Posted on: Monday, September 3, 2001

60 Seconds on Business
Try cross-selling to improve profits

By Dr. Drake Beil
President, Solutions Inc.

For the quickest positive impact on your profits, focus on cross-selling by increasing the number of items per transaction through incentives and short-term bonuses. One more item per sale is worth a lot. They're already in the game. You have no additional marketing or sales costs. The extra few bucks per customer are mostly profit.

Items per transaction: It's one of my favorite indicators of customer value. For example, with retailers, if someone comes into your store and buys only one thing, like a shirt, you should shoot your salesperson.

Try bundling. Every business has bundling or packaging opportunities, and the key is adding products and services on to a likely initial purchase. Make it a better deal if they buy more than one thing, and you can do that by improved servicing.

For example, if a guy needs a shirt, he can use the pants that match, the belt and maybe shoes and socks too, Guys are lazy and if you can bundle it for them and it looks good, they'll buy.

It costs nothing to ask. Customers will be happy you asked, even if they don't buy more. And you'll be happier you asked, when they do.

Now, once you have the business, another great strategy is selling the customer into a better value. Car rental companies are good examples of how this should work. There's nothing sadder than a Lincoln sitting on the lot as the renter drives off in the cheapest car in the fleet. That's not good yield management.

Remember, yield improvement is good, having no yield program is bad and having a bad program is worse than not having one at all.

Reach Dr. Drake Beil at drake@60secondsonbusiness.