Average Dollar Sale is a simple metric to measure how much you earn from your customers. It’s also known as “average transaction value.”
Average Dollar Sale (ADS) is calculated by taking the gross sales divided by the number of paying customers over a certain time period.
There are various strategies that a business owner can use to increase ADS to get a higher profit, without needing much more time or effort. Watch this video to get three effective strategies to increase Average Dollar Sale.
So we talked about a third element which is conversions.
Now we move on to the fourth element, which is the Average Dollar Sale, okay? Which is the amount you sell in your transaction, okay?
First of all, first strategy. I’m going to give you three strategies for each of these.
It’s just to increase the prices, right? Which is fairly straightforward.
Second thing is to value stack.
And third thing is to upsell additional offers.
So let’s get into each one in a little bit more detail here. Okay.
So first – increase your prices. Okay, so I think for most of us, increasing prices is once again, specially if you’re on the services space it’s a lot to do with our mindset, okay, I believe and our confidence. Okay. So I think you know, it’s that’s the first thing you need to overcome, you know.
It’s like oh if I increase my price then you know, everybody else. I’ll lose out on customers. Stuff like that. Okay, so it’s not necessarily so. A lot of times it’s due to our own personal confidence.
Then the second thing is to create uniqueness, okay? So let me give you an example that hopefully will trigger some ideas for you.
Okay, so this is a beanie, right? People wear beanies to what? To do what? Warm their heads up, okay. So that’s a very, very simple product, which is highly available anywhere, right?
But what if you could create a unique beanie, right?
So okay. That’s a unique beanie. It’s not something different, right? And yeah, so that’s one way to do it.
What about a beanie with a light on the head? Okay. So that’s pretty cool too, because that’s kind of unique as well, right? So, yeah. So you could wear a beanie, keep warm. And I remember going fishing in Australia at night and it’s freezing cold and your head’s like just freezing. This would be pretty handy, right?
Having that beanie on our head and having that light, then I can, you know, do my hook my bait and all that kind of stuff. Yeah. So this would be pretty cool as well, right? And pretty unique.
And how about for the ladies, right? What if you could have a beanie like that, where, you know, they could their hair could pop out with a hole in the top, right? So, the hair is not all scrunched up and looking funny when they take it off, right? So that’s another way unique beanie as well, right?
So you know, I want you to kind of think of ways to tweak your product/service slightly so that you can be unique in the marketplace, which in a meaningful way so that people are willing to pay you more. Okay? So that’s another way to do it. Okay.
All right, so next one is the value stack which is very often used by coaches all around the world especially when they’re selling stuff. And if you’ve been to any webinar before by, you know, coaches that are pitching you stuff. Well, then the value stack is invaluable, right?
But it can apply to products as well, right? So here, the overlying question, the question to ask is, you know, what are you selling? Are you selling a product? Or are you selling a solution to a pain that people have right now?
So the key is don’t sell a product. Sell a solution. So package up your basic products, okay? So that it’s not a commodity, right?
And we did this in my previous business as well, with book publishing, right? At first we were just offering book printing. Then we thought well, you know, why not let’s level up, okay.
So the next thing we did was we did typesetting, cover design and book printing, okay? So then we could charge more. Then, next thing we did was we did marketing services. We did various publicity services. We did a service to get books into bookstores. All that stuff and you know, our total package value, you know, for some of the packages went up to $10,000, right?
From say, book printing, which could net us say, maybe okay, if we did a hundred books we might make $800, $1,000 to doing typesetting and cover design and book printing, which would maybe get us about $1,500, $2,000 to doing all that packaging with all these services to provide a real solution that helped us to sell a $10,000 product, okay?
So that is what we call value stacking, right? So think about how you can package up your basic product with other complementary services or complementary products.
So for products, just want to show you a slide that I shared many times before. And this is like selling an electronic board, right?
People can sell the electronic board for like $10. And the thing is 10,000 other people are selling the same old electronic board on Amazon, on Shopee, all these places. So, no point of difference.
Someone sells it for $9.95. Everybody goes and buys the $9.95 one and you lose all your customers. Then you have to price yours at $9.90 and so on, right?
So the new way is where you can have a product bundle is you have the electronic board. You have parts. You have ebooks. You have video training. You have items. You know, wires, all this kind of stuff and create a whole product bundle where the total value could be $79 or $80, right? And you could sell this product bundle for like $30 and straight away, your average order value goes from $10 to $30. 3x straight away, right?
We talked about earlier about how you can increase your business, how you can increase each area of your business, which is partly this increase your average dollar sale by 50% and you can 7x your business, right? So this for example, you’re instantly 3x-ing your business, right? So yeah, think about it. How can you You know, value stack your existing product, okay? And that will make a huge difference to your business, okay?
And it’s easy as well. It’s easier than using paid traffic. It’s easier than doing sales, right? So when you have a good product like this bundle your products, you can actually increase your average dollar sale and while we’re at it, I’m just going to give you another level of it, okay?
And that other level is that Say you have 100 customers that buy this $30 product, okay? Out of that, there is always what I call the the elite segment of that hundred customers that buy from you. So this elite customers are going to buy whatever you throw at them, okay?
So for example, you know here you might have a $30 product but if you actually had a course, for example to actually help them to build, you know, whatever robots or whatever, right? For like RM2,000 or RM3,000, they will still buy that.
Okay, so if you don’t have like a high-value offer in your product range currently think about how to create that high-value offer because there will be that like 3% or so of people that will buy everything that you sell, okay and if you don’t sell to them, you’re missing out.
You’re only selling $30 worth of product to them, instead of selling maybe you know, $500, $1,000 worth of product to them, right? So, have a think about that too.
And that’s, you know, in my previous business, that’s why we created that $10,000 product as well. And, you know, not everyone bought that $10,000 product obviously, most would go for, actually, the middle of the range one, which was about $4,000, if I don’t recall wrongly.
The bottom of the range was like $2,000. Then we have $4,000. Then we had the $10,000 product, but you know, around 5% of them actually went for the most expensive product, right? So, instead of buying the $4,000 product, they now bought the $10,000 product, right?
So, have a think, what kind of high ticket offer you can create in your business right now because that could be a game changer for you, okay?
How about online services? Any idea how to stack up?
Yeah, I mean if you’re launching a new payment gateway service. Yeah. I mean, you have to think about what is, what solution is your customer looking for, right?
So if you’re launching a payment gateway service, what do you think your higher end, like e-commerce customers are most likely to want, right? What is their pain right now? What are the things they keep complaining about the current payment gateways right now?
Is there a service that you can also provide in addition to that? Like security wise or, you know, one-click selling or something that is like, you know, or recurring billing or, you know, invoicing.
Whatever it is, you need to find out what is the main pain of your customer right now, Ikbal. And then you know, go and work on it and, you know, talk to customers say Hey, if I created this service, do you think you’d be willing to pay an extra $500 for every month or something you know.
So just try and do some market research as well, right. One of the things is… don’t just come up with it and then launch it but, you know, get some customer feedback as well, right?
Okay, upsell additional offers. Okay, so the other thing is to upsell, right? And it’s the classic “Do you want fries with that?” kind of approach that McDonald’s invented. So you could first of all, sell more of the same product, right?
Of course you can sell related products as well. So yeah, instead of one Big Mac, you do two Big Macs, sell related products, fries and coke, and so on. Okay. Extended warranties, insurance, etc. Okay. So those are the things you can look at selling as well, okay?