What is upselling and how does it help your business?
Wondering how to get the most out of every sale you make? The answer is upselling. Successful upselling helps both you and your customer by adding value to purchases. Not only do you sell more as a result, but your customer walks away feeling you’ve gone the extra mile to satisfy them.
The benefits sound great, but what is upselling? When you upsell, it means you increase the volume of your sale by encouraging customers to buy a higher-end version of a product.
Upselling is a great tactic because it targets people who were about to buy from you anyway. It also helps you build deeper relationships with customers. This is important because customer retention is much more cost-effective than acquiring new customers.
Upselling is sometimes confused with cross-selling, which means that you’re adding additional products to a purchase.
When you upsell customers, it’s important to come across as eager and helpful. You don’t want to seem too much like a ‘salesperson’. Every recommendation you make should address the needs of your customer.
Steps involved in upselling
Good upselling involves a series of criteria and steps you need to follow. Upselling that customers are thankful for is a two-way street in that they’re placing trust in your business and receiving greater value in return. Think of yourself as a consultant first and salesperson second.
Know your product inside and out
To start with, absolute knowledge of the products you sell is essential. You need to know what the product can do, what it’s used for, and how to use it. Also know the types of questions customers commonly have about your product, and their answers.
This kind of thorough knowledge of what you’re selling is a huge part of how helpful your advice can be. And you never want to be left without an answer to an issue someone’s facing.
Base your suggestions on customer preferences
The best way to successfully upsell customers is to make sure all your recommendations are relevant to what your customer needs or wants. For example, if someone comes into your store looking for a blender, don’t try and convince them to buy a toaster oven.
A good recommendation is one that addresses what the customer was looking for but adds other benefits they may not have realised were available. An easy way to do that is by recommending a newer model or different brand that offers something missing in your customer’s original selection.
Prioritise customer service
If you want people to be receptive to your attempts at upselling, customer service is a must. Engaging with the customer to make sure their shopping experience is as smooth as possible is key to gaining their trust.
Not only will making things easy for people lead to more sales, customer service makes your business more memorable and helps contribute to your brand. If customers feel that they’re being ignored or that you’re indifferent, they’re much more likely to call off their purchase.
Keep your ask reasonable
Of course you want to make as much money as possible when you upsell, but don’t get carried away. There’s a risk that you’ll suggest an upgrade with too high of a price tag and turn customers away.
When do you know how expensive is too expensive? If you have customer and purchase data available, you can use that to guide you, but the general rule of thumb is that an upsell shouldn’t increase total price by more than 25%.
The previous steps are what you need to have covered before you start upselling, but there’s a few additional techniques you can use. Here are some of the best upselling methods you can use to close sales.
When you upsell, you’re trying to get customers to choose one product over another. Presenting products in groups allows you to compare them and show off what people miss by not following through on the upsell.
For example, if a customer is looking for a new laptop, instead of evaluating each option individually, showcase what’s available all at once to highlight missing features. Maybe one has a higher-resolution webcam or more RAM available. Make it easier for customers to perceive offers as improvements.
Finally, when presenting multiple products at a time, group them in threes. The rule of threes states that information is processed most easily when grouped in a trio, and not just when it comes to products. Groups of three are used everywhere from Apple’s item catalogue to the McDonald’s slogan.
Upsell a service
You don’t just have to upsell based on features and material capabilities. You can also offer worthwhile services that grab your customer’s attention.
Some commonly offered services that improve what customers get out of their products are:
Product protection. Offering a warranty or warranty extension is a great upselling technique because in addition to making you more money, it communicates to customers that you care what happens after the sale’s already made.
Extended service period. If you’re selling something like mobile phones or Wi-Fi routers, offering longer contracts is a good way to upsell, especially since an entirely new plan might come across as too expensive.
Product customisation. Selling a base version of a product and allowing people to add upgrades and personal touches to it is a good way to upsell. Some examples of products you can let buyers customise are cars, blenders, phones, and other electronics.
Just knowing that a different version of a product has more benefits isn’t always enough for customers, especially when an upgrade pushes the limits of their budget. That’s why it can be useful to offer a discount on improving a purchase.
It’s especially effective if you confront people with these offers at checkout, when customers have already decided to make a purchase. Even something small like a 10% discount can make it feel like they won something. You can also increase the chance that people will take the discount if you make it available for a limited time only.
While it may seem like upselling is easier when you and your customer are face to face and you can demonstrate your products, upselling is also common in ecommerce. You can use most of these same methods to upsell products on your website, as well as a few others. You can take advantage of selling online by:
Including social proof. Make sure other buyers’ positive impressions of the product you’re trying to upsell are clearly visible. Knowing that past customers enjoy and benefit from their purchase is a strong motivator.
Displaying related products. Use past purchase behaviour and searches to show your customer product suggestions, the same way that sites like eBay and Amazon do. This is also a good way to personalise your interactions with customers, since the suggested upsells are tailored to them.
Offering free shipping. Just like discounted upgrades, free shipping is a great way to make a customer feel like they’re getting good value for money, which in turn makes them more comfortable purchasing more. Free shipping also works as an upselling technique when you set a threshold customers need to cross to qualify for it.
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Upselling helps both you and your customers, and knowing how to do it can help you build relationships and cement your customer base. At its core, upselling relies on your knowledge of the products you sell and the people who buy them.
You can upsell most effectively when the benefits of the product you’re promoting are most apparent. Side by side comparisons and social proof are great ways to do this, and work well online.
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