Episode 163: 5 Ways to Increase Revenue This Holiday Season with Tracy Matthews
The holidays are a great time to make extra sales and you'll hear 5 PROVEN ways you can increase revenue without ads or social media with simple actionable steps you can take today!
Here’s What We Cover and More:
Definition and importance of AOV (Average Order Value) in increasing sales
Avoid underpricing and set proper markups
Upselling complementary items
Bundling best-sellers
Offering customization options
Free shipping thresholds
Gift-with-purchase offers
Tiered discounts (Buy More, Save More)
Manual text outreach to thank and upsell
Attract quality buyers without over-discounting
Tracy’s podcasts and book for more strategies
This holiday season, don’t just sell—strategize! Tracy Matthews reveals five genius revenue-boosting hacks: upsell like a pro, bundle for irresistible deals, and sprinkle in some personalized magic. Ditch discounts and focus on perceived value to attract premium buyers who love what you offer. Remember, a little creativity and human touch go a long way to turning shoppers into loyal fans!
Product Businesses! Download my free HOW TO GET INTO A GIFT GUIDE/PRODUCT ROUND UP roadmap for free HERE to get more sales and traffic to your site this season.
If you want to land your first feature for free without any connections, I want to invite you to watch my PR Secrets Masterclass, where I reveal the exact methods thousands of bootstrapping small businesses use to hack their own PR and go from unknown to being a credible and sought-after industry expert. Register now at www.gloriachoupr.com/masterclass.
Resources Mentioned:
Join the PR Secrets Masterclass
Join the Small Biz PR Pros Facebook Group
DM the word “PITCH” to us on Instagram to get a pitching freebie https://www.instagram.com/gloriachoupr
Connect with Gloria Chou on LinkedIn https://www.linkedin.com/in/gloriaychou
Join Gloria Chou's PR Community https://www.facebook.com/groups/428633254951941
Visit Tracy Matthews’ social media pages: Website: https://tracymatthews.com/
Instagram: https://www.instagram.com/tracymatthewsny/?hl=en and https://www.instagram.com/flourish_thrive/reel/DCCxRfKhaTg/comment-secret-to-get-access-to-our-sales-on-repeat-private-podcast-which-launch/
LinkedIn: linkedin.com/in/tracymatthewsofficial
Book: https://desiredbrandeffect.com/
Podcast: https://pod.link/1050430716
Private Podcast:https://www.flourishthriveacademy.com/sales-on-repeat/
Additional Resources:
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Transcript
00:00:00 Gloria: What's up, small business heroes? Welcome back to Small Business PR where we make marketing and PR super accessible. Now, as you know, I love products and I love jewelry. And I have my friend, Tracy Matthews, here. She is the founder of Flourish and Thrive Academy. She also has her own podcast, Flourish and Thrive. And she is all things expert in product and jewelry. And we're going to talk all things about how to increase your average order value, which is what we want as product owners. So welcome to the show.
00:00:31 Tracy: Thanks so much for having me. I'm excited to talk about this topic.
00:00:34 Gloria: So I'm so excited to geek out about pricing. And I know that for women listening, it can become… It can be, like, emotional, right? Like pricing, but I'm going to bet that after this episode, we're gonna have some very actionable and objective ways that we can increase the pricing of our stuff. So can you tell me a little bit about, what is, for the people who don't know, what is, average order value?
00:00:58 Tracy: Okay, so we're gonna talk about increasing average order value across any sales channel, but primarily we're going to kind of focus on a website, but this can be pretty much done anywhere. And there might be more than three, because the first thing that I really want to talk about is the pricing, but your average order value is just the average of all the orders that you sell over a period of time.
00:01:19 Tracy: So if you were to take all the sales, the number of sales that you made over a 30 day period, divide that by the 30 days, then you would get your average order value. And that average order value is something, is one of the easiest things to increase if you want to increase your sales over time. But a lot of people don't think about that because they're just focused on selling product, selling product, and selling product. And instead of, okay, how can I maximize each sale that I get to get the most out of each customer?
00:01:50 Gloria: That's so good. I mean, that actually is where all the successful businesses are focusing on, especially in this economy. We know that your current customers are way more likely to buy from you. So I love that you looked at it not in terms of number of new customers and just getting everyone through the door like a McDonald's, but how do you actually increase that? So let's get into, I know you're going to share at least three tips on how we can get that average order value up.
00:02:13 Tracy: Well, before we talk about the three tips, I want to talk a little bit about product pricing. I see that one of the things that a lot of, at least female founders do is they feel bad about charging their worth or what the product is actually worth initially from the get-go. I work primarily with jewelry business owners and luxury product goods. What I see time over time is that a lot of people are underpricing their work and they don't even know that they're underpricing their work.
00:02:45 Tracy: The reason that I believe this to be true is because of platforms like Etsy who came on the scene and it's a race to the bottom to be the most affordable product. Well you are never going to be able to compete with Walmart or Target or any of these big box stores that are at the race to the bottom because they're selling volume. And so instead of positioning your brand as the most affordable or affordable luxury or any of these things that you see over and over again or pricing too low, thinking that that is going to be the thing that's going to make you sales.
00:03:16 Tracy: Instead, I want you to think about pricing it and being able to communicate the perceived value of your product. Most makers out there, most people out there, most product business owners, depending on the type of product, you want to at least see a direct to consumer markup of three times the cost of the product. So if something costs $10, you want to be charging a minimum of $30 on the market for that and sometimes a four times markup. It really depends.
00:03:44 Tracy: But if you're not doing that, and you're only getting a double markup, which I think most people do when they don't know anything about pricing products, you set yourself up for a lack of profitability over the long haul because everything that comes out or everything that you use to run your business comes out of that tiny little double margin. So that's the first thing that I wanted to talk about. Now, the second thing, now I want to, can I dive into the tips to increase your average?
00:04:12 Gloria: Yes.
00:04:13 Tracy: Okay. So first things first, you need to calculate how to increase your average order value. If you don't understand how to do that, it's an easy thing to Google, but you just want to take, as I mentioned earlier, the average number of sales. So let's say you had 100 sales a month, you sold $5,000, divide that, and that gives you... What does that give you? Like $50 average price point for your product. So that would be your average order value.
00:04:37 Tracy: And what we're trying to do is to increase that over time because think about how easy it would be to build your business if you were able to take that $50 price point and get it to $75 or get it to $100 without having to do much extra work, except setting up a little tech or having some sort of system to follow up with people after they purchased.
00:04:59 Tracy: So the first thing that you can do to increase your average order value is use an app on your Shopify store, one of these other stores that either upsells additional products or suggestive sells additional products. Here's what I mean by that. These apps, you've probably been shopping on some of these bigger brand websites where you've been looking at a bunch of different products, you don't put them in your cart.
00:05:21 Tracy: In the bottom of the website, it will often show you everything that you've looked at. You might also notice that you start to see, you might also like based on a product that you're looking at. That's technically an application that is trying to get you to see other things that you might like. So you add multiple items to your cart.
00:05:41 Gloria: Another way to do this is when you're checking out and you've probably seen this a lot with skincare or supplement companies. I feel like they do it really well is, you check out, you buy the thing that you want or makeup, and then all of a sudden they're like, you might like this eyeliner. You might also like this anti-wrinkle cream. You might also like these other things. And it's like, buy three for the price of one. And yes, they are discounting.
00:06:05 Tracy: But the reason why they're doing that is that they know if they can get you to buy more items, the chances of them, number one, making more money, but also increasing your stick rate as a customer becomes so much higher. So consider upselling your customers something that's a little bit less expensive than what's in their cart, but also coordinates with that item. So it's fairly easy to do and to think through the lineage if you're, especially if you're selling, like a skincare or makeup or something along those lines, because there's logical things that go with that.
00:06:36 Tracy: But let's say you're selling something like jewelry or clothing or something else. Think, if someone's buying a necklace, maybe you upsell them the matching earrings or a matching bracelet. That's an easy natural progression that someone may have not seen as they're going through the checkout process. So number one, upsell. That's a really important strategy. And you're probably not going to get the majority of people taking it. But if you had a 20% uptick in sales, or 25% of the people, 20 to 25% of those people taking it, you're actually increasing your sales by 24%, 25% at that point.
00:07:14 Tracy: The next thing that you can do is bundle offers together. So one of… this is like a psychology thing. When someone feels like they're getting a good deal, not that it's discounted or on sale, but like, let's say you partner two of your bestselling pieces together. You see this in a lot of industries like, buy the face cream and the eye cream or buy the earrings and the necklace together, and when you buy them together, it's value, priced as a package deal.
00:07:41 Tracy: You're not positioning it as a discount. You're positioning it as a set. People can look at it and be like, Oh, yeah, I love this together. It makes it really easy because especially if you're bundling things like your best-selling products, then people will be gravitating towards those best-selling products and they'll just want the other thing, especially if, for some reason, they're getting a better deal by buying the two pieces together.
00:08:07 Tracy: And so the psychology of bundling is that you're not necessarily calling it a discount, but they're getting some sort of better offer from buying that. And over time, if… This is a great thing to do during the holiday season, during any, sort of like Valentine's day, Mother's day, anything where people are buying gifts, because they want to buy a set. And if, maybe let's say your earrings and your necklace or your two pieces of skincare or the makeup set that they're buying is a little bit more expensive buying the two pieces separately.
00:08:39 Tracy: If they can see like, oh, I really only wanted to spend $100 and buying them separately was $125, but you can bundle the gift set together at $110. An additional $10 probably won't break the bank, but it's also going to add you so much more to your order value. So that's the second way. First way is upsells. Second way is bundling offers together.
00:09:01 Tracy: Now, the third thing that you can do, which a lot of people don't think about, and this is something that's really easy to do, especially on the Shopify platform, is to offer some sort of easy type of customization. That might be adding an extra gem or adding initials or adding engraving, something like that, where they can upgrade a small amount for customization or personalization that costs anywhere from 10 to $20. It's not a very expensive thing to add on.
00:09:34 Tracy: But if you have a product that can be customized, this is a great way to add on extra sales. So think of if 50 people out of 100 people added an extra $10 to your cart, you're making an extra 500 bucks. That's awesome, right? So this is a great way for you to just keep making more money over time and being able to offer people something that they actually want in addition to what you're already offering them.
00:10:02 Gloria: So good. That was a masterclass. I hope whoever's listening is taking notes because all of these things, like I am guilty as charged. I literally, today went to get one thing and then because I saw the bundles and the sets and the add-ons and the little sidebar thing, my cart order value was a lot higher. Just like when you go to Target and you end up getting everything. So this absolutely works and it's so brilliant.
00:10:26 Gloria: The part about the personalization is really new. I've never heard of that, but I think that's also really brilliant because people do love personalization. And if you're already spending X amount of money, it's so easy to have a one-click option for them to do that. I love that so much. So we talked about pricing, we talked about the bundling. Is there...
00:10:44 Gloria: So you've worked with so many jewelry makers and product makers. Do you see that the more people raise their prices, the more they sell? Or is that just a mindset thing that I subscribe to? That's not true.
00:10:55 Tracy: I personally am not a bargain shopper. So it depends on who your audience is. Like a lot of, there's a psychology of marking things down that people think that if they put things on sale or charge less for it, that it's actually going to drive more sales. I would beg to differ that the opposite, it quite happens. The way that my brain thinks is that if something's on sale, there must be something wrong with it or it's not selling, so it's not good.
00:11:23 Tracy: So why would I want to buy something on sale unless it was something that I actually was waiting to buy and had it on a wish list or something like that? So I highly recommend not thinking that lowering your prices or putting things on sale is actually going to be a driver of sales. If you are able to charge a more premium price, I'm not saying overcharge, but charge a more premium price for what you're doing, and you're able to communicate the value of why your products command that price point.
00:11:54 Tracy: Then number one, you have higher profit margins. Number two, you're going to be attracting a higher quality of buyer. And number three, you're just going to be happier all around because it's an easier sale when you're working with people who are not bargain shoppers.
00:12:10 Gloria: Yes, I love that so much. And there's nothing wrong with wanting a bargain, but I think that a lot of times we resort to discounting as the only lever when there's so many other levers. So I want to talk a little bit about that too, because I think the psychology part of it, just like, is so interesting. So for example, I know that free shipping threshold, right? Is another way. Are there any other psychological levers to get people to spend a little bit more? That's not just, spin a wheel and get 15% off.
00:12:37 Tracy: Oh, I love the free shipping thing. It's like, they're always getting you at a point where they're like, okay, so if you spend $10 more, $15 more, but there's nothing else to buy that's less than $25 more, they're getting you to buy more. This is a great strategy. I feel like we could talk about… I have so many other things that you can do to increase your average order value too.
00:13:00 Tracy: So increasing, yeah, I think free shipping is a great thing. A gift with purchase, like spending a little bit more to get a gift with purchase. I used to love that. I mean, I'm a little bit older. So I started wearing makeup in the 80s because that was when I was in high school. And the thing that I loved in the late 80s was like Estee Lauder. They always had this like during the Christmas time, free gift with purchase and you got like full-size lipsticks if you spent like a certain amount at the Nordstrom counter.
00:13:27 Tracy: I remember this. I would always ask for that for Christmas. And you can take a nod for that free gift with purchase during the holiday season because people love free stuff. And that is a way to just add more value on if you have the capability to do that in your pricing structure. And that's why being able to charge a little bit more can be helpful is because you can do things like that, that inspire and drive more sales.
00:13:51 Gloria: Oh, I love that too. I mean, that's how Sephora got started. I mean, raise your hand if you got hooked on Sephora like an addiction because they just gave out so many samples in the beginning. And now they don't even give out that many anymore, but it was like a candy store. So it absolutely works. I also love what you said about pricing and the free shipping threshold where it's like $10 more, but there's nothing below $50. Absolutely brilliant. Now that we're on this, what are some other clever things that we can do just to get those numbers up?
00:14:20 Tracy: This is something, so I used to shop at a store called Intermix all the time when I lived in New York. Do you remember Intermix? Yeah.
00:14:25 Gloria: Yes.
00:14:25 Tracy: They don't have retail stores anymore. I don't even know if they have an online presence, but they did this really well. And I taught this strategy for years in our programs. Buy more, save more. If you're going to have a sale, do a, buy more, save more. And this is a great strategy for Black Friday or any cyber weekend type of sale. You can do this digitally. You can do this in any in-person events that you might be having or even partner with some of your retailers if you're selling wholesale to do something along these lines where you guys are both buying into getting them to buy more of your products if it makes sense for your brand.
00:15:01 Tracy: So the way that it's structured, it's like you would get their VIPs every, maybe once a quarter or every six months or something, they'd send on a postcard. They'd also send you out an email and announce their buy more, save more sale. And if you spent $500, you would save maybe 10% or a certain dollar amount off your order. Let's say it was like $50 off your order. But if you spent $700, you'd save $150 off your order. And if you spent $1,500, you'd save like $350 off your order. So they keep tearing it up. The more tiered up you go, the more you spend, the more you save.
00:15:41 Tracy: And inevitably you're like, oh, I'm $100 away. I'm just going to find something for $100 to buy. It's the same kind of psychology because you're like, it's like girl math, right? Saving so much money by buying more. So that kind of psychology is really great. And I think promotions like that, instead of just having a flat over sale, are number one better for your business because you're selling more units, but also helpful for people on these times.
00:16:06 Tracy: I know a lot of people in the world, just different household incomes and stuff are struggling, even paying groceries in some cases. But people still wanna shop and they still wanna do that. So you shouldn't stop selling because of those things, but adding value and increasing the value of those discounts in a tiered style discount can be super helpful for people who are, just for anyone at this point. Also, psychologically, it gets people buying more. I have one other complete ninja strategy that I wanna share. Okay, can I do it?
00:16:42 Gloria: Yes, please.
00:16:43 Tracy: So this is something that's great for people who are at a little bit of a lower volume and maybe a little bit more in the startup stage, but also it's something that any business can do if you have the bandwidth or an assistant to do this. Everyone should have some sort of Google voice number or you can use your personal phone number where they can literally send a manual text to anyone who's purchased from them as long as they have their phone number.
00:17:06 Tracy: And I say manual text because this is different than SMS marketing. It is not a mass marketing thing. This is coming from a place of service to get a repeat sale or customer. So we started teaching this strategy probably, I don't know, maybe 10 years ago in the early days of Flourish and Thrive. I was working with this designer and she was really trying to get her sales up. She had a low and speaking of pearl jewelry line, you mentioned pearls earlier, and she was trying to get more people to buy from her sales.
00:17:38 Tracy: People were buying, I don't know, $20 pearl earrings. And she's like, I just can't live off of like one off $20 pearl earring sales. And I was like, why don't you just reach out to those customers, even though they bought it on your website, send them a message, call them or shoot them a text and thank them for their order for supporting your small business. And just tell them that you have something else that coordinates with that piece and see what happens.
00:18:02 Tracy: She, her mind was blown. She's just like, Oh my gosh, all of these people are buying, like they're all buying, like all of them. And I don't know what to do. Like this is just crazy. My sales have completely doubled and my business continues to grow. Now that strategy was 10 years ago. Most people don't pick up their phone these days because, if they don't know a number, they're not going to pick it up.
00:18:23 Tracy: So, but everyone reads their texts, right? And if you have a Google voice number, there's a text function, there's an app that you can put on your phone and any of your team members can also log into the virtual version of it and text from their computer. So I would send, or you can also do this from your own phone number if you're okay with that. I do it all the time.
00:18:45 Tracy: So what you do is after someone places a sale on your website and you're about to ship, send them the… strategy number one is to send them a manual follow-up text. Hi, Julie. Thank you so much for supporting my small business. I'm about to ship your earrings. You're probably getting the confirmation email already. I just wanted to let you know your piece is on the way. I'm excited to ship these to you.
00:19:09 Tracy: Before I go though, I wanted to mention I have two pairs left of the earrings that go with that necklace you purchased. I'm not sure if you saw them, but I wanted to offer them to you just in case you wanted to have a full set. If not, no worries either way. I'm just so grateful for your business.
00:19:26 Tracy: You literally just are like, thank you. Thank you, thank you, thank you. A million times you're thanking them, right? And then you can even say something after that. Like once you get the piece, let me know. Get back to me by this time today if you'd like to add them on. Otherwise I'll just ship your order as is. Super easy. Like literally 20% of the people who you send a message like that to, will actually buy something else. Or they'll just be like, wow, they actually sent me a manual message.
00:19:56 Tracy: And then the other thing that you can do is if you don't have the bandwidth to do that, if things are shipping really fast, after the order is shipped, send them a follow-up message. A similar type of strategy. Hey, Julie, it's Tracy from Tracy Matthews Jewelry. I just wanted to check in to make sure that you got the necklace that you ordered from me. How are you liking it? Wait for a response. And then if they don't respond, don't worry about it. It's not a big deal. They're just like, whatever. If they do respond and they're like, Oh my gosh, I'm loving it. Or even if they come back and they have a little bit of a customer service issue, they're like, ah, it's not fitting. Right.
00:20:31 Tracy: This gives you an opportunity to solve the problem, but let's assume that they love it. Right. They're messaging you back. They're saying, I love it. Okay. Awesome. Snap a pic and send it to me. I'd love to see it. And that's your, you can respond like that. Then I would say, I'm not sure if you saw this, but I have two pairs of matching earrings that go with that necklace available. And I wanted to offer it to you before I offered it to any of my other clients.
00:20:58 Tracy: Here's a link where you can check them out on my website. If you're not interested, no worries at all. Just let me know either way. And this is just another opportunity. About 20% of the people that you reach out to will likely buy that piece of jewelry. Yes, it is a manual process. But we are lost in this digital world of people just sending out emails and losing that personal connection.
00:21:24 Tracy: And if you are selling something that is in a slightly higher price point, like jewelry or a luxury good or luxury skincare products or whatever, people really appreciate that human touch again. Especially in this world where there's AI everywhere and everything's automated and we're automating DMs, like everything. The more that you can have that personal touch and reach out to people and show them your gratitude, the more likely you are to get a second customer, repeat customer, and a customer for life.
00:21:54 Tracy: And that's really what we're going for is to try to build repeat sales for your business. Not just get a one-off here and there because it is, as we've heard, 10 times more expensive to get a customer the first time than it is to sell to them a second, third, or fourth time.
00:22:10 Gloria: Tracy, you're giving me chills. I mean, with the whole time when you were dropping those gems, I just was smiling from ear to ear because it, absolutely, is a case for my business this year. In an economic downturn, it's really about pouring into your current people with those check-ins. And I find that the more times I get on calls with them, not even to sell them anything, they want to continue to work with you. And if you can do that in a space where literally no one is doing that for jewelry, you are better than 99.9% of the people. So this is a goldmine.
00:22:39 Tracy: You can do it for any product too. I mean, I buy, I still buy my skincare from this, this salon in or this spa in New York City called SAVER S.p.a.. Do you know SAVER S.p.a..? They're on the Upper West Side. They also have a place in Greenwich Village. I started using their skincare. I would go there and get facials. I still buy from them. Every single time they ship me something, handwritten thank you note, always this personal touch. The more personal you can do, the better.
00:23:09 Gloria: It's so worth it because it's, what? Maybe five minutes of your time, but then you get to have 20, 40 percent higher average cart order value. What I love about this, what you said about that text is that it is having a little bit of urgency. I love the cleverness of, hey, before I show it to anyone else, but it's not this like bro marketing pressure, like infomercial two spots left. It's authentic and it's genuine, but it does have a little bit of urgency just to get someone to make a time-sensitive decision so that they, you know, it's absolutely brilliant. I think about all the products that I bought in the last 30 days, I'm kind of a product obsessed person.
00:23:42 Gloria: If any one of those, even just one, messaged me and said, here's how you can use this body butter. Here's what… I would have bought, but no one's doing that. So listen to what Tracy is saying, because literally no one is doing this. You have given us so, so many strategies. I want to start a product business now, but what you're saying really gets back to what is the essence of marketing and it absolutely works. And I think we're at a point where we want to get back to the basics.
00:24:08 Gloria: Even if you implemented just that text message strategy alone, I'm going to bet that they're going to see their sales explode. Where can people find you? You're just a wealth of knowledge. I'm so grateful that you've been here with us today.
00:24:20 Tracy: Awesome. So I have a secret podcast that we're launching and it's called Sales on Repeat. So if you want to check that out, you can shoot me a message on Instagram at Tracy Matthews NY or @flourish_thrive with the word secret and we'll send you a link to that secret podcast. And we share a lot more strategies like this where you can upgrade your sales.
00:24:41 Tracy: Then also, if you want to hear more about some of the marketing stuff that I teach, you can head on over to Thrive By Design, which is my podcast. You can find it wherever podcasts are listened to. And also I wrote a book called The Desired Brand Effect. You can see it right up here. Stand out in the saturated market with a timeless brand and more tips in there as well.
00:24:59 Gloria: Thanks for joining me. I love it so much. Okay. We're going to have to have you in our group to meet our people because you just got all of our wheels spinning. Thank you so much. And for those listening, if you love this episode, please follow Tracy and please send this to someone that you know, because these marketing fundamentals are really making a comeback. It absolutely works. I am like case in point, like all of the things that you said, I've actually, it's actually worked on me. So this is an episode I think we're gonna come back to again and again, and thank you so much for being here.
00:25:26 Tracy: Thanks for having me.
00:25:30 Gloria: Hey, small business hero, did you know that you can get featured for free on outlets like Forbes, the New York Times, Marie Claire, PopSugar, and so many more, even if you're not yet launched or if you don't have any connections? That's right. That's why I invite you to watch my PR Secrets Masterclass, where I reveal the exact methods thousands of bootstrapping small businesses use to hack their own PR and go from unknown to being a credible and sought after industry expert.
00:25:58 Gloria: Now, if you want to land your first press feature, get on a podcast, secure a VIP speaking gig or just reach out to that very intimidating editor, this class will show you exactly how to do it. Register now at GloriaChouPR.com/Masterclass. That's GloriaChou, C-H-O-U-P-R.com/Masterclass. So you can get featured in 30 days without spending a penny on ads or agencies. Best of all, this is completely free. So get in there and let's get you featured.