This post is the fifth in a series of posts entitled, "Digital Marketing Strategy For Startups, Small Businesses, and Entrepreneurs".
You're at the grocery store, about to checkout, when a Snickers bar catches your eye ...
You throw it on the belt without giving it a second thought.
Then you think, "Hmm, I need something to wash it down!", so you place a Red Bull on the belt as well.
The grocery store just increased your Customer Lifetime Value (CLV).
Most physical stores are very, very good at positioning tantalizing products at the Point Of Sale (POS).
Products that get us to spend just a few more dollars with the business and increase our CLV.
So, physical stores are very good at this, but what happens when you're selling products and services online and you don't have your typical checkout with a register, clerk, and tantalizing products surrounding it?
You need to use some basic strategy and thoughtfulness + the right tools and you can increase CLV at the POS with ease!
This isn't just for Ecommerce!
Before moving on, I want to point out that this isn't just for Ecommerce!
All businesses, to include physical & digital products, services, coaches, consultants, and SaaS, should focus on optimizing their POS.
Consider things like warranties, additional support, bundling packages and offerings, or even partnering with other businesses for referrals and commissions.
There's no better time to increase CLV than when a customer already has his credit card out and is actively buying!
POS Optimization Strategies
Before getting into the strategies, I recommend reading the article on Value Ladders because it will help you structure your offerings in ways to make POS optimization a breeze!
1) Pricing Tiers, Packages, & Bundles
Pricing tiers, packages, and bundles are great ways to increase a customers' order size.
By using a bit of pricing psychology, you're able to present offers in a way that appear "too good to be true" while simultaneously increasing the amount of money a customer is about to hand you.
Take a look at this example from a2Hosting:
The "Swift" package is a no-brainer ... for less than a $1/mo more you get unlimited everything.
Why would anyone turn that down? No one would.
How about the "Turbo" package? It's nearly twice as much as the "Swift" package; however, it offers 20X faster speeds and the A2 Site Accelerator!
We all know speed is important and it's still less than $10/mo ... so, I might as well swing it, right?
Here's an example of a bundle of physical products:
If you're doing laundry, you typically need detergent, dryer sheets, and maybe a little fabric softener every now and then!
Plus, if you purchased these items individually, it would cost roughly 30% more which makes the bundle a no-brainer!
2) 1-Click Up-Sells
A 1-click up-sell is an offer presented immediately AFTER the customer has purchased something.
This makes the 1-click up-sell incredibly powerful because the individual has already inserted their payment information and all it takes is "1 click" to add another product/service to their order.
1-click up-sells are a key ingredient in the Classic Sales Funnel models discussed in part 6!
Here's an example:
This is the page and offer an individual is presented with immediately after purchasing a survival folding knife.
The individual is already in the mindset of "I need survival gear" and has already purchased one item, so when they're presented with another item that's discounted no-less, it's a no-brainer!
3) Order Bump
The infamous "order bump" has risen in popularity over the last year or so due to the fact it works!
It's so simple too, which makes it another no-brainer to implement.
Here's an example of an order bump:
It's simply an additional, complementary offer made at checkout.
The customer only has to tick a little box to add the product or service to their order.
It's actually quite similar to the 1-click up-sell; however, it's made right before the purchase as opposed to immediately after ... but, they're both 1-click!
The Order Bump is typically easier to implement than the 1-click up-sell. If you're having a hard time figuring out a way to do the 1-click up-sell, try searching for a way to add an order bump to your checkout process!
If you offer a product or service that needs to be replenished - offering a subscription can be a great way to increase order size because it will automatically keep the customer coming back for more!
Here's an example of a subscription from the Youpreneur membership site:
In order to stay a member of the community, you're charged $59/mo or $599/yr (a bundle!).
Also note the yearly subscription is incentivized by offering the equivalent of 3 months free, a free t-shirt, and discounted rates to live events!
Here's another subscription example:
Each container of the supplement contains 30 servings, which makes the "Repeat Delivery Every 30 Days" option incredibly tempting because I won't have to remember to go order more and by offering an extra 5% off, it becomes a no-brainer.
5) Order Bonuses & Rewards
Have you ever seen a message like this while shopping online:
"Spend just $5.91 more and get free shipping!"
These are order bonuses/rewards used to entice customers to increase their order size in order to receive the incentive!
These are typically super simple to implement and freakin' work!
How To Implement
Implementing these various tweaks is not as hard as you might think.
For example, offering a package/bundle is as simple as bundling products/services you already offer.
Other options, like the 1-click up-sell, will depend on your platform. A quick Google search will likely yield some answers.
Conduct searches like ...
- [platform name] + 1-click up-sell or [platform name] + order bonuses. For example, shopify 1-click up-sell.
9 times out of 10, there is a plugin or add-on that will make whatever you're trying to accomplish possible.
Optimizing your Point Of Sale (POS) process is one of the most impactful areas to focus on because when a buyer is "in heat" they will keep buying until their needs are met or they run out of stuff to buy.
You never want the reason they stop buying to be that they've run out of stuff to buy. You need a plan and process in place to capitalize on the situation.
There are several strategies for optimizing your POS to include creating bundles, 1-click up-sells, order bumps, subscriptions, and bonuses/rewards.
Finding the right tool to make this happen can be as simple as installing a plugin or add-on or integrating with another shopping cart platform.