Want to make more money?
Then you need to find a way to get more sales.
Of course, that’s easier said than done… But it can be done.
You just need to think outside the box.
Today we are going to discuss five creative ways to increase sales volume.
You will surely find at least one idea that you can apply to your business!
5 Out of The Box Ideas to Increase Sales
You can use them to make more money per sale, increase sales volume, and generate more revenue.
Let’s take a closer look at each of them…
#1 Cross-Sell To Your Existing Customers
You have probably heard the terms “upselling” and “cross-selling” before. But what do they mean?
- Upselling is offering the customer a better version of the product. Remember how McDonald’s employees used to ask “Would you like to supersize that?” when you ordered a meal? That’s upselling.
- Cross-selling is offering the customer a complementary product. You know how McDonald’s employees ask “Would you like fries with that?” if you order a burger? That’s cross-selling.
Here’s how you can get started with it:
- Examine the products you sell. Which of them go well together?
- Once you have identified complementary products, make sure that when the customer decides to buy one of them, you also offer them the others.
It may take a while to get it right, but once you do, you will start getting more sales without having to do much to keep them coming in.
Example: Dollar Shave Club
You take their quiz, they create a custom box for you, then they ship it to you every two months.
They would send an email offering the customer relevant add-ons before shipping their box to them.
This allowed them to move more inventory without having to spend much extra time, energy, or money on it.
#2 Drop the Free Plan
The freemium pricing model is extremely popular.
You offer people several pricing plans, including a free one.
Back in 2010, a then-CEO of Evernote Phil Libin even told the Fast Company magazinethat “The easiest way to get 1 million people paying is to get 1 billion people using”.
But in 2015, the company’s growth started to slow down, and, as Tom Petrocelli phrased it a year later, it fell prey to the Catch-22 of the freemium model.
A few years after that, the media started talking about it being in a “death spiral”, with the New York Times doing a piece on Evernote’s struggles in 2019.
Think about it. Even the poster child of the freemium model can’t figure out how to make it work in the long run. It seems that this approach to pricing is not as great as we have been led to believe.
So if you have a free plan now, consider either downgrading its functionality or dropping it entirely.
This may seem scary. After all, once you drop the free plan, there comes the inevitable moment of truth. Do people value your product enough to pay for it?
But it’s better to face the reality, whatever it may be, than use an unsustainable pricing model to fuel unsustainable growth.
Hubstaff sells time tracking software for managing field and remote teams.
One of its co-founders, Dave Nevogt, wrote a great article “SaaS Pricing: Our Big Free Plan Mistake”, in which he shared:
“We had great expectations for our free plan and the users who signed up for it, but those expectations were never realized. Our free plan ended up losing us money and stunting our growth!”.
He argued that offering a free plan does not make sense for SaaS companies because of these four key reasons:
- Paid products carry more value. People are willing to pay for products that they value, so if they aren’t willing to pay for yours, then it isn’t providing enough value for them.
- Free users bring more free users. Having a free plan may help with word-of-mouth, but it won’t attract the customers you want. Someone using your product for free is likely to recommend it to someone else because it is free. So you end up with a growing user base, but instead of generating revenue it actually costs you money.
- Free users eat up support. People who sign up for your free plan are likely to be less tech-savvy than the ones who choose to pay for your product. This means that they end up requiring more customer support, which drains the resources that could have been spent on supporting the paying customers instead.
- People take advantage of free accounts. You may hope that once a free plan user hits the plan limits, they will upgrade to a premium plan. But guess what? They might also simply sign up for another free plan with a different email address. Kind of beats the purpose of offering the free plan in the first place, doesn’t it?
That’s why Hubstaff went from this:
Wait, what? There’s still a free plan? Why??
They decided to strip the free plan down to the bare-bones functionality, so that the user could try their software, but would have to pay for it if they wanted more.
Here’s how David Nevogt explains it:
“Today’s free plan is good for only one user and is labeled “lite” for a reason.
You get limited screenshot storage and user settings. This plan allows someone to try a limited version of Hubstaff for free, and if they like it the jump to a full solo plan is only $5/month.
In fact, this plan clocks in as our fourth-most popular in terms of total sign-ups. This shows us that there are people who value Hubstaff enough that they are willing to pay $5 more to have access to the full version.”
Now, in theory, this is still freemium, but in practice, it’s a completely different approach to giving away all the core functionality for free, then hoping that the user will eventually decide to upgrade.
That being said, it may make more sense for your business to drop the free plan altogether, then only reintroduce it if you see a genuine need for it.
#3 Experiment With Multiple Pricing Tiers
The price of a product doesn’t exist in a vacuum.
Potential customers decide whether something is cheap or expensive by comparing it to similar products.
You can use this to your advantage by offering multiple pricing tiers. That way, you control the frame of reference.
This works especially well with information products.
They are often perceived as less valuable due to being completely digital.
In the eyes of a potential customer, it doesn’t seem fair to charge so much for a product that doesn’t cost anything to produce (or, rather, create a copy of).
Plus, there’s also the fact that in their mind, a “fair” price for it is anchored to $0.99 Kindle ebooks, free YouTube videos, etc.
That’s why creating your own frame of reference is invaluable if you want to make more money from information products.
Not only it can help you get more revenue from each sale, but it can also increase the sales volume as well.
Example: Nathan Barry’s “The App Design Handbook”
When Nathan Barry released his ebook “The App Design Handbook” back in 2012, he had three pricing tiers:
- The book + resources at $39.
- The book + resources + videos at $79.
- The complete package at $169.
As you can see, even the cheapest package is priced pretty high, especially for an ebook.
However, due to the more expensive packages, the $39 option appears reasonable.
“At the very least these packages make $39 seem inexpensive.
People will always compare to something else, so you want to control what that comparison is made against.
After all, the last thing you want is a potential customer comparing your valuable content to the average $9 ebook. Instead, getting the visitor to compare between versions of your own product makes them more likely to purchase,” explains Nathan Barry.
This approach to pricing worked great.
“The App Design Handbook” did really well, generating $19,547 from 322 sales in 48 hours.
- The Book ($39) Units: 151; Revenue: $4,448
- The Book + Videos ($79) Units: 104; Revenue: $6,296
- The Complete Package ($169) Units: 67; Revenue: $8,803
Keep in mind that Nathan Barry was running a launch sale for most of that time (around 20% off) which is why these numbers don’t quite add up.
#4 Experiment With Decoy Pricing
Now that we have discussed the benefits of having multiple pricing tiers, it’s time to acknowledge one significant drawback:
Having multiple options makes it harder to choose between them.
This phenomenon is sometimes referred to as The Paradox of Choice which is the title of the psychologist Barry Schwartz’s popular book on the topic.
So how can you combat this when you are offering multiple pricing tiers?
One interesting approach that you may want to experiment with is the so-called decoy pricing.
The idea is that you have three price points, but only two of them are “real”, meaning you are only trying to get sales in those two tiers.
Meanwhile, the third one is a “decoy”, the only purpose of which is to drive the potential customer towards the most expensive option.
That way, instead of having to compare all three options, they only have to make one of these two choices:
- Between the least expensive option and the most expensive option.
- Between the decoy option and the most expensive option.
In the case of the former, it’s an easy choice because there’s usually a significant difference between the two options.
In the case of the latter, it’s an obvious choice because the decoy option doesn’t make any sense.
Either way, the potential customer doesn’t feel overwhelmed, so they are less likely to experience analysis paralysis and more likely to buy.
Moreover, the decoy offer makes the expensive offer look better in comparison, so the potential customer is more likely to see it as a great deal and make the purchase.
Example: The Economist Subscription Offer
Dan Ariely is is a professor of psychology and behavioral economics at Duke University. He is best known for his popular book “Predictably Irrational”.
In that book, he shares a now-classic decoy pricing example, The Economist subscription offer.
Take a look:
When Dan Ariely saw this, he thought it was interesting, since the middle tier, the print-only subscription, isn’t appealing at all. Why not just get the print-and-web subscription for the same price?
He conducted a study with 100 MIT students where he presented them with this offer.
16 of them chose the web subscription, 84 chose the print-and-web subscription. No one was interested in the print-only option.
But then Dan Ariely removed the decoy and presented another 100 MIT students with this offer:
As you can see, removing the decoy made the web-only subscription seem more appealing, so that’s what the majority of the study participants chose.
This wouldn’t be good for The Economist at all if these students were actually paying customers.
Take a look at how the revenue would have looked like:
- With a decoy. 16 sales at $59, 84 sales at $125. $944 from web-only subscriptions, $10,500 from print-and-web subscriptions. A total of $11,444 in revenue.
- Without a decoy. 68 sales at $59, 32 sales at $125. $4,012 from web-only subscriptions. $4,000 from web-and-print subscriptions. A total of $8,012 in revenue.
So it’s the same number of sales…
And the same two out of three plans…
But without a decoy, there’s a 30% decrease in revenue!
Now, keep in mind that this experiment didn’t give the students an option to not choose anything, so we don’t know for sure how this would have affected the sales volume.
Also, the researchers only tested removing the decoy, they didn’t test what happens when you replace it with a real offer instead.
That being said, it’s probably safe to say that the sales volume would have gone down in both cases.
As we’ve discussed earlier, the decoy simplifies the choice that the potential customer has to make, which means they are more likely to makethat choice, aka buy.
#5 Have a Generous Affiliate Program
You can hope that people will spread the word about your product.
Or you can incentivize them to do it with a generous affiliate program.
Offering them a commission on each sale they bring in through their affiliate link will make them much more likely to recommend your product to others.
Keep in mind that for this to work, you do need to offer your affiliates a great deal, because the higher the commission, the more effort they will put into generating sales for you.
Example: ConvertKit’s Affiliate Program
They offer their affiliates a “recurring 30% commission for every creator you send our way”. Sweet, right?
“We decided to pay a 30% recurring commission each month, rather than a large upfront commission, mainly because we didn’t have any cash and couldn’t cashflow anything upfront. That turned out to be a great decision since many bloggers want a predictable, recurring income source.”
This affiliate program accelerated ConvertKit’s growth and helped it get to where it is today (which, in case you were wondering, is at $2,147,644 in monthly recurring revenue).
They already knew what affiliate marketing was, had audiences they could promote ConvertKit to, and were open to the idea. It was a perfect fit.
It goes without saying that most businesses aren’t in such a fortunate situation.
Just keep in mind that in affiliate marketing, it literally pays to be generous.
You Need to Come Up With Innovative Sales Ideas!
“Do more of what works” is solid business advice.
That being said, it’s also important to continuously experiment to see what else might work.
It’s much easier to come up with innovative ideas when you stop thinking about them as big business decisions and start thinking about them as experiments.
Run a small test. Collect the data. Analyze that data.
Did it work? Great. Scale it.
Otherwise, learn what you can from it, then move on to the next idea.
This approach has a limited downside, but an unlimited upside, which is why it works so well.
And sure, most of these tests won’t produce anything worthwhile, but the ones that do will more than make up for that.
So start experimenting.