By Jane and Larry McGrath
When customers purchase an item from you, it’s important to make sure they purchase everything they might want or need. To make sure that happens, you must ask good questions and make reasonable suggestions. Increasing sales by “adding on” items is important for two reasons: It creates satisfied customers and it boosts profits.
Jeff Haefner, a nationally known author and retail software expert (www.possoftwareguide.com), illustrates the positive aspects of add-on sales with a story about buying his first wake board. After browsing through his local sporting good store specializing in water sports and talking with the salespeople, he found an “awesome wakeboard.”
He was proud of his purchase and very happy with the advice he received from the sporting goods retailer. Unfortunately, on his first day out he found it difficult to get his feet in the bindings that he was worn out before he was even ready to hit the water. The problem: He didn’t realize he could use “binding slime,” so his feet would easily slide into the bindings. With this new knowledge, he made the 45-minute trip back to the store and bought some binding slime.
A few weeks later when a friend suggested he use a different type of rope—one that didn’t stretch and had wider handles for tricks and turns—he was so totally discouraged with the store he ordered the rope on the web.
Haefner said, “I really wish the retailer would have told me that I would need the slime and a rope when I first bought the wakeboard. But they never brought it up.
“Just imagine if the retailer would have sold me the slime and the rope when I bought my wakeboard,” he added. “Not only would I have been a happy customer, because I didn’t have to go back, but I also would get the ‘full experience’ that I wanted.”
Too many retailers, like the one at the sporting goods store, view every interaction as a one-time sale. When that happens, they miss opportunities to sell more items, enhance the customer’s shopping experience, and create a loyal customer.
Add-ons are when customers buy two or more things during the same shopping trip. Asking those simple “Would you like” and “Have you considered?” questions can easily add 10 to 15 percent to your shop’s profits.
The reason this type of sale is so profitable is because costs such as marketing, labor, and overhead have already been realized. Every item you can add on to the ticket is extremely profitable. For example, if you were able to add $500 per day average in sales, you would see an additional $130,000 per year (based on five days a week, 52 weeks per year). That’s a great deal of money with just a minimal amount of additional effort.
But you can’t sell racers something they don’t know they want or need. For add-on sales to happen, you must personally suggest it or make it visible and enticing.
One strategy for increasing add-on sales is to build up the dollar value of a sale by adding on items directly related to the main purchase. Called companion and complementary add-ons, they are products that help a customer complete an installation, accessorize a product, or obtain more satisfaction from the primary product.
Customers shouldn’t have to work out add-ons for themselves. Your advice and guidance save them the frustration of getting home and finding they didn’t get all they wanted or needed to do the job. For example, when a customer is buying connecting rods and says, “I always break the retainer.” Respond with “How about a couple of packs of spares then?” Even if you have a refund policy for unused items, you may find that most of the “spares” are not returned, but kept for future use.
A number of the products on your shelves make it easy to suggest companion or complementary items. For example, offer fasteners to every customer who buys connecting rods and suggest plug wires or a new coil with every distributor purchase. Recommend spare seals and gaskets to valve cover and oil pan buyers. Offer keepers and cups with valve springs. And always ask about tools, fittings, lubricants, and other chemicals needed to complete an installation.
In some cases, manufacturers help you and the customer by listing complementary items on their packaging. For example, the back of most Edelbrock packages has a list of products that go with the item. All you need to do is go over the list with customers to make sure they have considered all the possibilities.
When packaging doesn’t list add-ons, check with the manufacturer or distributor and read the instructions to develop a list of “needed” and “recommended” companion purchases. Post signs or tech sheets with the information. Then, during the sale or at the register, highlight a few items on the list with the customer.
According to Haefner, there are several point-of-sale systems available that include an “add-on sales” feature that make those add-on products pop up at check out. The software will even display a special script, so the cashier knows how to sell the items. So, in his wakeboard example, a reminder message to sell the binding slime and the wakeboard rope would have appeared for the cashier before registering the final price.
Although it’s often overlooked as an add-on category, fanwear is a perfect product. For example, when customers like a particular logo or are loyal to one racer, they usually find it difficult to pass up new companion items.
An add-on sales approach that can increase customer goodwill can be achieved with a small, useful companion item as a two-for-one purchase deal. For example, as you’re completing the sale of a jacket, bring out two caps and say, “Since you’re buying the jacket, would you like two caps for the price of one.”
In addition to companion add-ons, or when the main product has no sensible related items, you can suggest adding on general items.
One approach is to offer a “hot product” every month. Work with distributors to get special quantity promotional deals on new and popular items and highlight them with customers. “Have you tried this new valve adjusting tool?” “Can you use some of this new silicone sealer?”
Another popular and helpful strategy is to use items racers need regularly such as small tools, tear-offs, and racer’s tape as add-ons. To approach it systematically, identify 12 categories of items—one for each calendar month. Assign categories to their high–probability sales months, such as tools during preseason and consumables during racing season. Then, each month, recommend items from the category with lines like, “We’re having a special on tapes and sealant,” or “How’s your stock of fasteners?”
Don’t be afraid to upsell when it’s appropriate. When customers ask questions like, “How much would the custom model be?” or “How much more is the performance set?” make sure your sales staff gives more than just a dollar amount.
Prepare employees to respond with complete answers such as, “The cost for the custom model is about $200 more but it includes all you need for installation,” or “It’s about a third more initial cost but it carries a full-service warranty.”
When you can offer an upgrade, a warranty, accessories—anything that adds value—the customer is more likely to see such a suggestion as helpful rather than just a sales ploy.
Since some employees may not personally work with customers, use what you know about customer buying habits to put the right product in the right display at the right time.
Use traditional floor cards, end caps, aisle tables, and counter displays. For example, you can create a “store special” counter display and have the cashier encourage add-ons by saying, “We’ve discounted tire bleeder valves this week. Can you use one?”
Or, since novelty add-ons appeal to some customers, keep a fresh display of badges, pins, patches, pennants, and other small items near the register for last-minute sales.
Plus, develop more interactive displays like a hands-on computer area or a mini track for running die-cast collectibles or radio-controlled cars. Such experience displays give you the perfect opportunity to market several products as an inseparable package.
And don’t overlook the importance of changing displays and rotating merchandise regularly. You need to change the types of displays as well as the merchandise to keep your customers interested.
There Are Limits
Suggestive selling can be helpful and profitable, but there are limits. You don’t want customers to dread coming in because they know they’ll have to contend with too many sales pitches.
How much can you offer without going too far with add-on sales? First, use three general guidelines. 1) Keep the customer’s needs and budget your top priority. 2) Make your questions and recommendations helpful. 3) Be assertive not aggressive.
Then, you have to know your customers: Who is always short of money? Who appreciates helpful suggestions? Who likes to be independent and in control?
In addition, there may be “purchase price points” for customers. Often you can easily add on items to just below a round number such as $50, $100, $500, but would offend or turn off the customer if you went above it.
For example, adding anti-corrosion washers and new tie-down brackets to a battery sale could add $10 or $15 but still keep the total cost reasonable. But, suggesting new cables might go too far and even make the customer rethink the entire purchase.
Your long-term success depends on satisfied customers returning to the store regularly. Increasing the number of items sold per transaction can increase sales and increase customer loyalty.