Trade; Trade-up; Trade Again and Efficiency… the theory and the big bet!
I was with my son last week and we were discussing different ways that a retail outlet could increase their sales. This culminated in a 50 Euro bet!
My theory is that there are, in fact; only three ways to increase sales for ANY business…. and 4 ways to make a business more profitable
Trade; Trade up; Trade again and Efficiency. Let me explain my theory:
Trade: is about getting one new person to come to your establishment and purchase at least one product.
Trade-Up: relies upon the ability of the staff, the advertising, or the store layouts to get the customer to buy more than one product, or one larger product (costing more)
Trade again: is when the experience of coming along to your store or outlet is such that the consumer or customer returns to the outlets more frequently than they may have.
This theory depends very heavily upon the ability of the staff that you recruit to be firstly knowledgeable, secondly articulate and thirdly friendly.
I could see that my son wasn’t wholly convinced but he was also struggling to totally contradict my supposition, so we decided to try the principles out on the Blueprint Café – a notional coffee shop as a way to test this thesis.
The first job would is to stimulate trade. This can be done in a number of different ways, suggestions like Social Media, Word of mouth, leafleting local business and indeed pedestrians in the precinct or in the local vicinity. This should stimulate some people to come in to the coffee shop. The next stage is, once we have the potential customers inside the building to try and get them to buy more than they originally thought they would, as in any typical coffee shop, we could do this by offering three sizes.
A small, medium, and a large – even better still would give them Italian names. Most people will then move towards a central choice. Recent research suggest this is as high as 80% if there is pressure on the individual as in a queue. They will not typically choose a small size because that would appear mean, and they will not typically choose a large size because that would appear greedy therefore they would settle quite neatly on to size number two the medium. Thus we have managed the first of our objectives to get them into the store – Trade.
The next objective is to get them to buy a bigger size (Trade-up). Here we need some simple training for our staff. We use the ‘Stephenson nod ‘principle, when you engage with someone then a simple nod of the head actually primes the other individual to accept your supposition – it is called priming in the world of psychology. Think how you are primed or currently prime a child to accept your suggestion -“Shall we tidy up now” + a small nod of the head.
In this case it would be “Would you like a Muffin with that…?” + a small nod of the head on the word Muffin. Even better would be to use and alternative close “Would you like a Flapjack or a Muffin with that…?”
As the staff practice more then the fluidity of the close and the Stephenson nod will become more natural and the success rate will rise – Trade up delivered Boom!
From here our third objective is to get them to come back more frequently (Trade Again). This too is quite a simple task. This is linked to rapport, theatre, environment – have we thought about how the space is set out, does it fit in with the mood state and the needs of the current and the future consumers – Look at how someone like McDonalds have changed some of their stores to be more coffee shop culture, softer seats, green environment, free Wi-Fi etc… we could also give out customer loyalty cards which means that after you have purchased five regular coffee’s we give you a sixth for FREE. Thus we have your loyalty for at least six visits. By then the customer will be loyal and developing a habit of visiting our coffee shop regularly. This will of course depend upon how friendly we are as barista, the ambiance of our coffee shop and the type of people we attract.
How do you as a business use the simple rules to sell more?
Of course, if you want to make more money you also need to make the best use of your second biggest cost – your staff, so anything you can do to make your staff more efficient, in truth, to get more from them in the time available, will drop money straight into the till.
Our 50 Euro bet still remains intact Trade, Trade up, Trade again + Efficiency. I know that my son is working hard to try and added another element and win the bet but think how this applies to your business?
How do you get more customers?
How do you sell them more of your products to each of these customers?
How do you get them to come back to you more frequently to buy more products?
Finally how do you process the orders more efficiently or make the process swifter to get more out of your staff in the time available?
This also applies if you are selling…
How do you help your customer get more customers into their shop, onto their fixture?
How do you help them sell more of your products to each of their customers?
How do you help your customer to get their customers to come back more frequently to buy more products?
Finally how do your processes help your customer to be more efficient or make the transactions swifter, or staff more knowledgeable so that the customer can get more from the each member of staff in the time available?
I look forward to you joining the challenge to find ways to make your business more effective efficient and profitable – happy hunting!
Remember there is always…