Grow Your Numbers – Increase Transaction Frequency
Have you ever done the maths on what your average spend per customer transaction is? That is, how much your customers spend on average with you each time they buy? It’s a lot easier to do than you may realise – simply take your total sales for any period, say a rolling 12 months, and divide this total by the total number of invoices for that period. You should be able to work out the number of invoices by using your invoice numbers.
Once you know the average transaction value, you can see the value to be gained by getting your customers to buy from you one more time per year. Even if only 50% of your customers bought from you one more time, your sales are bound to increase significantly.
Let’s do an example of a house maintenance business (that does window cleaning, house washing and gutter care). Imagine the business has 500 customers and turnover of $130,000. There are 460 invoices for the year so $282 is the average spend per transaction. Some customers are vigilant about getting their house and windows washed and others leave it until the mould and leaves in the gutters are causing leaks.
If the business owner was able to get one more transaction per customer on average per year, then sales would more than double (500 customers x $282 = an additional $141,000 ). More importantly, the owner would prevent (literally) an unmanageable flood of new work requests after each time it rains!
So how do you increase transaction frequency? Here are 10 ideas:
- BAMFAM – Book a Meeting from a Meeting – at the time of doing the work, set the expectation and value of doing the job again and book it in then and there
- Articulate the benefits of doing the additional work / consequences if it’s not done
- Follow up – contact your customers if they don’t book in the next scheduled lot of work
- Network / attend events where your existing customers hang out
- Set up a service plan with monthly payments to lock in the commitment for repeat work
- Offer a loyalty or frequent buyer programme
- Send gifts to your customers
- Widen your product offering and promote this to your customers
- Visit / call your customers
- Ask us for 10 more ideas J
Repeat customers become your clients as you build a better relationship with them. So long as you do a good job and send the right signals (that you’re not snowed under and have capacity for more work) they will become you advocates. Advocates endorse what you do and therefore provide you with the cheapest form of new work – referrals.
Get closer than ever to your customers. So close that you tell them what they need well before they realise it themselves. – Steve Jobs