Want to increase your revenue without making more deals? Here, we'll show you several ways you can increase your average deal size. Find the best tools and get the best strategies to reliably increase your deal size.
Looking to increase your revenue without increasing your sales volume? Increasing the average deal size allows you to increase your profits without having to find and convert new leads.
Here, we’ll show you several ways to increase your average deal size, and show you the tips and tools to make it easy. We’ll show you everything you need to know about how to measure your deal size and give you several ways to calculate it and increase it.
By the end of the article, you’ll have a few ways you can start increasing your deal sizes at every level.
What’s Your Average Deal Size?
In simple terms, the average deal size is the amount of money a typical client will spend purchasing your product. Although the average deal size doesn’t take other important factors into account (like net profit, costs, and more), it remains one of the most important KPIs for the marketing and sales teams.
Average Deal Size Formula
Calculating your average deal size is quite simple. To calculate it, start by defining the period of time you want to examine. Then, simply divide the revenue from that period by the number of users who made a purchase then.
The basic formula would then be:
Total revenue/ Total customers= Average Deal Size
For example, if your company made $600,000 in revenue last year divided among 25,000 users who made a purchase, your average deal size would be $24 (600,000/25,000).
Why Is The Average Deal Size Important?
Your average deal size is one of the most important KPIs when it comes to evaluating your sales funnel’s health and effectiveness. It’s a key metric in conducting a sales analysis and helps predict your revenue based on trends and patterns.
A stable average deal size helps you easily determine how many sales you have to close to meet your sales quotas and goals. A progressively lower average deal size can mean that current marketing strategies aren’t working, and may indicate issues in the sales funnel or stronger competition.
By increasing the average deal size, you can increase your revenue without having to increase your leads, your sales team’s hours, or your marketing budget. And, although it can be tricky, there are several ways to successfully increase and optimize your average deal size.
5 Ways To Increase Your Average Deal Size
Here are five ways to boost your average deal size, in no particular order:
1. Sell Your Value Upfront
The main worry of a potential customer is how your solution can fix their pain points. The faster you show them, the better the chances are they want to hear more.
Start by taking a close look at your target audience to ensure you know its main pain points in detail. You should know how they’re impacting them daily and how they’re dealing with them now.
Then, it’ll be easy to see how your solution fits in their pain points, creating value for your leads. Once you know the value, simply keep using your target audience data to find out the best channels and messages to showcase to any potential customer.
2. Directly Contact Decision Makers
Few things can end up wasting more of your sales team’s time than contacting “leads” who aren’t decision-makers. This is especially the case in sales where the salesperson needs to spend time establishing a relationship with the lead before closing a sale.
However, since you’re probably not the first person to try to sell something to decision-makers, they tend to have gatekeepers who filter the people the decision-maker talks to.
Ensure you’re reaching for the right decision makers through strong customer personas made with data from previous sales. It can show you the kind of ranks and job titles your decision makers have, and the kind of gatekeepers they may have. Then, develop approaches personalized to the gatekeepers to get through them or circumvent them altogether.
3. Reduce Customer Perceived Risk
Once your client is assessing different potential solutions, they’ll evaluate how uncertain they are that each option would work, and how much it would cost to start over with another solution. By reducing the perceived risk, you can easily increase your conversion rate.
Start by looking at the potential barrier your lead would face, like the investment they would have to make with money, time, and other resources to get your solution. Then, you can find ways of reducing the perceived risk by engaging your leads with free trials and demos, new customer offers, and smaller purchases to serve as proof of concept.
You can also invest in a good customer service team, increasing the hours it’s available, and focusing on a personalized approach.
4. Develop Strong Customer Relationships
The stronger your customer relationships are, the higher the chances of them making larger purchases, or purchasing more often. Strong customer relationships can help you get customer loyalty, and empower your customers to become brand ambassadors and give you referrals.
You can start by making sure you’re engaging with users on social media, and improving your customer service. Personalization is a must, so find ways to address your leads by their name when communication starts.
A great onboarding process can also help users understand your tool and take full advantage of it as fast as possible, helping them with interactive tutorials and FAQ pages. You can also slowly develop high-quality webinars and ebooks to help establish your company as an authority on the topic and insert it into the early stages of the customer journey.
5. Strategically Upsell Customers
Upselling can be challenging, and, when done wrong, can negatively impact your brand. That’s why strategic upselling is vital for an effective upselling campaign.
With strategic upsell, you can use data-driven insights to determine which account-based strategies are best, and which solutions to push for. This allows you to optimize your upsell results by only upselling users who are ready to upgrade or make another purchase.
Make sure to log every interaction you have with customers to gather as much data as possible about them so it’s easier to determine when they’re at the best stage to upsell.
6. Nail Your Lead Qualification Process
A good lead qualification process can help you ensure your sales team is only spending time with leads who are ready to be converted. This helps you increase your average deal size while decreasing the cost per conversion.
Try different lead qualification methodologies to find one that prioritizes the factors affecting conversion. This process should not only determine whether your lead is the decision maker, it should also identify the pain point, find how far down the customer journey the lead is, and whether or not they can afford your solution.
You can then use this data to identify the leads who are ready to convert and redirect them to the sales team. Any leads who aren’t ready to convert can be redirected to nurturing campaigns to keep them engaged and informed as they get ready to make a purchase.
7. Use The Right Analytics Tools
Finally, if you want to increase your average deal size, you’ll need the tools to do the job. Use CRMs like HubSpot and PipeDrive to manage and keep track of your leads and interactions.
You can also use tools like Polymer Search to dig deep into your data to find meaningful insights that will allow you to increase average deal size without writing a single line of code. Polymer is designed to make sales data analysis easy as pie, so anybody can do it.
To give it a try, sign up here and experiment around with one of our sample datasets, or upload your own one. Polymer uses advanced AI to understand your data, transforming it into an intuitive web app with actionable insights for your business.