The most important number there is in a company is the revenue number. Call it sales. The 12 points below will trigger a change in the way you think about selling.
Find out with what your product is consumed. The best example is toothpaste. If you are in the toothpaste business, make sure that the toothbrush manufacturers make longer toothbrushes. We all have the tendency to cover the full toothbrush with toothpaste. Ask your dentist, she will tell you that half that amount will do the job too.
Have your product already packed with a good selling product. You could make packages of tooth brush and tooth paste together. If you buy a new phone, some apps are preinstalled already: I found Evernote and Box on my new Blackberry Z10. I probably would never have downloaded these apps.
Raise the price
Sounds counterintuitive not? Ask yourself how much is your product of the total price of your client’s end product. If it is less than one percent, raise the price. As an example if you make injectors for diesel engines for ships, find out what the cost price is to manufacturer that engine. Will my price increase affect the client’s gross margin or the end price? Now how to raise the price in front of your client? Come with an improved version at a slightly higher rate and announce that the current product will be discontinued.
Sell modules, the Lego model
Young or new tech entrepreneurs tend to build a product with all the features in it. That is their passion. They then discover that it is difficult to sell. Make a minimal viable product at a competitive price and up sell the features later. Once a client has chosen your solution and they are happy, up selling becomes easy. In extreme cases, you give away the product and make the money on the up selling. This is done with consumables that are being up sold in the medtech equipment sector. Give away the machine and sell consumables at a high gross margin.
The classic model well known is: Book, bill and ship, get paid. What about a usage fee? A monthly fee? Offer something variable that makes your invoices a variable cost for your client. You do not buy Rolls Royce jet engines. You pay Rolls Royce for the minutes these engines run. An aircraft that is not used for a week is not generating revenues, nor is there any cost for the engines. Compare it with a pay per click.
The Decoy Effect
Change the perception of value, offer three products:
Product A, with 5 features: 50 Euros,
Product B, with 7 features: 60 Euros,
Product C, with 9 features: 95 Euros.
Make sure you have enough Product B in stock. By adding a far more expensive product with a marginal increase in features the product just below is perceived as a good offer. Remember that changes in perception drive us.
Discount is not lowering price
Supermarkets use this. Discount, give 40% off. Now if you would lower the price by 40% the effect is less. I once analyzed at Chicago Booth two years of supermarket sales data of hygienic paper products and the highest jump in sales was always when a discount was given. Discounts are perceived as time limited, lowering prices is seen as desperately trying to sell.
Make sure your product is well positioned. Here is the idea: you cannot be a solution to everybody. In sales you cannot have the best price for everybody. Once the price is set, there are always customers that would have paid more. Launch a high end brand, sometimes a better looking packaging is enough already.
For retail it is important to have the expensive products close to the short walkers, the fast clients, i.e. walking in and quickly walking to check out. I recently walked into a garden center to buy pot earth and I was shocked by the price of bags of eearth that were very close to checkout. I spent some time investigating and a 60% cheaper product was stored outside. For your e-commerce you can “bury” the cheaper products or services deeper im your web.
Find other applications
Very obvious but often overlooked. Let me give a simple example. If you make refrigerator trucks to transport fish, you might want to consider the meat sector too. Have a good thought about what you do. Then ask where can you sell your product or solution too with or without adapting your product?
Sell first, then build product
Not that obvious. My experience in telecoms is that our software product was build after it was sold to an operator under the condition that they would help to design it. The result was that other telecom operators immediately recognized the product as the solution to their daily problems. The competition had developped their product in house and failed to meet the real operational needs. Result was an incredible increase in sales. Check what David Burkus writes about in Harvard Business Review. Try to come to a similar arrangement with one of your clients.
Up sell via post sales services
If you provide a customer service, train the phone operators to ask the right questions. If a customer service operator has solved a problem for a client a so called “sweet moment” exists. That is exactly the moment you can try to see if there is a possibility to sell an additional product or service. Insurance companies are good at that, once they solve a problema, like when you had a car accident, they will ask if you have more cars in your family. If the answer is yes, this leadis immediately forwarded to the sales department.
Try to see what you can apply to your business to increase your sales.