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14 Ways To Increase Average Customer Spend

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14 ways to increase your average customer spend is the fourth video and article in this series for subscribers only, writes Robert Clay of Marketing Wizdom. And it’s the third of six ways you can turbocharge your business results.

Over the past 23 years I’ve done considerable research into what takes businesses into leadership in their niche.

In that time more than 600 established businesses have learned how to harness and apply these principles which has enabled them to outsmart the 98% of businesses that don’t.

It works!!!

My previous video took you through Conversion Strategies, the second of six ways to turbocharge your business results.

Increase Your Average Customer Spend

What if I told you that it takes the same time, effort and expense to generate a customer, regardless of the amount they spend? It costs the same whether that customer only ever transacts £100 worth of business with you, or £200 or £2,000.

What would happen in your business if you could get customers who used to spend £250 to increase their average spend to £300 or even £500?

Before showing you how to increase your average customer spend, here’s a quick reminder about all six Turbochargers, which will be covered over the next few articles and videos.

  1. Lead generation strategy
  2. Conversion strategy
  3. More spend per sale
  4. More frequency of purchase
  5. Setting the right prices
  6. More profitable sales

Master any one of the six profit turbochargers and you can achieve significant business growth. Apply your efforts to all six and each one has a compounding effect on the others. That could boost your revenues by 175% to 365%.

So, what is not to like about that!

Average customer spend Fact

How Much Does Your Average Customer Spend?

You probably know what revenues you generate, but do you know the size of your average customer spend each time they buy from you?

Well if you don’t, you’re not on your own!

Average customer spend average annual spend

You calculate the annual value of your annual average customer spend like this: Multiply your average spend per sale by the number of times your average customer buys from you in a year.

Even if you sell some products for £15 and others for £10,000, you can quite easily work out your average customer spend per sale.

Average customer spend Average transaction value

Just divide your annual revenues by the number of invoices you raised or transactions you completed in the same period. That gives you your average customer spend. As soon as you know that figure you can focus on ways to turbocharge it.

Let me take you on a journey to the Land of Plenty…

There are two different routes to getting there.

Average customer spend Land of plenty

Route 1 is to increase your prices. Alternatively you could take Route 2 which would be to make larger sales, for example, by upselling. Now imagine if you did both!

Route 1 – Increase Your Prices

The quickest and easiest way to increase your average customer spend is simply to raise the price of your products or services. However, entrepreneurs and businesses owners are often reluctant to do that for fear of losing their customers. In practice that fear is often unjustified.

Unless you’re selling an undifferentiated commodity that can also be bought from your competition, demand is much less sensitive to price changes than you might expect. Factors that make customers reluctant to switch allegiance just for the sake of price include the following:

  • convenience
  • habit
  • previous satisfaction
  • concerns over the quality of alternatives, and
  • the “better the devil you know” syndrome

Average customer spend price increase

A lot of businesses undercharge for their products and services, and most COULD charge more without losing customers, yet they don’t have the confidence to do it. The key question is … How do you justify the higher price to your customers?

Remember, if you offer a commoditised product or service your competition dictates your price. So, to increase your average customer spend or charge what you’re really worth, you need to positively differentiate your business.

In the minds of your customers, you could offer more perceived value than your competition. This could be achieved by for example:

  • improving the way your product is packaged
  • improving its quality
  • offering unique benefits
  • moving it further upmarket, and
  • educating your customers to better understand that value

Any of these things will likely help you to increase your average customer spend and they will be covered in more depth in future videos in this series.

Average customer spend BMW ultimate driving machine

The Ultimate Driving Machine

Another way to increase your average customer spend and achieve better prices is to develop a better marketing strategy. BMW exemplified this back in the 1970s.

They repositioned their cars as “The Ultimate Driving Machine.” They then spent £ millions on a series of successful advertising campaigns to drive that image into the minds of consumers. That allowed them to charge a premium based on the new perception of their products.

40 years later ‘The Ultimate Driving Machine’ is a philosophy that still guides BMW in everything they do. And that remains the case as they now diversify into:

  • electric cars
  • fuel cell cars
  • front wheel drive cars
  • mass-produced carbon-fibre cars, and
  • new niches that never existed before

The point is, there are dozens of ways to raise your prices, increase average customer spend or charge what you’re really worth.

Route 2 – Upselling

The second route to increasing average customer spend is to increase the average number of products or services you sell in each transaction.

Average customer spend diner

Think of a restaurant. Let’s say you come in for a main meal.

They might ask you if you’d like an appetiser and a drink while you study the menu. And there’s a good chance you’ll take up that offer.

The menu might then entice you to order a delicious starter. At that point they’ve already significantly increased the size of the sale.

When you go on to order your main course there’s a good chance you’ll also order one or more side dishes to go with it.

Then finally they ask you if you’d like a dessert, a coffee, or maybe more. And for many people that becomes the highlight of the meal. They would be disappointed if they were NOT asked!

Many Ways to Increase Average Customer Spend

There are MANY ways a restaurant (or any other business) can increase their average customer spend. The more they offer, the better people tend to perceive the service they receive. The secret is not to do it in a pushy manner.

Many successful restaurants train their staff to promote more expensive dishes or higher-priced wines. Or they might offer a free coffee with every dessert to entice the customer into spending more.

Similarly, if you can find ways to increase the number of items you sell every time someone buys from you, you too will generate a considerably higher average customer spend per sale. And that’ll soon translate into larger sales revenues and profits in your business.

Average customer spend offers

You may want to consider introducing more expensive products or services. Or offer a discount on a second product or service. Or offer an extra item at no cost to customers who purchase two products at the same time.

You only have to look at car manufacturers like Audi, BMW, Mercedes, Porsche and Land Rover to see up-selling in action. They persuade almost every customer to shell out thousands of pounds for various options like:

  • sports suspension
  • sports seats
  • satnav systems
  • aerodynamic body styling
  • cloth/leather trim
  • larger alloy wheels
  • adaptive cruise control
  • … and the list goes on

This principle applies equally to the services sector. Take Accountants as an example. When you first met with your accountant to discuss having your annual accounts prepared, were you offered additional services such as:

  • Preparation of VAT Returns
  • Bookkeeping
  • Self-Assessment Tax Returns
  • Investment Planning
  • Tax Planning etc.
  • … and how many of them did you buy?

Average customer spend strategy list

More Ways to Increase Your Average Customer Spend

Here are some other things you could do to increase your average customer spend …

  • Offers And Incentives
  • Point of sale promotions
  • Premises and appearance
  • Better customer education
  • Do business more selectively
  • Offer multiple payment methods
  • Offer more convenience
  • Better pricing strategies
  • Better sales techniques
  • Upselling
  • Cross-selling
  • Offer more exclusive products/services
  • Setting expectations better

Now that’s something to think about!

How Can You Increase Your Average Customer Spend? Please Comment Below

In what ways do you or could you increase your average customer spend? Please share them with us in a comment below. Similarly, if you’ve found this article on increasing your average customer spend helpful or you can contribute your own ideas, insights, perspectives and experiences, please add your comment below.

And if you have any questions relating to increasing your average customer spend, or you’d like to see specific topics covered in future articles to help you take your business to market leadership in its niche, then please let us know below.

This is Robert Clay. Thank you for joining me today and I look forward to sharing many more concepts with you that, when you put them together and execute them effectively, can take your business from arithmetic to geometric growth and to market leadership in its niche.

Please share your thoughts and add your questions to the comments below. I’ll try to provide as many answers as possible in my future online videos, seminars, workshops, masterclasses and blog posts.


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Robert ClayFor 25 years Robert Clay has helped hundreds of ambitious entrepreneurs to unlock their true business potential; cut their learning curve by 80%; put them 5-10 years ahead of their peers; and achieve 628% growth in 12 months or less. MEET ROBERT in this video and learn more about his journey from automotive innovator to business transformer.