Electricians: Get an Amazing Profit Boost with Upselling

Photo courtesy of Tobyotter(CC Attribution)

Is this you:

• You are an electrical contractor.
• You never have enough money or time.
• You are overworked and stressed.
• You need your business to make more profit, to keep it sustainable, but it’s not happening because you’re always too busy.

Most electricians are in a hurry, keen to finish each job quickly, and get onto the next job. Because you think, the more jobs we can get done in a week, the more money we can make, right?

Wrong. There is a better way. Wouldn’t you like to make more money, as an electrical contractor, keeping your customers happy, but without the stress of always having to rush to the next job?

All you have to do is make a small shift in your mindset, and do a few simple steps.

“Would you like fries with that, Madam?”

The key to making more profit, is to understand the importance of upselling. Let’s take McDonalds as an example. They have increased their turnover by 20%, just by having their staff ask one extra question to every customer who orders food.

What is the magic question? 

“Would you like fries with that, Madam?”

So by simply offering the customer more when they are already buying, you are making the most of the customer’s decision to buy from you. And more often than not, customers will thank you for it!

Now, with a small business, a 20% boost in turnover can give you a much larger jump in your company’s profit, even as big as 50%. I’ll show you how.

Think about the following example. If you run a small Pty Ltd company, and your revenue is $200,000 per year, say your costs (including your own wages) are $160,000. Then your net company profit is $40,000 per annum. If you can then boost your turnover by 20% just by asking your version of “Would you like fries with that Madam?”, then this is 20% extra revenue, which amounts to $40,000 of extra sales (which may also attract more installation work as well). All of this extra revenue generates extra profit, without you having to do all the work to bring in more business.

So, if the $40,000 of extra goods you are selling to your clients, cost you $20,000 to buy, then you will make an extra $20,000 profit from this one little exercise of asking customers if they want “fries”.

Hence, your profit goes from your baseline of $40,000 per year, up to a healthy $60,000 per year, and hence you have boosted your profit by 50%.

Of course for you to get $20K profit from $40K of sales you will need to put a healthy mark-up on the things you are selling, but this can be easier than you think.

So the principle of upselling works for electrical contractors just as well as it does for McDonald’s. You just have to figure out what are the “fries” that you can offer to your clients, and then make sure you take the time to ask every client if they want more.

Action Step

So let’s get this happening. The first thing you need to do, is to check your Profit and Loss statements from your financials, from the last couple of years. Hopefully you can check the “bottom line” from the P&L Statement without having to hassle your accountant, but if you’re not sure, ask. How much profit does it actually show, after you’ve taken out all of your costs, including your basic living cost income for yourself?

Now with that profit figure in mind, have a think about your business and lifestyle. How much extra profit do you actually want to earn? What would you like, and how much higher is it than where you are now? Is it an extra $20,000 per year? Is it an extra $50,000? Try to come up with a realistic figure.

Now use a calculator to divide that figure by 48. This will be your weekly target, for how much extra profit you want to be making from up-selling.