher ticket or sale average.
2.HIGHER Average Sale.
What is your average invoice? (Monthly total $ divided by # jobs) How can you increase this average?
STAPLE STRATEGIES: Raise Your Price, Package Pricing, Pre-confirmation Letter, Client Folder, Multiple Services. If it's been a year since you've raised prices, are you out of your mind? Just with gas prices alone, you should have raised your rates at least 10%, and ideally 20% (we're talking pennies here, so don't get scared).
The biggest error that we see with especially the newer members is that they price by what they think the right price is. They pull a number out of the air, based on what they think sounds fine. Honestly, if you were to calculate what it truly costs you to do your job; fuel, supplies, insurance, workers comp, wages, taxes; you would likely be surprised to know that you are not keeping much in your pocket after a job.
Most look at the gross numbers; what the check says. You need to know what your NET is if you are going to be priced for success. If you do that we'll guarantee you that you'll raise your prices; especially if you discover that you are charging less than it costs you to do a job (which we've seen happen). Don't confuse cash flow with profits.(A good basics book on understanding financials is "How To Read A Financial Report: Wringing Vital Signs Out Of The Numbers" by John Tracy. It's a quick read and if this is an area you've always felt is a big weakness of yours, then you'll definitely benefit from this book. Jump on Amazon, it's cheap.)
If you're still worried about raising prices, then do so with your Package Pricing (which you absolutely need to implement if you want to boost sales conversion). If you do not do package pricing, then take your current price and make it your new "basic" or "budget"package. Then offer a middle (Deluxe) and a higher (Always Clean) package. You will discover that your market will gravitate to the middle price, and quite a few top packages too. People like choices, so give them what they want.
In this and in the future I reference the carpet cleaning business. These strategies and principles will work for any service business with just a little modification. To find out more information on the these strategies please visit us at the link in the about the author section. Tune in next time, when we will discuss core function 3; getting more repeat business.
Joe Polish is founder & President of Piranha Marketing, Inc. Considered one of the most effective direct-response marketing experts in the world. To discover more ways to recession-proof your business and create an ELF Business (Easy, Lucrative and Fun) visit http://www.4ElfBiz.com
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