Hi all,
today i would like to share with you an experiment we (me and a client of mine did)
This client is a founder of a brand in Malaysia and her brand has been around for quite sometime (close to 5 years)
She has a lot of products line and she also has a lot of customer's database as well.
Her problem was she was stuck with one figure and wasn't moving up in-terms of sales.
Upon discussing with her; we realise that though she had a lot of 'customer's database'; many were not repeating orders from her every month. They only purchased probably twice a year because most of the things she sold were cosmetics.
So although she makes a consistent amount of sales monthly; it wasn't the same customers buying from her.
When i asked her what her per invoice sales was on average; she said it was around RM 150. Her aim was to double up her revenue next year and so we started planning. (current revenue at 10mil a year)
If there was something that i learned from Jay Abraham ( Author of Getting Everything You Can Out Of All You've Got; one of my many virtual mentor); he said that there was only three ways one can increase their revenue:
- Increase the number of customer
- Increase the average transaction per customer
- Increase The frequency an average customers buys from you.
Since this client of mine was already at the saturation point where the same amount is sold monthly for close to a year now; we decided to test out the (2) and (3) theory.
Now since the customers database was already there; it wasn't that difficult to up-sell them with something else. Since they were already purchasing makeup; surely they will need other things; such as skincare too.
So the next thing my client did was to ask her current customers; what were the problems they were facing and turns out; they had 'dry' skin.
So what we did was we produced a cleanser and a moisturiser that was specifically for dry and sensitive skin; took me a bout a month to come up with the whole R&D and once ready; my client gave her customers that as sample and collected testimony.
Less than a month later; she started selling the real pack size; and guess what? All 10'000 pcs sold out within a day! And the next pre-order was already on its way!
But the best thing; when i asked what was per transaction sales like; it had increased by RM 75 to RM 225. Thats 50% increase by just adding 2 new product line to current existing customers!
But that wasnt it! Since this time her addition was a skincare; she mentioned that her customer were purchasing more often; ie instead of twice a year; its 4 times a year.
Now you do the math; what kind of increase is that? 50% in average transaction, and double on frequency of transaction! Just by adding 2 product line; im sure she will be making RM 30 mil next year (200% higher than this year)
The best thing is; it doesnt just end there.
The last time i spoke to her we have decided a whole 5 years plan of product launch so that once she covers all skincare; she will go for haircare, baby care and men care. Its the same customer buying! only instead of buying just for herself (the customer alone); she can buy for everyone else in the house too 9husband and kids) :-)
Im just so glad we did this little experiment because i could actually share it with you especially those business owner's whose been stuck for a while now.
Just remember that its not always about looking for new customers; sometimes by just tweaking things; you already can make the sales with the current customer you have:-)
Just imagine instead of this route my client focuses on looking for new customers (just like what all the other business does); that like needing to get 100'000 new customers to get the same amount. Compared to just adding cleanser and moisturiser into the product line. Which do you think is easier:-D
I hope this experiment helps you a little too:-)
If you are stuck; and for those of you who have an existing cosmetic or skincare business and wants to expand but not sure what products you should go for; feel free to email me here for a chat.
Till then; good luck..
Nisha
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