| May 03 2019
You don’t need the best product to be successful. Or even the best servic...
| Apr 26 2019
There are efficient ways to increase the profits of a business.
And there are inefficient ways.
Upselling is the definition of efficient.
And here’s the simple reason you need it – selling to new prospects is hard. Really hard.
In fact, the probability of selling to a new prospect sits between 5-20%.
Would you want to pour your marketing budget into something that converts ONLY 5-20% of your new visitors into customers?
Most smart business owners would see this as an investment wasted.
That’s the challenge of turning website visitors into customers. And even if you’re above average and can raise this figure higher, you’ll still be paying more than if you targeted an even more valuable market.
Wondering what this market is? This market represents a proven strategy for businesses in all industries. And it’s the customers you already have.
Did you know there is a 60-70% greater likelihood of converting an existing customer compared to chasing new leads?
That is money well spent.
And it all happens by upselling your existing customers.
If you want to increase your revenue by 35%, just like the giants over at Amazon did, you need to utilise the power of human psychology to become an upselling expert.
Upselling techniques are most effective once you are able to understand what your customers want and when you have provided them with even more value than they ever thought they wanted.
It’s not tricking anyone.
Instead it is understanding how consumers act from a psychological perspective.
That’s the science behind upselling.
And it’s the way you’ll grow your business.
When you hear upsell, you probably think of retail workers pushing you to buy a large coffee, when all you want is that small cappuccino you can finish on your way back to the office.
Or worse yet, you’ve experienced it yourself.
Your manager barking at you to sell more, more, more.
It’s time to rewrite the definition of upsell and leave these examples, tinged with negativity, behind for good.
Gone are the days of high pressure situations and being manipulated into purchasing a product you don’t need.
Upselling is now a valuable way of inspiring your clients and customers to seek more value, and to empower them to find products that enrich their lives, not drain their wallet.
Upselling strategies don’t trick or coerce customers. Instead, they complement your existing sales techniques to help people find the products and services they want, then identify opportunities to provide them with more value.
In this way, upselling is a win-win. It works towards your business goals while providing the solutions people are seeking.
You benefit from increased revenue and a satisfied customer base, while your customers found resolution and see you as a trusted and reliable player in your market.
Upselling techniques will help you to:
Your goal is to make more money.
But that doesn’t mean your business has to take advantage of people.
The key to upselling successfully is to solve problems for your customer and help them achieve whatever it is they desire. That’s how you’ll work towards their goals as well as yours.
This is true when you first sell your product or service, and remains true when you upsell something else.
Keeping this in mind, here are the 5 ways you can give your customers more value, and upsell at the same time.
What problems are your customers trying to solve? Help them solve it by asking upselling questions.
Are they buying a USB to store their work files? Recommend the portable hard drive instead as they’ll be able to store more files and access them quicker (making it easier to use for work).
Do they need the USB as part of a new job? In which case they would benefit from more stationery. Or are they looking to secure work files as part of an office move? You could help them find even more ways to streamline the moving process.
Remember, the deeper you understand their problem, the more chances you have to upsell which helps them and you at the same time.
Similar to the previous point, you want to suggest products or services that help them achieve their goals.
For example, if they are having their carpet cleaned because they are getting dust allergies, suggest cleaning their couch as well because there is often lots of dust there too.
Again, this isn’t a case of trying to pull money from your customers that they don’t want to part with.
On the contrary, by helping them understand their pain point as a wider problem you will provide more value and help your bottom line at the same time.
This tactic is commonly seen in the restaurant industry with restaurant upselling centred around offering new ways to enjoy food and beverages.
Everyone wants to save money. You can do your customers a favour by giving them a discount for a product or service they likely want, but might not want to spend the full price for.
Keep the discount small, 10% is a good amount but adjust according to your industry and profit margins.
Thought it may seem tempting to raise your discount to 30%, 40% or 50%, these amounts can scare off customers who see this change in price as either too good to be true, or reflective of a default in the product that has caused such a discrepancy in the price.
Struggling to justify lowering the price on your product or service?
You are 60-70% likely to sell to an existing customer, compared to the 5-20% likelihood of selling to a new prospect. Which moves on from how to upsell and shows exactly why you should upsell too.
On top of this, when you retain a customer they are more likely to spend more, and spend more frequently.
The cost of acquiring a new customer is typically much higher than giving a small discount.
People like having the highest quality products and services. This is a status symbol and when you successfully show them what they stand to benefit from the more expensive purchase they will be more willing to pay for it.
As consumers we are all looking to justify cost against value.
Is the dollar amount we have spent going to be returned in the value of the products and services acquired?
While weighing up this delicate balance, some consumers will need a little validation to push their purchase over the line.
For example, explain that the more expensive printer they are considering uses more modern technology and will be more future proof, requiring less maintenance and increasing their productivity.
Turn their fear of over-spending in the short-term into a realisation that they will end up spending less in the long run.
That’s the definition of value-driven upselling.
Let’s say you lined up all day and bought the latest model of your favourite smartphone.
After spending a heavy $2,000 or more on that new iPhone XS Max, you’d worry about dropping it (even if you’d never dropped a piece of new technology before).
Once you identify the fears your customers have you’ll be perfectly placed to ease them.
In this example, ease your customers fear and suggest purchasing an insurance plan to cover the costs if they damage it.
Or a small delivery charge if they’re nervous about transporting that TV, piece of furniture, or expensive new purchase home,
You increase the cost of your sale and they feel at ease.
That’s a classic upselling win-win.
You don’t want to suggest your customer buys something else before they get their wallet out and commit to paying.
You’ll risk losing your initial sale if you do this.
Instead, wait until they are in the process of paying.
It’s much easier to say yes to that extra muffin when you’re already paying for your coffee, than it is when you first step into the cafe.
Understand that people have budgets and they try to stick to them.
They don’t want to feel guilty about going way over budget.
Instead, push just a little so that they feel they only stretched their budget marginally.
It’s natural for people to want better things, so highlight why the version that is a step up from the model they want is better.
They’ll do the rest of the selling themselves.
You should have a guarantee for your initial offer, as this eases your customer’s fear of making a mistake (something that nobody wants to make).
This could be in the form of a satisfaction guarantee if you provide a service, or a peace of mind money back guarantee if you sell physical products.
Upsell phrases in the form of assurances can remove the obstacles to an upsell and make it a smoother, less stressful way to maneuver them along their purchasing journey.
If you’re working off an upsell script, which can help provide a framework for you to follow, then guarantees should be at the heart of your upsell words.
So add a guarantee to the upsell and make it easier for them to say yes.
Initial sales are easier to make if you can show that others have made the purchase and are happy with it too.
If you can prove that people just like them have opted for a newer model or more advanced purchase, it stands to reason that the same benefits would be theirs.
You could work towards this goal with satisfied customer testimonials that show why an upgrade was worth the extra cost outlay.
Use testimonials and stories to motivate your customer to say yes.
Nobody wants to feel like they’re being upsold. Even if the end result is beneficial to your customer, feeling like they are sitting through a sales pitch is a turn off.
Instead of pushing an obvious agenda, tell them why this is a good decision, and why you personally think they should make it.
If you start acting overly pushy, hiding details and not answering questions they will sense this and start becoming skeptical.
You want them to keep trusting you, and the best way to do this is to be transparent.
When you are honest from start to finish you’ll find the phases of upselling are much easier to navigate.
While an upsell script won’t work for every interaction, and should not be used over a natural, organic approach, having a template can help you or your staff understand where opportunities for an upsell occurs.
Upsell scripts can take the experience of a sales person and provide a launching pad for your own team.
It might be bad form to ask for seconds when you’re at your in-laws house eating a lobster dinner.
But in the world of business, everything is yours for the taking.
Well, in this case it’s giving.
Give your customers the upsells they need to accomplish their goals.
Give them the validation they need to be confident in their decision.
Remember that these people need what you have to sell. And at the end of the day you’re helping them.
In this way, upsells make common sense.
Once you embrace the psychological aspect of upselling it becomes easier to identify the problems your customers have and the ways you can solve them.
From there, an upsell is the easiest conversion possible.
Dollar Shave Club is big business.
Delivering razors and personal grooming products for men, the company was acquired by Unilever in 2016 for a reported $1 billion.
Don’t let the name fool you though. Dollar Shave Club may draw customers in with the promise of cheap razors, but they are upselling masters.
Consider the following 3 price points from their website pricing page.
They have displayed clearly the increase in value from their basic price point to the creatively named ‘Member Favourite’ package, which evokes a sense of belonging as well as clear social proof.
By offering 3 varying levels of quality, customers are able to compare the value and opt to upgrade for a small price.
This ties back into the psychology of selling, with studies showing that among a selection of 3 price points, the majority of people will opt for the medium price option. This is followed by the most expensive option.
In these studies, people chose the cheapest option the least often.
It is 5-25X more expensive to sell to a new customer than to an existing one.
Upselling is the simplest way for you to leverage the clients you have and drive new business.
When actioned properly, upselling is designed to improve the buying experience.
When upselling is driven by a desire to provide additional value, it develops strong bonds between you and the clients you are helping.
With a greater level of customer satisfaction, you will be increasing your customer lifetime value (CLV), creating loyal customers that come back again and again and keep your cycle of upselling going strong.
Remember, successful upselling requires you to understand your customer’s needs.
An upsell should always leave people feeling happy, like they got great value for money, and ultimately got the better end of the transaction.
Provide a product, provide that feeling, and you’ll have yourself a successful upsell.