Increasing the average check in a store is one of the ways to increase business profitability without increasing the number of customers. In this article, we will consider strategies and approaches aimed at increasing the average check in a store.
What is the average check?
The average check is an important indicator in marketing and business analytics, also known as the "average check per purchase" or "average check per transaction". This indicator determines the average amount of money that customers spend during each purchase or transaction in a store, restaurant, online store, or any other type of business.
Formula for calculating the average check
Many entrepreneurs wonder how to calculate the average check. The calculation formula looks like this:
Average check = Total sales (amount of revenue for a certain period) / Number of transactions (checks at the cash desk)
In other words, if you divide the amount of store sales for a period (for example, 1 month) by the number of customers (checks) in this period, you will get the average arithmetic amount of the check. This is the amount that customers leave in the store on average.
This is the simplest formula for calculating the average purchase amount. You can also include the service ratio or the ratio of store visitors to those who purchased something.
However, let's take a closer look at how to find out the amount of the average check and how to increase the average check?
The Torgsoft program allows you to quickly find out the amount of the average check for the required period. The Analysis mode → Analysis of the number of receipts by amount will help you to classify the number and amount of receipts by the amount of sales, analyze the share of large and small purchases in the total amount, etc.
Why do I need to know the size of the average check?
The average check is not the only parameter that shows and influences sales efficiency. However, it allows entrepreneurs to understand how profitable their business is and what the average cost of purchases from a certain customer base is.
Understanding the average amount of revenue for a period (day or month), an entrepreneur will be able to assess important business indicators.
1. Evaluation of staff performance
By comparing the "average" checks of different shifts of salespeople or different consultants, you can establish patterns in their work and draw useful conclusions - who is a salesperson and who is just a cashier or security guard.
The Torgsoft program has the option "Linking sales of each product to a salesperson", which allows you to recognize salespeople for personal sales, and evaluate the contribution of each employee to the overall result. It is also extremely necessary if consultants work in the sales area, and sales are recorded at the checkout.
2. Increase in profits
An increase in the average check can help increase business profitability. Knowing not only the size of the average purchase per day or month, but also its composition, you can determine what sells better: goods individually or in sets - for example, a pencil case with a pen, pencil, eraser, ruler, or everything separately?
You can view the profit in the Torgsoft program in the Analysis → Period mode to evaluate the business, manage data for the month and analyze the overall picture of the retail network or point of sale.
3. Analysis of the effectiveness of marketing activities
The average check will help the owner to build a loyalty system in the store that will encourage customers to make repeat purchases.
When an entrepreneur intends to introduce a system of accumulative discounts, bonuses, or offer a promotion for a certain group of goods, he often does not know:
- "What is the best amount to issue a discount card?"
- "From what amount can I start giving a discount?"
- "What percentage of the discount to set?"
- "What price should I set for a promotional item and what products should I add to the promotion?" etc.
- The answers will be individual for each store, and many questions can be answered by the average check.
How to increase the amount of the average check?
Naturally, the owner wants to increase the profit of his business. What should be done for this? Increasing the average check is one way to achieve this goal. However, raising prices for the product range or increasing margins and importing expensive goods is not always the only right solution.
To increase the average check in the store, use the following marketing activities:
Cross-Selling
Selling related products to the main product is an affordable and universal method of increasing the company's profitability. Offer customers additional products or services that meet their needs or complement their purchases. A classic example is to offer a protective glass or case for a smartphone.
By the way, this scheme of increasing the amount of the average check is quite skillfully and actively used by pharmacists in pharmacies, offering visitors to add some medicines "for all occasions" to their home medicine cabinet in addition to the main purchase. It seems like a trifle, but it has an impact on the average check.
Steps to help you achieve your goal
For a traditional offline store, observe customer behavior: what does the customer pay attention to, what is their interest?
- Find products that will complement or improve the customer's needs.
- Think in advance about combinations and combinations of such products and convenient situations. For effective sales, organize the assortment and upsell products in advance.
- Organize merchandising. The minimum is a good display of products on shelves or stands. Be sure to place related products with high-margin products. For example, put sour cream or sauces near the refrigerator with dumplings, and fruit or chocolate pastes near the rack with buns.
- Analyzing the average check in an online store will help you identify a group of products that are best combined and sold in sets, which will be discussed below. The Torgsoft accounting program will also perfectly cope with this task.
Upselling
The previous method - upselling of related products - stimulates the purchase of more than planned. Usually, this incentive is achieved by quantity - you sell more units of goods and thus increase the average purchase check in the store.
Upselling is a way to increase the average check by selling more expensive versions, models of goods, or additional services. Offer customers higher quality products. For example, if a customer is considering a laptop, show them a similar but more powerful version.
Such promotions raise the average check well: "Subscription for a year", "Discount from 1000 UAH", "We will deliver for free when buying for the amount of ...", etc.
However, such techniques work under two conditions:
1) if you buy a larger quantity, the price per unit will be lower,
2) the offer must be adequate and meet the needs of the buyer. In the case of a laptop, it would not be appropriate to offer a model with a higher price for a Linux operating system if you are sure that the client is a fan of Windows.
It is also important to offer the customer to buy a more expensive product after the manager has worked out all the objections and the customer has made the final decision to buy.
Volume Discounts
Encourage customers to buy more by offering them a discount on goods or services when they buy a large quantity.
Classic examples of promotions: "Cheaper in bulk", "3 for the price of 2", Discount for the second item on the check, discounts for VIP customers, Birthday discount, for the quantity or the amount of the purchase...
Calculate how much you can reduce the price per unit of goods to benefit both you and your customer.
Before launching promotions or special offers, test them to find the most effective ones. In the Torgsoft program, you can set promotional conditions for certain groups of goods or customers. When selling, the program will calculate the discounted price automatically.
Loyalty programs
A loyalty program is a system that encourages customers to make repeat purchases by rewarding them for previous purchases or certain user actions. Rewards can be given in the form of discounts, bonuses, or gifts. According to experts, a well-thought-out loyalty program can increase the average check by 30%.
Bonus systems or loyalty cards partially inform about sales statistics, which can save up to 20% on marketing research.
Bonuses are usually equivalent to cash currency, so for customers, they are additional money that can be used to pay for repeat purchases. When a customer accumulates a sufficient number of bonuses, they can use them to get a discount on their next purchase or another bonus, such as free shipping.
Bundling, or selling kits
Customers love ready-made solutions, so don't make them search for everything they need in store departments or on the pages of your online store. In addition to the purpose of selling additional items, ready-made compositions themselves increase the chances of a purchase many times over by simplifying the user's path in the store.
Offer bundles of products or services at a discounted price that would normally cost more if purchased separately. For example:
✔️a shaving kit with a razor, shaving gel and aftershave,
✔️a set for dry and sensitive skin, which includes: cleansing gel, toner and day cream,
✔️a furniture set in a furniture store,
✔️items for shoe care: shoe polish, shoe spatula,
✔️special microwave dishes, etc.
Many devices require consumables, care or protection products, fittings or accessories, and other "frills". In home appliance and electronics stores, these are cords, cables, connectors, cases and bags, memory cards, stands, spare light bulbs and batteries.
There are many opportunities for online stores. Show 3-5 most popular products in a prominent place or new products, products that are bought along with the number of views.
Personalization
Use customer purchase data and preferences to offer products that meet their individual needs.
The online store system can track what a person put in the cart last time and offer to repeat or buy products on the topic. Set up an automatic discount offer when a certain amount is reached. Set up an automatic discount offer when a certain amount is reached.
Offer gift certificates or cards. This way, you can make quite large sales to corporate customers in your area.
Support services
Offer support services that can be related to the purchased goods. For example, product warranty service, software training, assembling equipment or furniture, installing a program, etc.
Time-limited promotions
Encourage customers to buy now by offering limited-time discounts or promotions. It is advisable to set a promotional period of at least 14 days to make sure that the goods will not be returned.
Optimize pricing
Analyze your pricing, you may be able to increase prices for some products that customers are willing to pay more for, but keep prices for other products low to attract customers.
Improve the quality of service
Additional services for customers and good customer service can also have an impact on the average check. Improving the service and quality of communication with customers can convince them to buy more expensive products or additional services in the long run. Check the readability of price tags, the work of managers who take orders, organize uninterrupted delivery of goods to the sales floor, shipment, payment at the checkout without queues, and so on.
If you have an online store, check the speed of page loading, website navigation, product cards, and data accuracy.
Automated sales process management significantly reduces the process of selling goods at the checkout and increases customer loyalty.
In this matter, you can't do without training salespeople. Conduct focus groups or training courses to teach them how to sell expensive goods and how to deal with customer objections. Make sure that employees know the assortment, are familiar with new products, and are not afraid to communicate with customers.
Selling more products
This method has shown itself well in markets when sellers round up the amount of the check and add more goods by weight. For example, "I don't have any change, let me weigh you 20 UAH worth of apples?" In reality, more goods are only in the eyes of the beholder. In fact, you get more money and sell less goods. However, do not abuse this method.
Sellers' motivation system
If you notice that your salespeople work better under pressure, this is a signal that they are not interested in their work. You need to set up an incentive system so that each employee feels a personal need to increase revenue and the average check in the store.
In the Torgsoft program, you can calculate the individual revenue of each seller and maintain a system of surcharges, take into account the effectiveness of the sales team, calculate the rating of each employee based on their personal sales results, rewards and penalties.
Don't forget that the effectiveness of different strategies may vary depending on the specific business and its audience. Experiment, analyze your data, and adapt your approach to achieve maximum results.
