Let’s talk about upselling…
In both the marketing and sales world upselling is a common tactic to increase the value of an order.
In the book Marketing Metrics, talk about an interesting metric:
“The probability of selling to a new prospect is 5-20%. The probability of selling to an existing customer is 60-70%.”
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Upselling doesn’t have to be seen as a dirty tactic or something you should avoid. There are methods of using the upsell to bring more value to the customer and make more profit.
You can use it to help the customer make a better buying decision. Think of when you’re at the movie theaters and order a small popcorn and small soda. The cashier says if you upgrade to the medium for $1.00 more you get a free candy.
That’s an upsell and everyone won in that scenario.
In this article we’re going to cover two important terms, “upselling” and “cross-selling”. Both of these ideas have been around as long business have been trying to make sales.
That’s why in the digital age it’s more important than ever to understand these concepts and apply them to your business.
Let’s get started by defining each term.
What is Upselling
Similar to the example above: Upselling is enticing the customer to upgrade (or buy) a more expensive product or service so their order value is higher. It can also mean providing the customer an add on to their current order for a slightly discounted price.
Every online business can benefit from using upsells in their business because the customer is already in the process of buying something. It doesn’t take any more effort to offer the customer a bonus or an upgrade to the order for their benefit.
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How common is the above example? It’s funny to think about it from years ago. Everyone knows the phrase “Super Size” and people expected it when they walked into the store!
Not every upsell needs to feel slimy.
Now let’s get into cross-selling:
What is Cross-Selling?
Cross-selling is a sales and marketing technique that offers customers an additional item related to the purchase. It will usually be something the customer could bundle together because they’re either used together or go well together.
For example, if you were selling candles and someone was about to pay, it would make sense to offer products like:
- Candle holders
- Box of large candle matches
- Candle lid
All of those things are related products to the initial purchase that a customer can use. That’s the difference between upselling and cross-selling.
Upsell by Not Being Pushy…Keep it Relevant
The first rule to consider is that you need to offer something related to the product you’re selling. You’re not a convenience store, the focus needs to be on the customer and what they would find useful.
You want to compliment the product they’re buying or add value to it. For example if you were selling a yoga mat then it would make sense to offer some bands and a workout DVD. All of these things make someone starting yoga happy to make the purchase.
You’re wasting the customers time and attention offering something they don’t want. And you might lose the entire sale because it might seem sketchy and unprofessional. Amazon is the king of cross-selling.
Have you noticed every time you want to buy something on Amazon there’s a “frequently bought together” section?
It’s a smooth offering. Someone interested in a yoga mat is also going to be interested in weights and some bands to do exercises on the mat.
The sales numbers on things like that are private but I bet that Amazon influences a lot of customers that way.
Wrapping This Up…
With the growth of eCommerce businesses, upselling and cross-selling have become the new normal. You’re leaving money on the table by not using this tactic on your checkout pages, product pages and in your follow up emails to customers.
It’s an effective way to get your current customers to buy again. And the truth is that your customers never saw the other products in your store. By upselling and cross-selling you’re telling your customers and website visitors that you have more to offer them.
We found some incredible resources that tackle this topic deeper in case you want to learn more and see some real world examples.
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