Upselling and Cross-Selling 21st April 2020 – Posted in: Latest Articles
By Martin Timbers
‘Upselling’ can come across as a bit of a dirty word particularly in retail. It conjures up images of sales people trying to make you part ways with your cash by trying to get you to add more and more worthless items onto your order. However, when done right, upselling can actually help to increase your customer satisfaction levels.
First of all, you need to appreciate the distinction between these two terms.
Upselling = upgrading a customer’s current order for a more expensive version
Cross-selling = adding another related product onto their order
For example, if a customer came to you wanting some basic uncoated business cards, and you were able to persuade them to add some special finishes such as a lamination or rounded corners, that would count as upselling. On the other hand, if a customer came in wanting letterheads and you managed to convince them that they needed compliment slips as well, that would be cross-selling.
Cross-selling and upselling represent easy ways for increasing revenue. It’s said that you are 60-70% more likely to sell to an existing customer, compared to the 5-20% likelihood of selling to a new prospect.
7 Tips to make Upselling and Cross-Selling work for you
1: Keep it Simple
The first thing to know when trying to upsell or cross-sell a customer is that you mustn’t overload them. You’re already asking them to spend more than they planned: you don’t need to annoy them further by offering 50 more expensive alternatives. Pick one or two items which relate well to their purchase. No more!
2: Be Reasonable
You should also bear in mind how much the customer has chosen to spend on their order. Nobody’s going to want to go from spending £30 to £300 so don’t ask your customers to. As a general rule of thumb, try not to increase the cost by more than 25%; any more than that can scare customers off.
3: Place Cross-Sellable Items Close Together
Persuading someone that they need something is always easier when they’ve already had the idea themselves. If you are in retail, arrange your products so that related items are seen next to each other. If you are selling online, on the product page of an item, show other related items. ie. If you are a pet store and have a Rabbit Hutch, have on a sidebar, other items people have purchased when purchasing this product and then have the items listed ie, water bottler, food bowl, hutch cover etc
Your customers may make the connection on their own and add a second item onto their order without you even having to ask. If not, you’ve planted the seed, making them more receptive to the idea when you do ask them.
4: Sell the Benefit
Price isn’t always the most important factor for a customer. If you can prove that a more expensive specification will satisfy their needs better, they’ll be interested. “The reason it seems that price is all your customers care about is that you haven’t given them anything else to care about.” So, make sure you really are giving your customers added value or they’ll see right through it.
5: Create Package Deals
Bundles are a great way to make customers feel like they’ve hit a real bargain. The package deal erases the barrier to bigger purchases because the customer is focussing on how they are managing to get several items for cheaper than they would be individually. For my business a good package would probably be a set of business cards, leaflets and a pop up roller banner, great for new businesses and also for those established one’s who are planning to exhibit.
6: Give Customers a Target
One simple way to push customers into spending a little more than they might have planned is to offer them something extra for reaching a certain price. For example, you could offer free delivery on purchases over £50, or buy 250 and get 100 free!
7: Ask what their End Goal is
Conversations with customers don’t always have to end with you simply saying yes to their requests. If they want X PRODUCT, ask them why they want X PRODUCT. Maybe you have some other ideas that they may require but have overlooked. If you can delve a little deeper, you might find many more opportunities to sell products than it first appears.
When NOT to Upsell or Cross-Sell
Not all customers should be offered additional buying opportunities. Teach your salespeople to discern when a customer is likely to be unprofitable, and to avoid providing them with opportunities to be even more unprofitable.
Examples of unprofitable customers include those who overuse your customer service department, who initiate excessive returns, or who consistently demand attention that is above scope for their service level.