How to increase your average deal size

Increasing average deal size can be a great way to grow revenue. Larger deals can provide higher profits with lower cost of delivery. They may require less total sales team involvement per dollar. And they can help to even out peaks and valleys in your sales trends.

To increase average deal size, sales teams need a strategy that allows them to grow effectively without offering steep discounts and risky guarantees just to win those larger deals. Here’s how to do it.

1. Understand why you want the bigger deals
   Before you start focusing on “increasing average deal size,” it’s important to know why you want bigger deals. In some cases, bigger deals may not be the best strategy for growth.
   
   For instance, many companies thrive on lots of small purchases. Services companies sometimes are better off selling small deals to begin with and then growing with the customer.
   
   Take the time to understand how larger deal sizes will benefit your business, as well as the sacrifices you will have to make to get there. For instance, if you emphasize more expensive options, will your base customers lose interest? If larger deal sizes involve going after larger clients, does your team have the skills needed to win their business? Can you afford the longer sales cycles that may be involved? Will you need to change your messaging and even your product offerings?
   
   If you can ask these questions and determine that a larger deal size will in fact be beneficial to your company, even after the cost of increasing deal size is factored in, then you can invest in building the strategy to do it.
2. Target the right customers
   If most of your customers are mom and pop shops, there is an upper limit to how much they can spend with you. This will severely limit how much you can increase your average deal size with them. On the other side of the spectrum, if your clients are multinational corporations with billions at their disposal, they may be glad to spend more with you if you can make it worth their investment.
   
   But the company’s ability to spend isn’t the only criteria that determines who your best customers for growth are. It’s also important, for instance, to know their priorities, their need for your higher priced offerings, and how well your sales team can come alongside them to become a trusted partner.
3. Tie the purchase to a larger initiative
   When a purchase is connected with a larger organizational initiative, companies have a way of finding money to fund them. By contrast, if the purchase is seen as a necessary evil or a side project, companies are less likely to want to invest more.
   
   Companies have a way of finding money to fund larger organizational initiatives.

   George Brontén
   To increase average deal size, take the time to understand the larger organizational mission and needs of the companies you target. Train your sales teams to ask big picture questions to learn what initiatives are being prioritized by these companies. Look for how your products and services can serve that larger vision and mission, and tie the sale to that.
4. Reduce/remove risk for the customer
   When it comes time to “pull the trigger” on a purchase, the biggest factor for the customer often is risk. If they already know they need or want the purchase, and your sales team has shown them how it can help them, and they know you’re the best option on the market, then the only thing in the way is whether they feel safe in making the purchase.
   
   This barrier is small when a customer is making a decision about a pair of shoes or a meal. But on large, complex b2b deals, risk can be a driving factor. The investment in time, money, and business disruption can be substantial.
   
   You can reduce risk to the customer on larger purchases in a number of ways. You can offer a smaller deal first as a proof of concept, and attempt to work them into a larger purchase after trust is established. You can offer better commercial terms to make the larger purchase worthwhile. Or you can establish trust during the sales process by aligning with their team across the organization.
   
   This latter option is often best for complex b2b deals, where a smaller purchase may not make sense and discounts can be disabling for the seller. But it also requires a more coordinated and strategic effort to align your team with theirs and to build trust throughout the sales process at every level of their organization.
5. Strategically grow existing accounts
   Existing accounts can be an enormous source of larger deal sizes. If you’re doing your job well, these customers already trust you, so the risk is lower for them to work with you. You already have warm contacts, so the door is open for conversations. And they already know and like your products and services.
   
   The key here is to strategically identify which existing accounts are good targets for growth. A tool like Membrain’s account growth module can help you visualize who to prioritize, follow a plan to find out where their key areas for potential growth are, and go after it.
6. Examine how you measure deal size
   When you measure average deal size, are you counting only the initial sale, or are you counting the total value of the customer over time?
   
   Understanding how you measure deal size is critical to ensuring that your efforts to “increase average deal size” don’t derail your most profitable existing efforts. Take the time to look at how you are measuring and create metrics that reflect the true value of each deal, and not just the initial transaction. This is especially important if you have a “land and expand” strategy.
7. Stop winging it and start executing consistently
   Occasionally, a superstar salesperson can take the direction “sell bigger deals” and run with it. But in order to consistently increase deal size across your organization, you can’t just tell salespeople that’s what you want and expect them to do it. And a few hours of training won’t help them execute consistently. They need reminders, reinforcement, coaching, and workflows that support them in strategically and consistently executing on your plans.
   
   Membrain’s core workflows and our account growth module provide you with the tools you need to embed new approaches directly into the salesperson’s workflow, along with enabling content, coaching tools, and on-demand training. We also give you the data and insights you need to understand your customers and target your efforts effectively.
   
   We’d love to show you how you can increase your average deal size with Membrain. Contact us for a demonstration.