don't produce the product or service, someone else does and that someone else gladly will pay you to allow them to have access to your client base so they can upsell your customers. There's always something else to sell them.
The practical implications to upselling will most likely result in forming joint venture relationships. Businesses today operate differently than before.
Another good example can be seen in mail-order flowers. On the average, there's actually 6-10 days from the cutting of a flower before a customer receives it and puts it in a vase in his/her home, whether as a gift or simply to brighten up the home. The lag time is caused by the traditional distribution system of wholesalers, distributors, and retailers. A real entrepreneur, who worked literally for years on an idea for flower delivery in up to 9 days, created a direct from the grower to the customer via Federal Express. Today, that generates $10,000,000 in sales. What was the entrepreneur's product? It was an idea worth $10,000,000.
That business is merely a series of relationships between a catalogue company, Federal Express, and several independent flower growers throughout the United Slates. It's a business of joint ventures. Even though this guy didn't actually have the product or service, he created one.
This leads us to finding Your Business Within Your Business. A real powerful concept is to challenge yourself, your clients, vendors, and employees to constantly search for new businesses within your business.
There are an unlimited number of offshoot businesses you can create. You can have an offshoot of consulting to those people you sell to. You could then communicate and market and also do seminars and workshops.
For car dealers, they can provide extended warranties and insurance to new car owners. For a contractor, whether it's heating and cooling, pools, pest control, or whatever, they can also provide annual service contracts.
An example would also be a pool contractor, who for instance, might use upselling through the offering of an annual service contract to clean and service a pool four times a year. This can dramatically improve his bottom line. In fact, this can actually double the value of your customers by an added income of 40% when they sign an annual contract.
Let's say the service call for a pest control or pool service call is $100 and there are 100 customers per year. There's a gross of $10,000, which is $100 per customer. The upsell strategy is an annual contract where you're going to visit four times a year. The cost for each visit to the customer is $100, so the total cost at this point is $400 (before giving a discount.)
If they buy today, you give them a discount of $150, so $250 is the cost to the customer. If you close just 40% of these people, your new revenue is $10,000. 40% of 100 is 40 people times $250 which is the cost of the annual contract.
So, the new value of these 100 customers is $20,000, $10,000 for the service call ($100 x 100 customers) and another $10,000 for the 40 people who paid $250 for the annual contract. The value per customer is now $200. You made $20,000. You still have the same 100 customers. They're now worth $200. That's double the value.
What service can you upsell to your clients? Virtually every business can add a newsletter or an extra month of a diet plan for half the original price. Maybe a consulting service could be provided. The possibilities are endless. Let your creative mind work for your business instead of limiting it to just one product or service.
Article Source: http://www.articles-galore.com
Don Resh is CEO of WebForce, Inc. A more detailed bio is available at:WebForceSolutionsBizBuildSoftwareTurboMaxSoftware
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