Increase Average Sales

When you go to your local McDonald’s and order a burger the clerk will automatically ask you if you want to have fries as well. Every customer who answers “Yes” adds $1 or more to that particular sale. If just a fraction of McDonald’s 54 million daily customers say “Yes,” that means millions on extra dollars. This strategy is an effective way of increasing average sale.

The same strategy used in increasing average sale should be observed by start-ups. These businesses have not yet built a large customer base so they need to increase average sales as much as possible from each person who buys from them. It is like the old story: A bird in the hand is worth two in the bush.

During the first few months of operation your focus is not the market share but increasing average sales. Boost the dollar value of your average sale, and you boost your cash flow and bottom line. Here are some tips to help you increase average sales.

1. Crunch the figures. To start increasing average sales you have to understand the dollar value of your average sale. Say for example you have 30 customers and your total sales reach $1,500 on a normal day, then your average sale is $50. After you figure out your average sale in a day you can set a higher target from then on and plot your strategy as to how you can reach your goal.

Depending on the nature of your business it would be helpful if you can calculate your average sale per hour, day of the week, location, marketing campaign and other variables. The answers that you get will most likely lead you to your plan of action. Say for example you average sales on a Monday is pretty low compared to other days then you can plan special Monday promos.

2. Change the product or service mix. Adding or subtracting to what you sell can help you increase average sales. Take the case of a bakery that had an average sale of just $5. The problem was they offered virtually no higher-priced items. When they added specialty cakes and other premium goods, that figure jumped to $14.

You can achieve the same effect if you get rid of lower-priced products. Say for example you sell three different types of jeans drop the $35 jeans and the customer is forced to get either the $45 or $55 jeans instead.

3. Give bundle offerings. A good way of to increase average sales is by encouraging your customers to spend more. How? You can provide consumers with a packaged deal on various products or services. Take McDonalds for example, they do have what we call Extra Value Meals that include burger, fries and a drink.

4. Raise prices. Being the cheapest in the market is not the right technique to increase average sales. If you are just starting your business, price your products or services on the high side and then figure out how to offer more value. Being the cheapest in the market is not necessarily going to pay the bills, and you will be left high and dry when a competitor beats your price.

If you use these strategies I have cited you would be able to increase average sale by maximizing every transaction you get. You help keep the cash flowing while you are getting your business off the ground. And once business has taken flight, these same strategies can develop your flight plan for generating peak profits. Master the art of supersizing your sales early and it will pay off many times over.

Acquiring New Customers

It is so sad to see a customer walk-out of the door empty handed. A potential sale goes up in smoke so does the potential for acquiring a new customer. Nowadays a lot of small businesses turn to plenty of channels to acquire new customers. However some of them are expensive that it acquiring new customers cuts down your business profit. Acquiring new customers does not have to be tedious and expensive.

For start-up businesses every sale counts. As a newbie in the industry you have to make sure that you maximize every customer you acquire, every sale that you make.

The first step to acquiring new customers which will eventually increase sales is to calculate your actual conversion rate. Since you are running an online business, web analytics software should do the trick for you.

The optimal conversion rate of course will vary from business to business depending on the product being sold. However, knowing the ratio is the key because many businesses overestimate this figure. Seeing the actual numbers is a signal for entrepreneurs to focus more on acquiring new customers hence sales are improved.

Once conversion quotient is determined, you are on your way to improving it. These strategies will help you close more sales and of course assist you in acquiring new customers.

1. Stress your USP (Unique Selling Proposition). Making your business unique, separating it from others is an effective way acquiring new customers. You have got to deliver you message loud and clear.

2. Figure out the bottleneck in your sales process. If you are set on acquiring new customer you also need to analyze the steps required to convince prospects to buy from you and pinpoint the weak spot. Say for example you are in the wedding dress business. To help you acquire new customers you need to show photos of your work, propose a design for your client, price the item etc. Look closely at the pictures you provide are these pictures clear enough? Are these pictures detailed enough for your customers? Figure out the flaws and for sure acquiring new customers will not be far behind.

3. Rewrite the sales pitch. One of the biggest roadblocks to acquiring new customers can be traced to sending the wrong message. Take the home security firm whose opening line will be, “We heard there have been series of break-ins in your neighborhood and we would like to assist you in keeping your house secured.”This approach was a major turn-off so it has to be changed. With the revised opening the firm acquired new customers and hence increased their sales.

As you can see acquiring new customers for your start-up business need not be expensive. It is more of a controllable facet that some entrepreneurs fail to look into. Do not make the same mistake and start acquiring customers for your business and in doing so you also increase the sales of your business.

Setting Prices

One of the biggest obstacles an entrepreneur can face is setting prices for his goods or services. Difficulty in setting prices is experienced not only by startup businesses but also established businesses. The frequent topic with setting prices is risk: risk environment prices too high and you may push potential customers away; risk environment prices too low and you cut business profits.

Due to this pricing paradox most owners turn to discounting. However the risk in most cases can be removed if you have the right information. In general if you know more the less risk you perceive. From that standpoint, pricing is all about getting as much information as you can about your market, your customers and your own internal numbers that drive your profit.

There are no secrets to a successful business, it just takes knowing the right information. When it comes to setting prices, here are some tips to help you avoid mistakes most entrepreneurs make. If you can avoid these, you'll not only be ahead of your competition, but also you'll be ahead of most other businesses.

1. Going too low. Some entrepreneurs set low prices as a strategy. Setting prices that are low will of course increase their top line revenue numbers however they fail to consider their bottom line profit number which is important. An entrepreneur has to profit and price accordingly. You might not get business out of all of your price-conscious consumers, but that is fine. Your competition will--and in doing so they will have to figure out how to profit from the "price shoppers" when there is little or no profit to make.

2. Using the same margin for all items. When setting prices always remember that there is no law stating all products must have the same prices. Keep in mind that slower moving items need higher profit margins. You can afford a smaller margin based on high sales volume. But still you should find ways to add value and increase those margins. Because in the end, even those incremental increases over time will have a huge impact in your bottom line.

3. Not understanding the difference between margin and mark-up. In setting prices these are things you should know margin and markup. Margin is based on the sales price; on the other hand markup is based on the cost. In setting prices most small businesses utilize markup formulas, but many overlook margin. That is a mistake, according to some consultants, since utilizing margin as a tool for analysis helps improve profitability. It is well worth the time for any businessperson to know the difference between margin and markup and how to use both.

4. Doing what others do. Sometimes we set our prices according to the price of competitors. Instead of setting price the same as them why not do a little more research and start to discover and uncover the value you truly offer your customers. Then price for value. IN doing so you will be in the best position to defend your price against competitors with your own “Why list.” Make your customers realize that your price is well worth it.

These are just some mistakes that you should avoid when you are setting prices. Avoiding pricing blunders and being strong in your pricing scheme go hand-in-hand in constructing a profitable business. Master the so-called "pricing paradox" and you will master an area of business in which even the most experienced business people sometimes struggle.

Advertising Online (part 2)

Advertising online is a type of promotion that uses the Internet and World Wide Web for the expressed purpose of delivering marketing messages to catch the attention of customers. As a budding entrepreneur one of your biggest obstacle probably is producing advertisements online. I mean if you are not going to ask for any assistance from ad agencies, producing an advertisement online of your own will be a little difficult. The key is to engage your target audience, because for advertising online to succeed, it has to be remembered.

Here are some tips to make advertising online a success:

1. Address the right audience. Advertising online involves understanding your target market. How well do you know your prospects? Your ads should immediately appeal to prospects and speak to them in their possess vernacular, including buzzwords. Your advertisements online must at all times ring true, without the use of gender or cultural stereotypes, or exaggerated claims, so prospects automatically understand that your offer directly relates to their needs and wants.

2. Visual focal point. Since you are advertising online you need to create ads that use a single, eye-catching visual to provide central focus. Competing visuals will make your online advertisement cluttered. Advertising online should be about attraction right? If your page seems cluttered and disorganized prospects will no doubt get turned-off. With so much competing advertising, make your ad stands out by virtue of clean, clear design, with an appealing focal point and simple elements.

3. Create “THE” moment. If you have been advertising online for some time now, you must be aware that the word “new” is used quite often. That is because our brains are actually alert for new information about various topics. Advertising online is all about providing new information; great ads have the ability to open minds. Your ad has the power to show your customers a new way to achieve a goal or provide unique insight. In return you will get greater audience attention and elevated response rates.

4. Make things happen. Any ad value its salt should move a prospect to take some kind of action. Advertising online should show the benefits a customer can receive. The headline must contain these benefits and include features in your body copy; your prospects will be motivated to learn how to take advantage of what is pledged.

5. Powerful benefit. Formulate a headline that pulls your readers. Make use of it to point out a desirable benefit or offer. Find out and understand what your customers want that you can provide.

Advertising online can be done in a lot of ways but however way you do it, it is vital that you use the form that is best suited for your online business. If you do not advertise your business online nobody has a clue that it exists. Trial and error is a great method for advertising online, so try out some of these tips and increase your online sales.

Advertising Online

Before, advertising online was considered as unusual. In the past companies invest most of their capital on tradtional advertising. If you get to see their budget plan, marketing probably holds the biggest share after operating expense and advertising online was not used. But with the dawn of the internet this was changed. The internet has brought many unique benefits to marketing, one of which being lower in costs and greater capabilities for the distribution of information and media to a global audience. In short advertising online became essential to many businesses.

Here are some tips you can you when you are advertising online:

1. Network. Was there a time that you received a message from someone asking you to send that same message to 10 of your associates? If you pass along emails to your associates who are in your address book whether it is about a virus alert, crime alert, and stories -- you can use the same strategy in advertising online. Inform your family, relatives and friends about your new online business, and then ask them to do the same thing and let their friends know about your online business. Compose an email that will describe your business and how people can benefit from it. Hopefully, your email will be passed on to some more of your friends’ friends. This is an effective way of advertising online. Do not forget to ask for their comments and suggestions on how make your site better.

2. Viral marketing. Another effective way of advertising online is through viral marketing. Viral marketing is a strategy that relies on individuals rather than traditional campaigns to pass along a message to others. Two of the most successful online businesses who used this strategy were Hotmail and BlueMountain.com.

Referrals are also an effective way of using viral marketing. If you are one of those sites who offer content service, you can place a “Tell a Friend” button that will enable customers to recommend products or web pages via email to their friends. Some services that you can use are Recommend-It and BigNoseBird.com. These services will allow you to keep track of those who recommended your online business and to whom did they recommended it to.

3. Start your own newsletter. Formulating your own newsletter is an effective way of business advertising online. Newsletters and e-zines have become valuable tools in building loyalty and repeat visitors to your online business. You have the option to develop the content of your newsletter, or use articles provided by other authors. Establish your mailing list as you go along, but remember that you should never send unsolicited letters. Spam is simply not worth it.

4. Participate in forums. A lot of websites provide message boards because this is a good way of attracting traffic. You can post messages and invites to your site, but of course make sure that the forum you will join is relevant to the product/services that you sell. Participate in the discussion, and end your post with a link to your site. This is another way of advertising online.

Do not throw away your hard earned profit on traditional advertising. Find cheaper means and ways to let people know your online business exist. In doing so, you can use the money on other important things that will benefit your business in the long run.

Products to Sell Online

The internet is considered as one huge market place and everyone came up with their products to sell online. In the past I have told you about the success story of Hewlett-Packard and where it all began. A lot of small businesses were inspired to gain their own share of action so they came and everyone is just so eager to introduce their products to sell online from houses to handcrafted tapestries.

If you are an aspiring entrepreneur, you read other people’s success stories and you feel like, “I CAN DO THAT TOO!” However, the product that you will sell online is the thing that should be dwelled on.

Keep in mind that not all products can be sold online. Some products may be better suited for online sales than others; some products simply are not built to be sold online. According to a study done by Ernst and Young the most popular online item purchased were computer related products at 40 per cent, books at 20 per cent, travel at 16 per cent, recorded music at 6 per cent, subscriptions at 6 per cent, gifts with 5 per cent and investments with 4 per cent.

The types of products/services that sell best online take advantage of the internet’s convenience. We all know that convenience is one of the reasons why a lot people opt to shop online. The choice of products you sell online determines the success of your online store. Keep an open mind about the suitability if products for online sales, and to increase your chances of success it is imperative that you choose a product/service that exhibit important characteristics. Here are some tips to help you choose what products to sell online:

1. High value.

If the product you sell online is unknown to many people rest assured it will create a commotion, and this has been proven time and again. Consumers are highly attracted to products that are unusual. Say for example the product that you sell online are toothbrushes; do you really think people will buy it? I mean sure it is convenient for them however if you are going to charge shipping then it will cost more compared to buying it from some store. Some online entrepreneurs stick to selling special cheeses, rare cigars, Persian Carpets, etc.

2. Information products.

Like what I have said time and again, the internet is a great source of information and it is also used for entertainment, communication and research. Since people use it for such, good products to sell online are softwares, books, magazine subscriptions etc. These are the most popular products that sell online nowadays.

3. Services.

Some people think that selling or offering services online is not possible, but think again. Hotel reservations, air travel and investments have successfully transitioned their business online. If you travel frequently then you must know how convenient it is to book a flight online and also reserve a hotel room. Everything can be done at your convenience.

Whatever product or service you decide to sell online always remember that a successful online business is the one that is able to provide convenience combined with excellent service and outstanding reliability of delivery. Keep in mind that the choice of products you sell online determines the success of your online business.

Building Customers Online

Success online depends on how well you understand people. I mean sure you have a great product / service, but is this what your target audience need? Before anything else it is imperative that you know and understand what customers want on the Web. If you want to build customers online you have to formulate the right strategy and determine the best goals and objectives. Building customers online is essential because your customers can also point you as to when you should start looking to change direction.

Here are some ideas to keep in mind when building customers online:

1. Understand what the internet can do for you.
The internet as a whole is a very powerful channel and building customers online is one advantage you get. And since we all have different goals in mind as an entrepreneur we need to understand what the internet can do for our business.

Some entrepreneurs opt to start an online business because they cannot afford the demands of a physical store. The good thing about an online shop is that everything can be done from your computer and of course it is less expensive. With an online store you are also able to market to the global community, for a little cost or at times none at all.

2. Give customers pertinent and valuable information
The internet has become a necessity and is a good source of information to users. A lot of people nowadays use the internet to find the information they need, whether shopping for books, looking for directions, etc.

If you want to build customers online you should be able to provide the best information. If you are publishing an e-newsletter on online marketing, make sure it is the best resource the customer will ever read. If you are selling information products like eBooks, take note that people look for information first meaning they want a background on what you are selling. So instead of doing full-on sales pitch, it is ideal that you provide an excerpt of your information product which will make visitors stay longer.

This is just like promoting a new movie. Producers provide a “trailer” so you will get an idea of what the movie is about. In doing so the audience become curious and hence builds interest.

3. Harness the familiar
Many people fear the unknown, which is of course normal. True, that shopping online is way different from actual shopping (traditional); there are numerous ways wherein you can make the experience less scary for your prospects.You are on your way to building customers online once you have eliminated this apprehension.

If you are selling products online, your major challenge will be show to show the products clearly on the computer. Since customers won’t be able to see it up close nor touch it providing them with big, clear and detailed pictures are necessary. Many returns and exchanges over goods purchased occur because customer expectations are different from the actual product.

One great technique of building customers online is by providing them with online assistance. Through this customers can be easily assisted with products, ordering, returns and exchanges or any problems with your website.

4. Listen to your customers
In building customers online, you have to listen and understand their needs. Why is the customer shopping online? Convenience and price, as well as product assortment, are just a few reasons why people shop online. Understanding the customer also entails understanding their concerns which prevents them from shopping in your site.

Take time to listen to your customers. Remember that building customers online is crucial to your online business's success.