Relevance and the Spur of the Moment Add-on Purchase

by TedV

In most cases there are profit opportunities you can add to any purchase a customer makes. You can enhance this success and even create new add-on possibilities using Relevance Marketing.

B-2-C Add-on Purchases

I picked up an amazing fact at the NARMS Conference a couple of weeks ago:

20% of Grocery Store Purchases are Responses to Displays, Point-of-Purchase Signage, etc.

Granted, a great deal of those display offers have some sort of significant discount involved, but a substantial minority of those racks or signs feature exciting new products with little or no discounting.

I recently took a number of photos for a client’s website. They are merchandisers and a crew was setting up a complex candy end-of-the-aisle full height rack. This manufacturer’s display was very expensive and quite attention grabbing, but there were no discounts – just an attractive presentation of delicious confections. Customers were grabbing candy off of it while it was being setup, even though the same candies were available on existing shelves two to ten feet away.

Similarly, is there any doubt in your mind that when you super-size your meal at a fast food place you probably increased by 50% at least the restaurant’s profit on your purchase, if not double it?

The Relevance of the Moment – In each of these examples the buyer relates to the additional purchase offer immediately. It’s a modern proverb that you should never grocery shop when you’re hungry. However, you always go to a restaurant when you’re hungry.

If a sit down restaurant could figure out how to show the dessert tray before ordering instead of after eaters have stuffed themselves, they would sell a heck of a lot more very profitable sweet stuff. The fast food restaurant has the opportunity to say, “Would you like an apple pie with that,” when the orderers are at their hungriest – after they’ve been standing for a minute or two smelling the aromas of the establishment.

Relevant Add-ons and Online Ordering

Have you ever ordered a camera, cell phone, video recorder, or any significantly priced electronic device online or by phone?

If you have you are always asked about additional batteries, memory cards, carrying case, a tripod, etc. In very competitive categories there is more profit in those items than in the major purchase.

The Services Sale and Relevant Add-ons

There is a remodeling company I know of that also performs a number of specialized cleaning services. When they get a contract to remodel a part of a store, as a thank you for the business they look for a simple yet highly visible cleaning service to perform for free. If this cleaning is obvious enough, they usually get the contract to perform the maintenance on a regular basis.

Conversely, going into clean on a regular basis allows them to perform a simple repair for free. They then point it out to the owner and ask about a more complex repair they’ve discovered.

Website producers always try to add to the site contract – SEO services, content creating, and any number of additional capabilities – many of them with the potential to produce ongoing monthly revenue. I know of several companies that sell Content Management Systems (CMS). They nearly make as much money in creative web design, IT support, web hosting, and other services tangential to their CMS products.

I’ve had clients hire me to develop their sales processes and ended up helping redesign the message of their website. I’ve been commissioned to develop the message and content of a company’s website and ended up helping them revamp their sales and marketing.

Relevant Add-on Sales and Capital Equipment

The first time I ever heard the phrase “capital equipment” it was spoken by my first sales mentor, Robert Daughtridge. He helped me in my first sales job, selling industrial supplies to manufacturers in rural eastern North Carolina. Industrial supplies are consumable products factories use such as drill bits, bearings, sanding belts, saw blades, gaskets, hand tools, vee-belts, grinding wheels, and over 50,000 other similar items factories use everyday.

This company also sold machine tools – these are huge lathes, screw machines, milling machines, boring machines, etc. In 1978 the least expensive of these items sold in the low $20k and price tags went up steeply from there.

It was a competitive market and percentages of profit were much lower than the average compared to the rest of the items we sold, but the individual ticket for one of these machines was a major boost to sales. At that time $25,000.00 was a pretty good month for a rep in that industry. Of course Robert averaged nearly 3 times higher than that in monthly sales, which was why I asked him for help and not the other guys.

Robert quickly pointed out that the important thing with machine tool sales was the sales add-ons – both one time and ongoing. Robert would make almost as much gross profit on collet sets, work tables, and other support paraphernalia as he did the lathe or milling machine.

However, he would give them a filled tool case just for that machine tool. This case included the specific consumable cutting devices that particular machine tool used, such as drills, carbide bits, mills, borers, etc. A number of these cutting edges might be specific to the individual machine, so it made sense to have those unique items and everything else it used right there for easy access.

This gave Robert the list of everything that would be used by the equipment, and made him the vendor entered into the purchasing system for each of these consumable items.

For 23 years Robert had been giving this fully stocked tool case to every customer who bought a machine tool from him. At that point he calculated that he averaged around $700.00 in commission a month from that program alone. The average monthly commissions for such a rep at in 1978 was between $1000.00 and $1200.00.

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Hopefully you use Relevance Marketing to help your prospects identify with your products and/or services and see themselves succeeding by going with you. Once there, do not leave money on the table – use Relevance Marketing to make additional items attractive to your future clients.

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