Growing Average Ticket by Design
Our last article offered several examples of how just a small increase in your average sale can dramatically improve profits. However, many times when I discuss growing average ticket with framers, they admit that they are uncomfortable with the concept of “upselling” or purposefully trying to sell a higher-priced product.When I hear this, I know my first challenge in assisting the company to increase its profitability is by helping the owner change their views on how they serve clients.
If you change your focus from making a sale to great design, your average ticket (and profit) will soar
This is a perspective switch regarding the framing consultation from simply making a sale to offering your customers the best design, or as I like to call it design driving sales. For instance, if the focus of working with your clients is placed on making a sale, it becomes very difficult to overcome the anxiety of price. A sale only focus introduces a pressure to convince or persuade a client to do something that they may be reluctant to do. That’s why designers with this focus resist input on growing average ticket— it’s just added pressure to sell an even more expensive product.
Switch the focus from making a sale to great design:
Through my experience, one great way to overcome this anxiety of making a higher-priced sale is to switch the focus from making a sale to great design. If your entire focus is centered on creating something that is superior to any other design found in your marketplace, you will find that average ticket will soar and so will customer satisfaction. For this reason, I like to call growing average ticket “design-driven sales.” It makes sense. Clients come to independent framers for two primary things, great design, and preservation. If you can fulfill what they want, you will please your clients and also be profitable.
Design-driven sales are impacted by two things:
- The concept of design:
The ability to create a high-design concept is a genuine talent, also requiring experience and training. It should be a priority of every custom frame shop to execute their own documented design philosophy. A design philosophy documents the mental steps a designer goes through when creating a design. A common starting point is locating the focal point of the artwork and then basing design decisions around the enhancement of that point. By documenting these steps, you will create a consistency of design in your company.
In a competitive market like custom framing, design is an important point of difference. People come to a custom framer because they value their professionalism, expertise, and skill. Having a design philosophy enables you to communicate your unique selling proposition to your team and your customers.
- Using premium materials:
Using premium materials is also vital to design-driven sales. Our industry has seen tremendous improvements in the quality and preservation capability of materials in recent years. Maximizing the benefits these premium materials and offering them to clients is vital to customer satisfaction and to design-driven selling.
Computer-cut mats, intricate moulding finishes, conservation mounting materials, and glazing that protect valuables all improve the quality of design and offer clients options they may be unaware of. By regularly incorporating premium products into your designs you will improve the value of your service to clients. Premium products can dramatically improve average ticket.
How this affects Shop B
Let’s look at how this works with Tru Vue glazing options by using the sample business from earlier in the series Shop B. You may recall, from earlier articles in this series, Shop B has a habit of discounting too much, which lowers its average ticket. The owners of Shop B aren’t comfortable with their pricing and tend to resort to price cutting for fear of the competition. Design-driven sales are an ideal solution for this shop.
As a starting point here is a chart for the cost of a piece of 16”x20” glass in three different levels of product:
Shop B generates $150,000 per year and produces 833 framing projects, giving them an average ticket of $180 ($150,000/833). For simplicity, we will assume that all sales are 16”x20” in size. Currently, Shop B sells 25 percent of their projects with Premium Clear glass, 65 percent with Conservation Clear and 10 percent with Museum Glass, producing this type of profit on glazing.
Now let’s say that Shop B decided to offer Premium Clear glass only on highly competitive quotes and to hold back on discounting in general. The owners also choose to offer Tru Vue® Conservation Grade Glazing as the starting point for all other sales, and they create samples to show what the clarity of Museum Glass brings to designs. The change in design philosophy creates a shift in the percentages of the glazing they sell. Now shop B sells only 10 percent Premium Clear, 60 percent Conservation Clear and 30 percent Museum Glass. Here is what happens to company profits even though sales remain at 833 units.
This change grew earnings by 21 percent!
With this single change in design material emphasis, this company grew their earnings by almost $4,000 or 21 percent! This is a huge improvement in glazing profits just by emphasizing the benefits of premium glazing. Even more impressive is that this $4,000 of increased profit only raised the average sale of this company by $4.75! Yes, charging less than $5 more per project — while dramatically improving the quality of the products — placed an additional $4,000 in the bank for this company and gave the customer an outstanding product. Everybody wins. This is a huge improvement in glazing profits just by emphasizing the benefits of premium glazing.
Keep in mind that this increase is based just on changing the approach to glazing. Upgrading other materials and design features can add an even more, significant rise in profits. For example, the example we used with recommendations to Tru Vue Retail Makeover winner Sheri Wright showed how an increase in $18 for the average ticket could bring in an additional $22,000 per year.
The absolute most effective way of making your profits grow is to increase average ticket.
Instead of thinking about “upselling” or making projects more expensive, focus on creating better designs. Better designs are a result of your talent, training and design philosophy, and the use of premium materials that have fantastic benefits for your clients. Finally, track and monitor your progress. Measure your current average ticket, and then record it each and every day. Set a modest goal. Remember what just a $4.75 improvement can do and work on improving with these design-driven tactics. If you do, you will grow profits very quickly.