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Click Here For Episode 4 Video - Add On Sales

By Gregg Frederick

Editor's note: Gregg Frederick, CSE, MBA, is the principal of G3 Development Group, Inc., a consulting service that focuses on engagement through business development, retail development and human capital development. Follow Gregg on Twitter @g3leadership and on Linkedinwww.linkedin.com/in/greggfrederick

A key to growing your profitability is to perfect the art of the add-on sale. Whether in wholesale or retail sales, the most successful salespeople are those who add value to the customer experience by providing the customer with the product they need to enjoy the ride from day one.

As a retailer, providing a superior customer experience (CX) allows you to meet the expectations of today and tomorrow's consumer. The Retail Remodel projects that we've done with Bicycle Retailer, 3 Dots Design and Merchandising Werx have allowed us to create a visual environment that is conducive to creating a superior CX, but at G3 Development Group, we work with the retailer to maximize the CX by training the retailer on ways to engage them in-store and online.

To start on your CX journey, you must define the emotional outcome you want your customer to have when they leave your store. Everything you do and every product you have should have a purpose leading to that outcome. When your products complement the CX outcome that you've defined, you are on your way to maximizing the CX through the add-on sale.

To maximize the add-on sale, the Units-per-Transaction (UPT) calculation should be tracked. You should incentivize your sales staff on UPT goals. For one of our clients, we were able to get UPT from 1.75 to 3.75 in three months with a goal UPT of 4 (for every bike sold, there should be a helmet, lock, bag, cage, pump, lights, shoes, gloves, etc., suggested to go with it). Along with the growth in UPT, we saw an increase in P&A margin of 7 percent!

UPT is so important to us at G3DG, that we've influenced one of our brand clients to create a hang tag with a checklist of aftermarket products listed on them as a reminder to the retail sales person and the retail customer to not forget those high margin necessities that enhance the riding experience, i.e. the customer experience.

Like it or not, Amazon has mastered the art of a comprehensive shopping experience and you can take advantage of some of their best practices to increase add-on sales. The easiest to take advantage of is their ability to provide great recommendations on related products, also known as "affinity sales."

A well-merchandised store takes advantage of these affinity sales by grouping like items together. For example, create a well-merchandised area for inflation so that during the sales process your trained sales people can walk the customer through the necessities that will make their riding experience seamless, like floor pumps and CO2's. You can also do the same for apparel, helmets, locks, lights, shoes and socks.

We've seen tremendous success at retail using accessory sales packages as a way to create sales velocity around add-on sales. With a three-tier package, you can sell the cycling essentials together (helmet, lock, bottle and cage) at a discount over buying them individually, driving up UPT and gross margins.

Finally, up selling should not just be for the sales staff. The importance of using the service department to drive add-on sales should be a main part of your CX strategy. According to Joseph Michelli, the author of Driven to Delight, the lifetime value of the Mercedes Benz customer is linked to the customer's willingness to maintain a relationship with its service department. For many IBDs, the service department is often an afterthought, but has a huge potential to drive add-on sales through service packages.

According to Forrester Research, 90 percent of sales still come from physical retail locations, but the gap between meeting today's customer expectations at the IBD and what the customer receives online, is widening. With a focus on the customer experience, a highly trained sales staff, focused sales goals that include UPT tracking, and creating sales velocity around service and accessory packages, you will be able to drive your profitability through increased add-on sales.