|OCTOBER 2008 I THE CUSTOMER WHISPERER I BY GREG BILLINGS I DOWNLOAD PDF
The Art of Add-Ons
Shopping is essentially a seeking and selection process. Its goal is gratification. Its behavioral origins are deep in our genetic makeup and may be as instinctual as they are intellectual. This explains why men so often shop as hunters, finding the first big one and killing it, while women shop as gatherers, inspecting each berry for ripeness before picking it.
Behavioral biologists tell us the chemistry of instinct is hormonal. Our bodies react to stimuli and events by secreting miniscule amounts of powerful steroids, affecting us both physically and emotionally. We have all experienced an adrenaline rush at one time or another, but we might have been unaware it was pheromones that initially attracted us to our one true love. Often, our mouths begin to water even as we consider picking the strawberry from the bush. The customer whisperer understands much of his clients’ decision-making occurs in the sub-intellectual, emotional realm, allowing his calm, assertive leadership to be even more helpful to his lucky clients.
Riding the Emotional High
Years ago, I read an article about a fascinating study. Researchers outfitted subjects with portable cardiac monitors and tactile sensors, gave them some cash, and sent them out shopping. The recorded data on heart rate, respiration and perspiration provided a revealing picture of the physiology of shopping. Amazing as it seems, our product-selection process closely mirrors our mating-selection process. That’s right: Shopping is just like sex.
We’re all familiar with the courting process. Desire leads to seeking. Seeking is followed by infatuation. Arousal evolves from infatuation and may lead to coupling, where the highest emotional (hormonal) peak occurs ... well, you get the point. Depending on the quality of the experience, the result may be either satisfaction or remorse. It turns out shopping follows the same pattern, with the emotional peak occurring immediately before money changes hands.
We observe this behavior at the check-out line in our local grocery store. Customers fidget with their purses, cash and credit cards while waiting, as if they can’t wait to spend. Clever grocers place low-ticket, high-margin impulse items close to the register. Recently, soft drink coolers have appeared, further encouraging waiting patrons to satisfy their immediate urges.
Tripling The Gross Margin
The customer whisperer knows from the time his clients make a choice until they pay for it there’s a golden opportunity to increase the transaction’s value. Customers are never more willing to add items to their “shopping carts” than they are at this crucial moment. Hormones are flowing, and the client is in a buying mode.
Each purchase decision makes the next decision easier, especially if the dollar amount keeps decreasing. A guitar whisperer might first suggest a $249 hard case, next a $189 effect pedal, then a $129 stand, followed by a $99 cable before getting to strings, picks and T-shirts. If your client won’t spend $249 for a case, he might spend $199 or even $99 for a gig bag. Properly done, this exercise can double the sale, triple the gross margin and send a very happy customer home to enjoy his new prize with all the best accessories.
Amazon.com has been able to increase its average order as much as 40 percent by simply reminding customers they can get free freight by adding an item before they check out. A customer whisperer will use the same strategy by offering accessories, upgrades and services right before he asks for a credit card. And he can keep the ball rolling by continuing to offer items until his client is satiated.
The key elements to successful add-on selling are timing and preparation. The time is immediately before money changes hands. Preparation, however, takes a little forethought. You obviously can’t add-on what you’ve already given away. You might want to think twice about throwing in delivery, set-up, upgrades or services during your presentation. Piano delivery is a perfect example. Mentioning free delivery during your pitch hurts twice. First, it distracts from the presentation by taking the spotlight off the product, and then it eliminates the opportunity to add $300 in revenue later on.
Preparation also requires the physical presence of add-on items near your closing station. If you’re going to suggest a deluxe hard case, have one handy to show. High-margin accessories should be close to the counter and visible. Intangible service packages should be artfully summarized, laminated and ready to show. (It should be laminated, so it doesn’t become a hand out.) Also, certain packages should be available only at the time of purchase. Upgrades and services should be clearly written out on a “menu” to establish their value. The customer whisperer prepares his add-on offers well in advance and has them ready at the golden moment.
It is the responsibility of store owners and managers to package and merchandise add-on items. And salespeople deserve a premium if they sell add-ons with the initial purchase. After all, these are incremental sales and significantly increase profit.
Why We Fail to Add-On
If add-on selling is so easy and profitable, why don’t we do more of it? As we have seen before, poor salesmanship is largely the result of fear, laziness or both.
The fearful associate is happy just to have made a sale and is afraid that asking his client to go further might kill the deal. This associate fails to grasp the fundamentals of his clients’ decision-making process and should probably find another line of work.
The lazy associate is also happy (and probably lucky) just to have made a sale. He may be eager to get the customer out the door, so he can get back to his newspaper or the Internet. He should also be encouraged to seek employment elsewhere.
The customer whisperer knows his clients’ enjoyment of their new instruments will be greatly enhanced by all the best accessories and services available, and he will use his calm, assertive leadership to help guide them to happy ownership.
Next month, we’ll explore ways to get referrals, the world’s best source of new customers. Like selling add-ons, there’s also a golden opportunity to secure referrals. In the meantime, observe your clients’ behavior as they get ready to hand over their checks, and ask them to consider one more item, and then another, and another, and another ... MI