How to Get the Top 4 Percent of Your Customers to Buy 16 Times More
As entrepreneurs, we’re always looking for ways to maximize profit. The problem is, we don’t know where to look. We think generating more leads is the only way to get more business when in fact, we can’t see the hidden profits right under our noses.
When looking for more profit, start with what you are offering and to whom. Many entrepreneurs are actually limiting the amount of business their clients can do with them. Could your current clients be getting more value out of each purchase with you?
You've likely heard of the Pareto Principle, which states that 80 percent of your revenue will come from only 20 percent of your offerings. This rule also applies to your clients and your pricing. According to the rule, the top 20 percent of your clients will pay four times as much and the top four percent will pay 16 times more, according to marketing legend Perry Marshall. This one principle can dramatically increase your bottom line.
Here are five ways to charge more to your best clients.
1. Upsells and add-ons.
The perfect time to make an additional offer is right after the initial purchase. Upsells and add-ons can offer a more complete end result at a better value for your clients. They also increase your average order value significantly.
The automobile industry is famous for using upsells and add-ons. You buy the standard model car but end up adding a sunroof, leather seats and a movie player. Amazon is extremely good at getting the most out of every purchaser by using their “frequently bought together” and "customers who bought this item also bought” sections. You come to buy kitty litter and end up with a new sofa.
What else can you offer your clients that gives them a more complete benefit and greater value?
If you are selling any kind of recurring service or product, why would you limit your clients to one time purchases when they can get better value and more convenience through buying longer periods of time? You could benefit greatly from a subscription model.
A few examples include a lawn service company selling by the season instead of by the mow. A sports team selling season passes in addition to individual tickets. A pest control company selling quarterly versus one-time services. An ecommerce company selling cosmetics or nutritional supplements on an automated monthly shipment. A tutor who sells monthly or annual rates instead of charging by the hour.
The benefit of the subscription model is convenience for your customer, more consistent monthly revenue for your business and higher customer lifetime values. If your product or service is repeatable, find creative ways to sell longer periods of time instead of charging by the hour, session or product.
3. VIP events or VIP access.
Why would you want your best clients to not experience everything you can give them? Think about how you can make your best client’s experience more comfortable or memorable.
Airlines sell first class seating to affluent travelers. Hotels sell suites at the top of their buildings for more than $2,000 a night. Concerts sell backstage access for high paying VIPs. Consultants and trainers host retreats or workshops for their best clients often charging more than $3,000 a seat.
Is there a way you can offer your best clients a better experience at a higher price?
4. High-end items.
Your top clients love to buy status. What can you offer them that says you’re special, you’re part of the club?
Starbucks sells espresso machines in its stores and online. It understands that it’s biggest fans will buy a lot more than just a grande latte. It’s not uncommon to see an extremely high priced bottle of wine on a wine menu for those who want to feel special and celebrate a big night.
Is there a more expensive product or service you could offer?
5. Concierge services.
Your best clients have money but are less willing to give up their most precious asset, time.
Grocery stores are now delivering groceries right to your home. Pet sitting services are offering more extensive care. If you are a consultant, you can offer more VIP access to you or done-for-you services by bringing in subcontracted partners.
How can you add a high-end service that does the work for your best clients? Take out a sheet of paper and make a list of your top products and services. Try using various combinations, packages and upsells to increase the amount of value for your clients and profit for your business.
Is there a way you can create a high-end offer or done-for-you service for your best clients? If you are not offering more to your best clients, you are simply denying them the opportunity to get a more complete result from you, and you are leaving a ton of potential profit on the table.