"Do you want fries with that?"
But that one little phrase made them a lot of money because it increased the average ticket, the average dollars per transaction.
It makes intuitive sense that if every customer spends just a little bit more your store will be more profitable. That is why you want to track your Average Ticket.
In the last post we counted the number of transactions you had for the year. Simply divide your gross sales by this number and you have the Average Ticket. Now compare that number to last year's number. Did it go up or go down?
Simple knowledge of the world tells you that it should go up just to keep pace with inflation. Your prices went up a little so even if you sold the same amount of items to the same amount of people, that number should go up.
But what if it went down?
There are three big reasons why your average ticket might go down.
- You do not have the right merchandise.
- Your staff is not selling the merchandise you have.
- Your customers are in a hurry to leave.
THE RIGHT MERCHANDISE
If you do not have the merchandise customers want to buy, then they are not going to buy from you. That is simple enough. But one easily fixed mistake some retailers make is not having the necessary accessories to complete each sale.
This is something I preach to my staff constantly. Make sure that a customer making a purchase has everything she needs to use that product the moment she gets home. Is it an electronic toy that needs batteries? How about a model that needs paints... and glue... and paintbrushes... and thinner... and a display case?
If you do not sell all those accessories then you are leaving money on the table by not having the right merchandise.
YOUR STAFF IS NOT SELLING
At least the McDonald's clerks are offering more products with their fries statement. Are your sales staff doing the same? There are plenty of less offensive ways to do that. The first is to do what we just discussed - complete the sale. Make sure the customer does not have to make a separate trip to get everything she needs because if she does, it won't be to your store (and neither will the next trip she makes to shop).
You also want to keep asking the customer if there is more you can do. Keep asking until the customer says no. Here are some simple questions any sales person should be comfortable using:
- Who else is on your list today? (thanks, Bob)
- Is there anything else I can show you?
- What else can I do for you today?
It costs way too much to acquire a customer to let them walk out without being given every opportunity to buy. They will let you know when they are done shopping. Always let the customer end the shopping, never you.
YOUR CUSTOMERS JUST WANT TO LEAVE
It is a simple axiom of retail. The more time a customer spends in the store, the more money she will spend, too. So you need to encourage your customers to stay longer. You do that by making them feel more comfortable. Offer to take her coat. Offer her a beverage. Engage her in conversation. Get her to talk about herself. if she has kids with her, make sure their needs are met.
The right music, the right lighting, the right temperature are also important. If it is too cold your customers will not stay. Sure, you might save a penny or two in heating costs, but you'll lose all those pennies in customers who did not stay. Likewise, too hot makes customers just as anxious to leave. They may not even know why they want to leave. But they will leave. If you made a change in your thermostat to save some money and your Average Ticket went down, you might want to change it back.
Odors are also powerful drivers. Heavily perfumed areas can be as much a turnoff as bad odors. Don't mask the bad smells with perfumes, find the source and eliminate those odors. If you must use a scent, food scents are better than florals. They tend to be more comforting.
The layout of your store also affects the length of stay. Walk in your front door and see what captures your attention. Where does your eye go? Is there anything to attract a customer deeper into the store? The deeper they go the longer they stay.
Also look at your traffic patterns. Are the aisles wide enough to handle the flow? Do the aisles make sense? Is it obvious where to go? Confused people will not shop long. Do not confuse your customers.
Number of Transactions is something over which you only have partial control. Average Ticket is completely up to you. Whether it is going up, down or staying flat is a quick indicator of how well you are performing in the store. Raise the performance and you'll be punching a higher ticket.
PS For more on merchandising, download my free eBook Merchandising Made Easy. To raise the bar of Customer Service so high your customers are singing your praises to everyone they know, download my free eBook Customer Service: From Weak to WOW! The books are free, but the information in them is priceless. (Why would I give away such information for free? I want you to succeed. When one independent retailer improves, we all improve.)