Recently Franziska and I took a flight departing LA and as we went through the self check-in process at the airport we got offered to pay extras about five times: seat upgrade with more leg room, priority boarding, special insurance, extra baggage allowance, carbon emission offset…
A Jetstar employee in Australia told me that Jetstar makes most of its money on the additional baggage costs charged to passengers, so no wonder American Airlines is offering you so many additional extras to purchase. I mean, flight tickets really are cheap nowadays!
We‘re all familiar with the phrase “would you like fries with that?” and we know that there‘s a reason for this line. If you‘re going to make a sale why not offer a little extra to increase the sale.
The supermarkets are getting smarter too! I went to a supermarket in France to buy a bottle of water and ended up leaving the ‘hyper marche’ with 6 big bottles instead of one, why? Because I could buy 6 for the price of 4. I don‘t really like going to the supermarket, so I‘m happy to stock up, but I would not have bought 6 at once. I wasn’t that thirsty. So by offing this special rate and providing the extra value (6 bottles for the price of 4) they made money that might have gone elsewhere (maybe on beer instead).
France
When presented with a great offer, humans almost can’t resist. When you look a little closer at what happened in the supermarket the only thing that told me that 6 bottles for the price of 4 was a good deal was the original price set by the people selling it.
It makes more sense for the water company to sell 6 bottles at a time for obvious reasons – greater sales, so even if they wanted to sell each bottle for 65 cents they could put a $1 price tag on individual bottles and a $4 price tag on a pack of 6, therefore creating higher perceived value for the pack of 6 while still making their 65 cents per bottle.
A common question small business owners ask is “should or shouldn‘t I discount?”
Depending on your industry there‘s a few different ways to look at it, but a general rule is
“No, you shouldn‘t discount”, look for ways to offer extra value (add bonuses) to a sale and charge a lower rate for the upsell.
There can be a drop in the perception of your product if you discount your product alone, so the key is to follow the lead of the airlines and Ronald McDonald ☺. To increase your revenue think about what you can offer as an upsell, this way you don‘t have to discount, you make the money on your sale and you also get the upsell.
The addition of a small upsell can be the difference between a battling business and a profitable business.
Brainstorm ideas for an upsell and make offering it a part of your sales process, your business will love you for it…