honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Wednesday, October 15, 2003

If you sell an item, why not extras?

By Barry Flynn
The Orlando Sentinel

Want fries with that? That question may not be the oldest trick in the book, but it's close and it illustrates an important marketing principle: Sell everything you can to the customer who's buying.

Which would you rather do: Make a single sale of $1 million or 1 million sales worth a buck each? Even if it takes a very long time, the single $1 million deal is going to be quicker and almost certainly much more profitable than the huge number of sales at $1 each.

That's why virtually everything costs less per unit when it is sold in bulk than when sold individually.

While most businesses don't have the luxury of choosing between the two extremes, the goal makes sense for virtually all of them: Make the most of every selling opportunity.

If you increase the average size of your sales, you will fatten your bottom line, even without adding a single customer.

The principle is closely related to what has become a marketing cliche — that it's easier and cheaper to retain your customers than to attract new ones.

"You can sell more to them more cheaply," Richard Lutz, a professor of marketing at the University of Florida, said of regular customers.

That does not mean that you ever give up trying to find new customers, Lutz said. It's just that research has shown it usually costs less to expand sales to existing customers than to find and sell to new ones, he said.

This is particularly so for small businesses, Lutz said, because they usually lack economies of scale. Because their costs are not as low on a per-unit basis as the costs of bigger competitors, "you have to emphasize customer care," he said.

Fast-food restaurants, even if they are low-cost producers, use the french fries question because they are seeking to maximize every sale, to extract as much money as possible from the finite number of people who drive up each day.

Something as simple as asking the question is enormously productive. Would you like dessert? Coffee? Better yet, when a restaurant has its servers bring around a dessert tray to show what's available, that's ratcheting the marketing up another notch.

Or take the case of Certified Slings Inc., which is in the hoist-and-lift business. When Ron Worswick bought it in 1976, the company was essentially a one-product business selling wire rope and cable assemblies.

But Worswick could see that he already had his foot in the door at a lot of companies eager to buy lots of other things. So he started selling what purchasing managers were asking for.

"Now we've got a 200-page catalog," he said.

Certified Slings sells everything from safety equipment such as hardhats and safety harnesses to the forks used on forklifts.

The company, which had seven employees and rang up about $400,000 a year in sales when he took over, now has about 110 people in six locations across Florida and will do more than $20 million in sales this year, Worswick said.