ON THE MOVE
informed her she had to buy it at the time the appliance was purchased. She was stuck with the high repair bill. So, why didn’t the salesman offer the warranty to her at the time of purchase? He was either under-trained and didn’t un- derstand a warranty has real value, or just too lazy to offer it. Or he mistakenly believed he would blow the deal if he tried to add on the warranty. Silly on all counts. Are you offering your customers those things that would be of real value in their lives? As long as you offer the right products to your customer, you have nothing to be ashamed of or fear in up-selling … and only profits to gain. As you implement a system to offer every customer you sell a better or added deal, right at the point of sale — like upgraded speakers or an amp to go with his new deck, or a pre-programmed bundle of extras like a remote starter and se- curity system, at an advantageous price — you’ll get a lot of takers. Statistically, 15 to 30 percent of customers offered an advantageous up-sell will say “yes.” Those stats apply across all industries. But in mobile electronics, you’re in a business where your customers view you as experts and rely on your expertise. Experts’ up-sell success odds go up to 30 to 50 percent. Definitely worth doing!
HOW THE UP-SELL IS USED IN DIFFERENT CIRCUMSTANCES When he walks in the front door of Innovative Car Audio in
Sandy, Utah, Mr. Prospect is greeted by the emergency flashers on the back of a jet black Camaro. The trunk is open and he sees a pair of awesome Focal subwoofers, amps, and various other hardware the average shopper can’t even name — not to mention a nifty-looking video screen hanging from the trunk lid. Wow! Clearly this is a high-dollar set-up (a cool $18K in this case). There’s no way most prospects are putting anything like that in “the wife’s ’06 Volvo” right now, but the impression has been made … the dream is identified. When the sales rep asks Mr. Prospect what his needs are, the image of that amazing system are still dancing in his head. He’s not looking for thousand dollar speakers, but he would like to upgrade from factory standard issue. Because of the principle of contrast — having seen the dream as noted above — spending a couple hundred dollars on reasonable quality speakers seems like a bargain. And if the rep is bright enough to offer a good amp to help drive them properly, even though Mr. Prospect wasn’t considering one when he came in, he’s going to be very pleased with the performance of his wife’s system, and he’ll feel like he exercised restraint as well. Every- body wins!
Letting him see a set-up several notches above what he was looking for makes his upgrade seem positively modest by com- parison, and he feels free to spend perhaps significantly more than he had originally considered. After all, he was unaware of
WHAT’S THE FINANCIAL IMPACT OF UP-SELLING?
How much can the add-on or up-sell technique add to your bottom line? That depends on you … but you have to make sure you’re looking at the right numbers. A typical scenario might look like this: Average gross product sale
Average cost of product/labor (60%)
Customer acquisition cost & overhead (30%) Average net profit
$900.00 $640.00 $170.00 $90.00
Up-Sell $150.00 Average cost of product/labor
Customer acquisition cost & overhead Net Profit added to overall transaction
Total Net profit on overall transaction Percentage of increase profit due to up-sell
$90.00 0.00
$ 60.00 $150.00 66%
If you and your team systematically offer more to every single customer, and a very conservative one-in-four says yes, you’ll instantly, automatically and easily add 16.5% to your overall bottom line. That’s without spending another penny on advertising and scoring even one additional transaction.
50 Mobile Electronics February | March 2011
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