Increase your Average Transaction Value with upselling


21st April, 2021

Embed an upselling culture: Increasing your Average Transaction Value

Increasing your Average Transaction Value (ATV) is the quickest and easiest way for you to increase business turnover.

By finding ways to increase each customer’s spend, you’ll boost your bottom line growth. This is usually achieved through sales and marketing activities like upselling or cross-selling.

If upselling is done correctly, it can be seen as a way to surprise and delight your customer — a hallmark of customer service excellence. When combined with great customer loyalty, this kind of sales activity can be translated to long term business growth.

But are your staff capable of upselling? Are your processes and systems designed to maximise additional purchase opportunties?

Whether you’re running a café, hardware store, online shop or boutique professional services firm, understanding what your customers want and creating more opportunities to sell it to them will increase revenue.

You can easily track this activity by monitoring your Average Transaction Value.

Here are ten steps to increasing your Average Transaction Value (ATV).

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1. Understand where your ATV comes from

Your ATV is simply your sales over a given period divided by the number of transactions over that same period.

Your ATV will fluctuate over certain days. For example, in food retail the ATV is higher on weekends because people are more likely to shop in groups and couples.

Your ATV does not reflect how many people you serve, but rather how well you serve each customer. If you are busy, more often than not, your ATV will be lower because staff have forgotten to upsell. A well-trained team can still achieve high sales on a very slow customer day by simply upselling higher value items.

If you run an online store, you might consider how your website could be designed to create more opportunities for last-minute additions to the shopping basket.

2. Find POS reports

In every point-of-sale (POS) system, there will be a daily ATV in the Z report (end-of-day report).

Good POS systems will have detailed reports section in their back-of-house reports. You should be able to find the daily ATV for your store as well as the daily ATV of each individual on staff member. Become familiar with the reports you can access, and analyse them daily.

Already using MYOB? There are a number of POS providers available for you at the click of a button.

3. Analyse individual ATVs

If you’re managing a business that employs sales people, cashiers or anyone physically processing direct sales, you can assess individual ATVs to identify top performers and replicate their activity across the group.

Once you identify the ATV leaders, get them to share their successes with the team. Perhaps even ask them to mentor or train others in your team. Once everyone raises their ATV, your overall ATV increases.

4. Identify standard upsells

Most staff members fail to upsell because they simply cannot think quickly enough to offer items for an upsell.

Identify three sure-fire upsells that team members can use with any sale — upsells that will delight the customer and improve their experience in buying from you.

For example, in food retail upselling a bottle of water is always a winner because people know they should drink more water but simply forget to. If you work in hardware or landscaping, gloves are an easy upsell, and the customer always forgets they need them until they get home.

Train your team members in three upsell options only to make it easy for the salesperson to remember, and consider the price point of each of these in terms of how they may influence the buyer’s reaction.

Want more sure-fire pricing tips? Click here.

5. Train staff in how their ATV contributes

It sounds rather obvious, but not all employees that work in sales are experienced, motivated sellers. But a little understanding and insight into their ATV might be the easiest way to start the transformation process.

They may not know what an ATV is, what it means for your business, or how to begin making a positive contribution of their own.

Your business needs a tried and trusted service procedure that is deployed with every sale — no matter what business you’re in. Using an easy to understand metric like ATVs to start the conversation with your sales employees is a great way to maintain focus on this outcome.

6. Run staff competitions

There is nothing like healthy competition to increase your ATV.

Offer a prize to the staff member who increases their ATV the most over a given timeframe. Or perhaps offer a prize to the person who sells the most of a certain item.

Surprisingly the prize does not have to be big; it just has to be something that people aspire to have — the big Toblerone or tub of M&Ms works a treat, but avoid anything that could be considered an afterthought, or in any way offensive.

7. Set daily targets and communicate them to the team

The sure way to lift your ATV is to set a target for the team to aspire to.

Look over your ATV for the last three weeks. Calculate the average, lift it by 10 or 20 percent and voila — this is your new target.

Display the target where all staff can see it. If the team is reminded often, they will be more inclined to meet it.

8. Make the team accountable

Do you have a leadership team? Or a manager?

Having your team leaders report on activity on a regular basis will keep you in the loop of any sudden gains and losses, while also giving them the opportunity to be accountable for them.

9. Recognise and reward staff

Once you have identified your upsells, trained your team and run the competition, be sure to keep your team striving for excellence.

For example, you could name the top three upsellers each week; if they are on this list three weeks in a row, reward them for their excellence.

We humans love to be recognised and rewarded.  Sometimes it’s just the recognition we’re after. Never underestimate the value of a “well done” comment to a team member.

10. Make it part of a customer-centric sales culture

Embedding a sales culture of upselling should deliver increasing returns to your revenue over time. But it will only do so if it’s approached in a way that fosters and maintains customer loyalty as well.

After all, what’s the point of getting your customers to pay more if they walk away feeling they had a negative service experience?

This article was originally published in 2016.