The Value of Time
For many kinds of products, the add-ons provide much more profit than themain product. For sure, McDonald's makes more money on each drink than on a BigMac. And it is a matter of legend that Gillette just about gives away its razorsin order to profit handsomely on the future sales of blades.
How do you add more profit, though, if the product you sell has no naturaladd-ons? The answer: Make one up.
That's what we did with our tool-rental business. We offer competitivepricing on tools, partyware and other popular items. Then, just as McDonald'sasks all hamburger-only customers if they want fries with that, we offercustomers our add-on tool pickup or party cleanup services. Many customers gofor these extras, and we often make more profit on them than we do from theactual rental.
Most middle- and higher-income people today have more money than time. Theyspend more time working, commuting and running their kids from one activity toanother than ever before. The add-on that these people value most, and are mostwilling to pay extra for, is time-saving convenience.Copyright © 1999, SalesDoctors Magazine and the Author. All Rights Reserved.