On average, it takes 84 days to convert a lead into a sales opportunity and a further 18 days to close the deal. Sales reps around the globe exhaust themselves trying to capture, seduce and lock in deals, which explains their readiness to succumb to any means necessary to close the deal and rack in the profits.
Although fast sales are devilishly appealing, taking your time and convincing your customer to commit to a longer contract can help you achieve your sales goals just as quickly and increase the deal value to both you and your client.
Good old fashioned persuasion is not the only tool under your belt that could help you increase the deal size. A combination of intelligent upgrade offers, upselling and add-ons can help you deliver the most value to your customer without compromising the company’s profits.
If you sell smart, you can increase your deal size to hit your sales goals easier. Below you will find five strategic ways to drive revenue by increasing the value and average deal size of your sales.
What is deal value?
Contrary to popular belief, deal value is less to do with the price and everything to do with what you and your prospect get from the deal. Ultimately, deal value is a matter of quality of your product or service. Customers are notorious for heckling sales reps for discounts and lower prices, which do not only hurt your profits but also leave dents in the way your business is perceived. It’s important to get a grip on discounts and how they will affect your profits. Your goal as a sales rep is to convey how your product will bring immense value to your customer so that the price becomes background noise.
You may do that by offering upgrades, upsells and a number of customized bundles that deliver the most value to your customer. If your client doesn’t receive superior value from your product, they won’t choose you, and you will get nothing. To increase deal value, shift the focus from yourself and zero in on the needs of your clients. This will not only help you increase your deal value and profits but will also improve sales velocity. The faster the client realizes the benefits of your product, the quicker they can make their buying decision and solve their problems.
Deal value is often confused with deal size. The difference is, while deal value focuses on what you and your customer will get out of the deal, deal size zeros in on the profit the sale will bring in. You may double or triple the sales size without any additional commitments from your end by cleverly persuading a client to commit to a long term contract, purchase additional features or upgrade to a higher-tier product. Essentially, you want to take your customer on a journey where you persuade them to spend more money on your product than they initially planned to.
Swap discounts for value-add extras
Customers will never pass on a sales opportunity to heckle you for a better price and although a strategic discount can often help your sales rep close a deal faster – it won’t be adding any value to your business. High value and premium price should go hand in hand, therefore dropping the price may reflect poorly on your business and convey a lack of confidence in the product you’re selling. So, before you succumb to the magic of a discount, justify the price by explaining how your product or service will benefit your customer’s business.
Don’t use empty adjectives to describe all the wonderful features of your product, tell your client how it will help them achieve their goals or overcome the challenges they face. Focus your conversations on the value your product will bring and your customer will spend most of the time thinking about how it will improve their situation and less time trying to wiggle out a better price out of you.
Also, any add-on extras you can throw in the deal that will cost you little or nothing at all can help you close the deal faster without compromising the price. A free subscription to an online training course that you host, an eBook on a relevant topic or an upgrade from one year to five years customer’s warranty would have a higher perceived value to the client and take you one step closer to closing a bigger deal.
Create multiple upselling options
Leading your sales pitch with value will set you up for upselling sales opportunities in the future. To help your customer extract more value from their purchase, sell them an add-on or complementary feature to a product they already love. The most efficient way to execute an upselling opportunity is to do it at the time of the purchase or through email marketing, by targeting your clients with closely related or complementary products. Once the value of your product is justified in your customer’s eyes, they will be motivated to upgrade to a higher tier to extract more value, even if it costs more.
So, offering small but significant upgrade features can help you increase your deal value. Some of the most seamless upselling ways to consider are, but not limited to:
Coaching and assistance: help your clients apply your product or service to the unique needs of their business. Not every product will work the same for every customer, so assist them in extracting the most out of your product by coaching and supporting them every step of the way.
Customization: every client is different and requires tender love and care, so offer to customize the purchase to fit their business model for a premium. Measure the number of premium products you can provide and stay flexible with the features your clients can buy.
Exclusive Content: Nothing beats the old fashioned exclusivity card, so offer premium webinars, training sessions and eBooks to help them master your product or service.
Opportunity cost of choosing lower price packages
Understandably, your clients may want to try out your product or service first, before committing to a large purchase. So, they will opt for the cheapest and lowest-tier of your product. They can get a sense of what your product is about. However, they do not get the full picture of what your product can do to help their business. Sure, they will be paying less and saving money, but they will also be losing money by missing out on opportunities because of the awesome features your product can offer at a higher price.
However, they do not get the full picture of what your product can do to help their business. Sure, they will be paying less and saving money, but they will also be losing money by missing out on opportunities because of the awesome features your product can offer at a higher price.
To increase deal value, ensure that your customer understands how each feature will add on to their performance and help them do better. It’s crucial your clients know they could be losing huge earnings opportunities by opting for the low-cost option. To get your customers to experience the difference, offer a free trial to test out the higher-tier features with their business. Bundles are also an excellent way to increase deal value, especially if you are looking to convert a newbie to a Pro user of your product or service. Instead of asking the customer to buy the features individually, offer a bundle which will give the illusion of a slight discount.
Bundles are also an excellent way to increase deal value, especially if you are looking to convert a newbie to a Pro user of your product or service. Instead of asking the customer to buy the features individually, offer a bundle which will give the illusion of a slight discount.
Remind that prices are not set in stone
As your business grows, so should your prices. It’s important to ensure your client understands that the price they are paying today is subject to change for a number of different reasons. Ensure your customers understand why prices may increase, and explain how the growth in price is used to bring more value to your clients. To increase deal value and land a bigger deal, offer to fix their prices in exchange for a long-term contract.
Once they understand why your prices may change, the idea of being protected from future price increase will motivate them to commit to a longer contract. As a token of gratitude or a gentle push to commit to a longer contract, throw in a month or two free of charge when they sign a long-term contract.
Increasing your deal size is the fastest way to achieving your sales goals. The techniques discussed above will help you edge closer to landing larger deals with little to no cost at the expense of your business. The safest bet is to secure long-term clients, although that may slow down sales velocity as it can take longer for customers to decide to commit. Avoid slashing prices and offering discounts wherever possible – that’s the poison that will keep you from achieving your goals. Master the techniques to emphasize the value of your product, not the price, and watch your revenue grow.