Often, we sell a product (especially service products) as one complete item, without specifically breaking them down into their constituent parts.
It may be that we ourselves don’t realise the constituent parts; we just do everything together, as one, without considering them as individual elements.
Or, perhaps, we do realise the individual parts, but don’t ascribe much value to them, at least in terms of what we expect the client to value.
Moreover, those individual parts, if separated out on their own, often can’t necessarily be sold individually; they only exist in support of the full product.
But those individual parts can potentially be sold as extras, add-ons and upgrades if you repackage the original product.
By giving them their own value (and making sure the customer appreciates that value), you can achieve two things:
- Increase the overall price of the product
- Use them as leverage variables in price negotiations
Let’s illustrate with an example:
A travel agent sells travel packages to their clients.
But breaking those packages down, they include:
- Initial research and proposals
- Preferred rates, deals and upgrades that only the travel agent can get
- Trip specific administration (such as organising visa’s and passports)
- Transport (including transfers)
- Drinking and dining
- Entertainment (such as tickets to see shows)
- Tours and guides (including meet-and-greets at the airport)
- Flexibility to change the booking
- In-travel support (i.e. a helpdesk facility)
- Detailed invoicing (i.e. a full breakdown of all costs, including specific hotel extras, etc)
- Turnaround times (e.g. getting an itinerary proposal back to the client within a specific timeframe)
That’s a dozen individual constituent elements that make up the whole package.
Of course, that’s not to say that it is practical to start selling every constituent element as an add-on; some items will be expected as part of the initial product.
(a travel package without accommodation wouldn’t be very desirable!)
But don’t assume that all of the elements that goe into selling one of your products are expected by the customer; some customers may be expecting to pay extra for something you just bundle in for free, without even thinking.
If you haven’t taken the time to break down and ascribe a value to all the individual bits of work you do, those parts can’t be effectively used in price negotiations.
Which means you may be leaving money on the table.
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