The Definitive Guide to Business with Marcus Lemonis

Marcus Lemonis: A simple trick to triple the amount your customers spend

Enticing customers to spend more in-store can seem complicated, but there is one surefire way businesses can lose that battle before it even begins, according to serial entrepreneur Marcus Lemonis.

Customers can't buy products they're not offered, observed the investor on CNBC's "The Profit."

It might seem obvious, but the trick of using retail space efficiently and offering a variety of options for customers can easily boost customer spend — something Lemonis tried to prove to struggling Texas-based tea concept Tea2Go on the latest episode of the reality business show.

The franchise, which owner Jeff Hunt founded in 2013 as a Starbucks alternative where people could order tea drinks and loose leaf tea by the ounce, had amassed nearly $1 million in debt and shrunk from 19 locations to 11. Part of the problem was that Tea2Go's average customer only spent $3 per visit — a direct result of the shop not offering its tea-loving customer base anything to complement its teas.

Host of CNBC’s “The Profit” Marcus Lemonis samples tea at Texas-based franchise Tea2Go.
Source: CNBC
Host of CNBC’s “The Profit” Marcus Lemonis samples tea at Texas-based franchise Tea2Go.

"If I had to describe this store in one word, it would be 'barren.' There are no accessories for sale, no point of sale and zero food," Lemonis said about the flagship location. "It's almost like they did the absolute bare minimum and said, 'Yeah, this is good enough.'"

But by adding complementary tea accessories and food options, which were sourced and distributed by local vendors, Lemonis aimed to increase the $3 average Tea2Go was getting from each customer.

"After adding food and accessories, I am hoping to take that to $10 — more than tripling revenue and improving the customer experience," Lemonis said.

Tea2Go wasn’t using its retail space effectively. But added products like baked goods, mugs and gift sets complemented its teas well, enticing customers to spend more.
Source: CNBC
Tea2Go wasn’t using its retail space effectively. But added products like baked goods, mugs and gift sets complemented its teas well, enticing customers to spend more.

In overhauling the franchise and even changing the name to American Tea and Spice Shop, Lemonis focused his efforts on a family-run location in Coppell, Texas. He also leveraged the relationship with the company's tea vendor to roll out pre-packaged spices — a low-effort way to add variety.

"The store is now stocked with a wide variety of food and beverage options. The shelves are full with accessories and books and other gift items," Lemonis said. And the company did so without deviating from its brand or sacrificing margins.

"There's not one item that's been brought into this store that has less than a 55 percent margin," he said.

CNBC'S "The Profit" airs Tuesdays at 10 p.m. EDT.

Video by CNBC's Andrea Kramar.