5 Ways You Can Increase Client Spend

Looking to improve your profitability? Entrepreneur and author Kelly Clifford shares his advice on how to get your customers paying more

5 Ways You Can Increase Client Spend

Every product or service a business provides has a price associated with it, which represents what must be paid by a client to buy a product or benefit from a specific service. The price represents the sale value for that item. However, if a client buys more than one thing at the same time, then the sale value for that particular transaction is the sum total of all items purchased at that point.

Below are my five key increasing client spend strategies:

Strategy 1: Increase your prices

This might seem a bit obvious so is easily overlooked, but by raising your prices you increase your average sale value. Clients will be paying you more for the same products or services every time they buy from you.

This isn’t always an easy thing to do in reality and there may be market forces at play that prevent you from doing it, especially if you operate within a competitive marketplace. This is beneficial to your business provided the rise in prices, and resultant revenue, isn’t offset by a reduction in transactions occurring.

Strategy 2: Up-sell

This involves suggesting a product or service that is one bracket higher than the one under consideration. Selling a higher-priced product or service means a higher sale value.

To up-sell effectively, you need to do three things:

1. It’s important to approach the up-sell not from the perspective of boosting revenues, but rather from the perspective of finding more ways to better serve your client. In other words, your job is to find additional ways to add real value for your client. In this way your clients and prospects will feel your sincerity.

2. You must thoughtfully probe the clients for more opportunities to serve. Put their needs first.

3. Script your delivery so that

A) The benefits of your offer are clear.
B) There is relevance to the client or prospect.
C) There is a reason to act now.

Strategy 3: Stop discounting

Think about what discounting is. It is where you reduce or lower the amount you are charging for a product or service. If you stop doing it, then the amount of revenue you receive is higher.

However, discounting can not only damage your profitability, but it can also lower your value in the eyes of the client. It is time to stop any discounting that you may do and embrace the world of premium value.

Strategy 4: Propose three options

You are not a mind reader, so stop assuming you know exactly what your potential client wants from you. After you have fully discussed and understood a potential client’s challenges, present solutions at three different levels. For example, this could mean offering Silver, Gold and Platinum options.

It turns out that the human brain is wired for good/better/best pricing options. We like choices and options. However, ‘option overload’ paralyses us so keep the options down to a manageable number.

Here’s a common objection to this strategy: Research shows about two out of three buyers choose the mid-price product or service. So why not just offer that most popular option? Simple – a premium product or service establishes your credibility. It shows you recognise and offer top quality, creating a halo effect for your other products and services.

The lowest-end solution should be the cheapest solution that will still solve the clients’ challenges. The highest-end solution should be well above your clients’ stated budget but include every possible bell and whistle to solve the client’s challenges and more. The middle option solution should be somewhere in between.

By offering three options, you are not only creating choice, which potential clients love, but you are also giving them the opportunity to select the highest-level option. If you have focused on value throughout the sales conversation, at least 20% of your prospects will likely choose the top option.

Strategy 5: Educate on value, not price

Avoid having to compete on price wherever possible, as this usually ends up with you having to discount or lower prices, which is the complete opposite to the objective of this exercise – to increase average sale value.

Help your clients to understand why they should buy from you and not another business, and explain the reasons why the price of an item represents real value to them.

Once you have learned your prospect’s most critical needs, problems and challenges, it is time to understand the value of solving those challenges. Remember, the value of what you offer is directly proportional to the value of the challenges you are solving for your client.

For example, if your potential client’s challenges are costing them £500,000 in lost revenue, and your solution can help solve those challenges, then the ‘value’ of your solution to them is £500,000. Therefore, when your solution costs £50,000, it is a no-brainer for them and represents a significant return on their investment in you.

An adapted extract from The Profitable Professional by Kelly Clifford, founder of Profit in Focus.

1 Comment

  1. […] Clifford was featured in Real Business, First Women, Professional Adviser, Impact Hub, is4profit, Small Business Heroes and Just […]

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