How do you increase your profits? Remember the pie.
I was annoyed. It had to do with a slice of lemon meringue pie, and a huge loss of profit potential. And then I thought of you.
You see, at the core of my annoyance was a simple business lesson that could help make a significant jump in your monthly bottom line. The good news is that this is a lesson that doesn’t cost any extra money to implement, and you don’t need to add a large number of new customers in order to see results.
Let me start at the beginning.
Last Friday, my wife and I went out for dinner at a local restaurant which specializes in pies. When you walk in, you pass a large refrigerated display case full of pies. They have them all; fruit pies, cream pies, and seasonal pies.
We finished our food and I was ready. I was eagerly anticipating the waitress’ next question. I had my answer ready. She walked up to our table. We made eye contact. I smiled expectantly. Then she said, “Here’s your check,” and walked away.
WHAT??? No pie? She didn’t even ask?
In about 5 seconds I went through a wide range of emotions. Loss. Anger. Disbelief.
Then I realized something that was even more dismaying than not having dessert. With every customer that waitress served, the restaurant owners were leaving money on the table.
This waitress was in fact undermining a fundamental law of the marketing universe.
“The last dollars you make on a transaction are almost always more profitable than the first dollars.”
Put that on a sticky note and place it on the frame of your computer monitor.
There are a number of costs associated with just getting the customer in front of you. If you total up all of your operating costs, labor costs, and the cost of delivering your product or service, you have to make a certain amount of money just to break even.
That’s why increasing the amount each customer buys not only increases your sales volume, it can also increase your overall profits. And, since you have already paid your fixed costs, those added dollars can be the most profitable.
I have seen a 10% increase in overall sales more than double the company’s bottom line profits because this increase came after the costs of doing business were paid.
Let’s go back to the pie. Slices of pie are some of the highest margin items on a restaurant menu. Add dessert to the meal and you can create a nice bump in the overall profits.
What if you’re not in the restaurant business? The same principle applies. Simply look for ways to expand the amount of your average sale to increase your overall profitability.
Concerned that you might scare off your customers with the extra selling? You may find that the opposite is true. I wanted a slice of pie. I left disappointed because I wasn’t even asked.
Part of providing an exceptional customer experience is anticipating the customer’s needs. Offering them related products or services can enhance their experience tremendously
There are almost always additional related products/services that enhance the product or service your customer is currently buying. Look for ways to offer these in your business.
The local car wash offers the basic wash. They also let you add waxes, sealers, tire dressings, and fragrances. (Just because your car isn’t brand-new doesn’t mean it can’t smell as though it is.)
Many smart dentists have learned that by adding services such as teeth whitening and cosmetic dentistry, they don’t just handle dental health, they can improve their patient’s self-image.
One of my favorite musical theater companies enhances their live theater experience with special tea and cookie sessions where children can meet some of the characters they just saw on stage. Who wouldn’t want to have cookies and get their picture taken with Peter Pan and Captain Hook?
Of course these “limited” tickets are an upsell to the performance ticket price. It’s no wonder, however, that these added “teas” usually sell out.
You can do similar things too. Look for the slice of pie in your business. Then start offering it to customers and watch your profitability rise.
To your business success,
Sentium helps clients get more clients, more sales, more often. Are you ready to make a positive impact with your business? Call to set-up a no-obligation telephone consultation. It will cost you zero, zip, zilch, nada, but could give you answers that can dramatically boost your sales results.
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Richard Wilson is the Founder/Chief Marketing Strategist for Sentium Strategic Communications which helps companies craft the right message for extraordinary results. Over the past 31 years, his clients have ranged from start-ups to major technology companies.
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