It’s 11:32 am. I’m standing at the checkout counter at the Toys R Us store on the outskirts of Rochester. I just bought a Leap Frog reader thingamajig for my daughter, and a Bakugan set for my son. In case you’ve been living on Mars, Bakugan is the latest craze for boys, like a modern day version of Pokemon.
I also bought some Hayao Miyazaki Japanese animation DVD’s. The lady at the counter is extremely friendly and upbeat. When I hand her the DVD’s she says something like “Would you care for our protection plan for these DVD’s? For just $1.99 you get complete protection for your DVD’s in case the kids scratch them or they brake!”
I politely decline. I then hand her the Leap Frog box and again she says “We also have the protection plan for this you know. For just $1.99 you get complete coverage for 15 months! If anything happens to the product they’ll send you a cheque and you can buy another one.”
I again politely declined and tell the lady that I’m from out of town – way out of town. She proceeds to tell me that the protection plan works anywhere. I thank her again and decline the offer.
Did you get that? Did you see the magic? Toys R Us just added almost two dollars of pure profit to items sold by offering this protection plan. That’s what they call an up-sell – brilliant!
What struck me more than this idea was the lady’s enthusiasm in selling it. I bet she was either on commission or had a target to hit of x amount of protection plan up-sells.
Let’s just do some very basic math. Assume that just 20 items per day are up-sold (and let’s make life easy and round up the amount to $2.00) That’s 20 x $2.00 = $40 a day, or $280 a week and $1,200 per month. Well, that’s not a big a mount, I can almost hear you say!
And you’d be right, it’s not a huge amount, but remember that’s “found money” – money that was not there before. If we assume that 100 up-sells are done per day, that would bring up the monthly amount to $6,000, or $ 72,000 per year. Now multiply that number by hundreds of stores in the US. Are you beginning to see how powerful this is?
Of course they need to fulfill, and I’m quite sure the percentage of people claiming the cover is very small indeed. Also, 15 months is not really enough time for the product to get damaged. Speaking of the 15-month time period, I think it’s a bit of a rip-off. It should be 3 years plus, or even some sort of life-time guarantee.
I can almost hear your brain saying “but I’m not in the toy business!” If you think like that my friend than you’ve missed the point. My point is not for you to copy this exactly. My point is for you to think outside the proverbial box. Don’t think “this won’t work for me”, instead think “how can I make this work for me?”, or “how can I come up with something similar in my business?” Consider that your homework.
For your FREE – yes FREE – e-marketing course, go to my Radical Marketing website.
Talk to you soon.