The concept is simple… Increase the amount of the initial customer purchase by offering discounts or other extra bonuses on quantity purchases.
What you want to do is encourage the buyer to spend more money by offering special inducements, extras, discounts and special deals. Some buyers are happy to buy consumable products by the case, rather than by single package, if they can save a little money by doing so. Just look at the success of stores like Costco. Much of their food items are bundled into quantities that are larger than those a typical family would buy. But often the price is just too hard to pass by. People end up spending more cash to “save” money.
Once you have a customer in your store, or browsing through your catalogue, your task is to maximize the value of that purchase. You want to make it easy for your customer to spend more than he or she originally planned to. And you want them to do so happily and without regret.
Your goal should always be to develop life-long customers. Therefore, whatever special deals you offer them should always be in their best interest.
Increasing the value of a purchase can be as simple as providing supporting materials or accessories that are natural and convenient additions to whatever the customer is buying.
An electrical supply store could offer booklets that guide homeowners to safely make minor repairs and installations. A store selling sportswear – sweatshirts, track pants and tee-shirts, could also offer socks or wind-breakers as extra accessories.
It could also mean scaling your prices according to the amount purchased. This works well with products that have large profit margins and where customers can easily justify getting more than one, such as with gift items.
There’s a fellow who sells single bottle wine stands at local fairs and shopping mall shows. The product is simply a single piece of wood cut on a sharp angle with one hole drilled right through, cut on the same angle. The weight of the bottle balances the board. It’s a novel idea that captures people’s attention. This marketer sells one wine stand for $5 or two for $6.50. He sells far more packages of two than single unit sales. Why? It’s such a great deal, few can resist. An extra buck and a half is mere pocket change and there’s always someone the buyer could give it to.
Think of supermarket pricing. Where I shop, the price of bundled green onions is 3 for 99 cents. There’s no price listed for just one bunch. Guess what? Most people that buy, take 3 bunches for 99 cents. Why? It’s a perceived special price on a quantity purchase. The actual value may even be irrelevant. People often assume that it’s a better price for three than for buying just one. Here’s how the thinking goes. “Maybe I’ll be charged 50 cents for one. Buying 3 gives me each for just 33 cents. That’s better value, so I’ll buy 3”.
You can often encourage customers to spend more by offering an attractive discount on a second or third similar product. This could work well for businesses whose customers would like to buy more than one. A good example would be a ladies shoe store. Such a business could significantly increase sales by offering a second pair of shoes at 15% off.