New Venture Evaluation #16: Secondary Sales Potential

The purpose of this element is to uncover what can be one common way to rapidly expand and grow a business: the second serving. One of the easiest ways to grow revenue is to sell the consumer a second offering after completing the first transaction. What to look for here are types of secondary offerings, some are automatic (subscription) and some are IP based (printer cartridges) and others are more associative (chips and dip). And others might include product upgrades or add-on services.  The more likely and the frequent follow-on transactions occur, the faster and more profitable the business can grow as a result of lower overall customer acquisition costs and increased customer lifetime value.

handcuffs

Some questions we ask when looking at a new venture: Is the business a one-off transaction or is it the holy grail of razors handles and razor blades? Sometimes the desire to “lock up” the consumer into a proprietary world can scare them off. Handcuffs can either be scary or they can be fun, it’s all about context.

soft-handcuffs

Are you selling razors and razorblades? Go to www.venturephenomeproject.com and share your experiences with investors and entrepreneurs.Questions about our apps? Ping our support forum: support@northsocial.zendesk.com

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