There are three ways to grow sales – online and offline both. Only three. However, most companies focus only on one – and are missing out on revenue opportunities.

So what are these 3 ways to increase online sales?

  • increase the number of customers,
  • increase the average order size,
  • increase the number of repeat purchases.

#1: Increase the number of customers

This is what most businesses do and try to get better at.

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You do this by solving a real problem, being remarkable, driving relevant traffic (free and paid), boosting conversions, using referral programs and so on. It’s the most expensive part of increasing sales.

Since this is what I mostly write about on this blog, I’ll move on to the next 2 ways to increase online sales.

#2: Increase the average order size

They say the most profitable question of all times is “Would you like fries with that?” you hear at McDonald’s. And that captures the essence of this point.

When you get people to that stage when they’re ready to buy from you – you can ask them to buy more things, and there’s much less friction. The reason being that getting customers to that buying point is the hardest part of the sales process. They need to trust you and believe in the value they’re getting, they need to convince themselves they need or want it, and that that’s the right thing to buy at this moment.

Once they’ve reached that step and made a conscious decision to give you money – they’re also giving you their trust. So in that moment you are able to sell them more.

Upsell a product that cost ~60% less

Question: When somebody buys a shirt, should you upsell them a tie, or the whole suit?

The right answer is “tie” – it’s (usually) cheaper and hence seems like a small thing to add. If you’d try to upsell something more expensive, you’d counter the same kind of friction as you did with the initial product (doesn’t mean it can’t work, it’s just harder).

The time-tested 60×60 rule says that your customers will buy an upsell 60 percent of the time for up to 60% of the original purchase price. Any upsell you offer must be congruent with the original purchase. This means that when they buy shoes, you offer to buy shoe care products, not a key chain.

Ever registered a domain name through GoDaddy? Let’s see how many things they’ll try to upsell you:

Here’s the list:

  1. different extensions (.net, .info etc),
  2. domains you searched previously,
  3. “variations you might consider”,
  4. premium domains,
  5. country/region specific domains,
  6. “add 5 more domains and get bulk pricing”
  7. popup banner with “get 3″ or “get 5″ additional extentsions for a deal,
  8. email plan.

Yes, that’s 8 attempts to upsell you! I agree that GoDaddy is excessive, but it’s been working for them. You should at least try to upsell 1 thing.

Quantity discount

Buy more, save more!

Vistaprint does this:

Offer an upgrade

Remind people that for just a little more $$$ they can get a fancier product.

Most people won’t need more than 16 GB in their iPad, but “just in case” and “it’s just $100 more” will help them make more money.

 

Bundling

Offering something to go with the initial product for a special price is a great way of increasing the average order size.

Amazon frequently recommends you get a bundle:

Notice how in addition to offering the bundle, they’re also pitching Amazon credit card (upsell!).

I throw marketing seminars each time I go to Europe – and whenever I offer an online marketing course to go with the seminar fee (for some extra $$$ – but a very good deal), around half the people take the offer. Bundling ftw!

Complementary product

“Do you need batteries?” Sometimes you can get the extra sale by reminding them of a new need they will have because of buying the product they have already decided on.  This can be an easy sale because it is rational, “makes sense.”

This is how the Phoenix Pendant does it, on the page that appears after the customer has clicked the buy button:

One interesting thing they do here is tell you not to buy it if you don’t need it.  This can reduce friction – if a customer is expecting to go straight to checkout and then they get smacked with an upsell suggestion, it’s nice to word it in a way that makes them feel under less pressure and more in control.  The people at the Phoenix Pendant tell me that 60% of customers take the upsell.

Longer commitment

Charge monthly? Get them to sign up for a longer time period. GetResponse lures with a 18% annual discount:

Extended warranty

If you’ve ever bought a gadget, you’ve been probably offer an extended warranty for a price. Even though statistically speaking it’s a bad deal for the buyer, it provides peace of mind.

Amazon example:

Add-on services

Ever go to Chipotle? You can get a good burrito for a decent price, but they offer to add tasty guacamole (right in front of your eyes) for $1.80 more.

Get customers to add small things to their order for a small fee. They might just add up if you know what I mean.

Here’s how PSD2HTML does it:

Expedited delivery

If you sell physical products or do custom work (be it software development or engraving jewelry), you can get people to pay more for faster service.

HP ships your purchases faster if you pony up additional $39:

#3: Increase the number of repeat purchases

It’s much easier to sell to an existing customer than to get a new one. You’re spending a ton to acquire them – it’s much cheaper to keep them than to go off finding new ones all the time.

You don’t want to keep all of them – just the profitable ones. So you need to be able to identify which ones are costing you, and which ones are bringing you bacon. (Some you might want to offload because of the emotional cost of servicing them, i.e. difficult customers that you spend a lot of support hours on).

Here are some ways to keep the existing customer buying:

Offering promotions and reminding customers of what you offer 

Send targeted follow-up emails to customers offering them a related product or service (you can do this automatically with a good email autoresponder and shopping cart). Notifying them of deals is also great.

Wine Library is constantly sending me wine offers over emails (’cause I’ve bought before). Every now and then I’ll take it:

Companies do this with email marketing, but also all social media (Facebook, Twitter, etc.) – get customers to follow you on one of these and offer special deals for just the followers.

Here’s an example from Modcloth Facebook page:

Free shiping for a year (locking customers in)

Do you use Amazon Prime? It’s when you pay a fee to get free 2-day shipping for a year (+ some other benefits). Free 2-day delivery is nice, and so are free streaming movies. Appearently more people used the 2-day shipping now than their free Super Saver Shipping. People like it.

However, by giving you this deal they’re essentially locking you in. Why buy from anyone else if Amazon ships it for free (get it in 2 days)?

Wine.com does the same thing:

If your customers buy frequently the kind of products you sell, come up with an incentive to keep buying only from you.

Offer coupons with the order

Do you know what’s the open rate of transactional emails? Three times higher than commercial email!

According to Experian’s Transactional Email Benchmark Report

  • The average revenue per transactional email is 2-5 times higher than standard bulk mail
  • Transaction rates are 8x higher than bulk mailings for order confirmations and 4x higher for shipping and returns/exchanges
  • Customers tend to open transactional emails repeatedly
So when customers place an order with you and receive the “Thank you for your purchase” email – make sure you include some marketing in that email, such as a coupon code.
They just completed an order, so they probably won’t buy immediately – hence a coupon code with an expiry date is a better idea than offering an additional product (you should have offered that as an upsell before completing the purchase).
I bought a gift for a friend, and the confirmation email had a coupon in it:

Save credit card details

I shop on Amazon all the time. The few times when I don’t buy something from Amazon is when I’m after something specific and Amazon doesn’t have it.

Of all the reasons I prefer Amazon, the biggest one for me is that my credit card details are already stored there. If I’d go buy from an online store I’ve never visited, I’d have to enter all the payment and shipping details – all over again! No, thank you – Amazon it is!

No it is not just me talking — data shows a sharp jump in per account spending (and the trend is upward):

(Note: don’t copy Amazon blindly. What works for them, will not necessarily work for you. They can get away with a lot of crap.)

People are inherently lazy. Your job is to make buying from you as easy and convenient as possible.

Customer experience

People remember experiences. If the experience your website provided sucked, they won’t come back. Investment in user experience pays off.

Somebody on Quora suggests that play.com provides a great experience. I did a search on Twitter and it could be true:

Service is the new selling

This is directly related to the last point. Once you get the customers in, provide a superior support and service experience. You can always impress people with excellent service since the average is very low.

Once you provide excellent service, people not only recruit new customers for you, but they’ll be sure to repeat the experience.

 

Release a new, better model every year

iPhone, anyone?

Conclusion

When trying to increase your online sales, don’t forget the other two ways besides getting new customers. Optimize for all three ways and enjoy growth thanks to untapped opportunities.

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