I recently just bought a new car from the Chevy dealer and if you’ve ever bought a car from a dealership, you’ve sat down with their finance https://www.acheterviagrafr24.com/viagra-generique-prix-juin-2013/ guy and ran through the numbers. What you may or may not have known was all those little add-ons (gap insurance, extended warranties, clear coat rock guards) are all upsells.
Here are some of the most common ways businesses try to extract more money out of customers:
“Would you like fries with that?”
“Do you want our extended warranty?”
“Are you interested in the premium car wash, which comes with a wax?”
We’ve all experienced cross selling and upselling as a customer. It’s a smart tactic.
Cross selling is when you sell a different product or service to an existing customer. Upselling is when you convince a customer to buy a more expensive version, or add-ons, accessories, or upgrades to a current sale.
Selling to a brand new customer takes a lot of effort and money. Depending upon your industry, the actual cost of new customer acquisition could be anywhere from a few dollars to hundreds. Putting your energy and money towards the customers you already have, using upselling and cross selling, reduces the cost of sales and increases the amount you will sell. You will also increase customer loyalty.
1. Be Natural And Not Pushy
Upselling and cross selling works best when you aren’t being overly aggressive and pushy. Remember, this is a current customer. You are trying to gently encourage them to add to their order, but keep in mind that they are already making a purchase.
Pushy behavior includes:
- Inducing guilt in a customer for not making a purchase.
- Repeating the offer over and over and not taking “no” for an answer.
- Increasing the time and social load a customer experiences at the point of sale. They’ll remember it was a hassle to checkout.
Think of how you grow to dread the inevitable “are you interested in our store credit card? it could save you 10% today…” because, in some stores, a simple “no thanks” then elicits “are you sure? you could save money…”
It’s a hassle.
If your techniques turn a customer off so that they don’t come back or, worse, walk away from the sale entirely, you’ve missed the point and you have possibly damaged a customer relationship.
2. Tap Into Impulse Buying
There’s a reason checkout lanes are full of small-ticket items like candy, gum, lip balm, batteries, and other “essentials.” In order for impulse buying to be set in motion, you have to reduce the barriers that keep customers from purchasing. The products you see lining the checkout aisle have similar qualities, no matter what store you are in.
- They are inexpensive and so they don’t trigger price conscious behavior in customers.
- They are products most customers likely will need and use at some point, so they aren’t seen as frivolous.
- They are put in a place where the customer has to wait, displayed in a way where it’s easy to grab and add to the order.
- The entire plethora of store inventory is not crammed into one spot. Just a few products are there so that customers aren’t paralyzed by too much choice.
A virtual business can tap into the “checkout aisle” technique, but they have to be careful, even more than a brick and mortar. In a store, customers can just look away. Online, they have to decide and click in order to get the order to go through. And that leads to the next point.
3. Reduce The Decision Level
Remember, too much choice can be paralyzing. We all have a limited amount of energy devoted to decision making in any given day.
By the time a customer has decided to buy a product, they’ve gone through a decision-making process. Making decisions and choices creates a level of stress and saps energy. The last thing you want to do is add to your customer’s stress load when you upsell or cross sell.
- Offer one or two options. Refrain from upping the ante and offering more if the customer says no.
- Make sure the options are fully related to the product or service the customer is purchasing.
GoDaddy and VistaPrint are two online companies who make the checkout process so painful and full of arduous upselling and cross selling techniques on the way through a shopping cart that it almost feels like customers have to go through a labyrinth just to make a purchase. They force a customer to make far too many decisions about peripheral products that it would almost be easier to order elsewhere.
4. Use The Bundle Technique
Creating a bundle of products or services is one way you can upsell and cross sell more without adding to that decision load we just talked about. Think about Flo, and how she is always talking about the “home and auto” bundle for Progressive insurance. Even if I only wanted home insurance, it is likely I have a car if I have a home. Why not bundle the auto insurance into the home insurance for an increased price, but still a price that is a better deal than getting them separately?
Rather than trying to upsell three products at the register, sell one bundle with the three products in it.
For a bundle to work:
- The total price of the bundle must be slightly less than buying the products or services separately.
- One big-ticket or larger item with a few smaller and related items make a good bundle. The smaller items are almost seen as “free” while the big-ticket item is the product the customer was looking for.
- Base bundles around your most popular items (that big-ticket item).
Customer love bundles. One transaction, few decisions, better price, lots of items.
5. Show The Inherent And Related Value
If I buy an inexpensive Chromebook for $100, offering me a one-year extended warranty for as much or more than the cost of the original product makes no sense. I’m buying a “disposable” product and an expensive warranty is the wrong upsell. A simple carrying case, however, might be a more logical upsell.
Any product or service you upsell or cross sell must add true value to the original purchase.
- The additional product or service should enhance the original sale.
- The additional product or service should make sense alongside the original sale.
For example, if you go to VistaPrint to purchase business cards, you’ll be asked if you want postcards, mugs, a website, a notebook — just about anything and everything that VistaPrint can make for you. That’s too many decisions for products wholly unrelated to the original sale.
Asking me if I’d like a croissant with my coffee is logical, adding value without a huge decision or pricetag. Asking me if I want a website and custom notebook with my business cards is not.
6. Use Recommendations And Social Proof
Walk into just about any Barnes and Noble bookstore, and you’ll see a shelf of books that the staff recommends. Recommendations are a way to use social proof to suggest products people might be interested in.
Amazon is the master of this, recommending products for you based on what others who bought similar products also purchased. This is helpful because it tells you that other customers did it, you’re not alone, and it must have worked out OK for them.
Along with recommendations, including user reviews, customer testimonials, and other proof that people have not regretted their purchase is helpful. While this is easier for online stores, brick-and-mortar stores can include tags on the product shelf itself and let those actually do the upselling and cross selling without you having to be there.
Social proof helps upsell and cross sell on its own. Your other customers are doing the work for you.
7. Stay Out Of The Way
You can’t upsell or cross sell until the customer has selected a product in the first place. By interrupting the customer’s buying experience, you run the risk of destroying the chance to sell anything.
Think of when you go to a restaurant. Your server asks you if you’d like dessert after you’ve been served (and eaten) your main meal. It would be very silly to try to sell you dessert before selling you the primary meal.
Don’t venture into upsell and cross selling territory until the customer is already decided on buying something in the first place.
8. Listen For Real Needs
Sometimes a customer tells you what they want you to sell them. It isn’t always a related product or service to what they’re already buying. Amazon suggests products based on what customers have viewed in the past, knowing they’ve expressed interest in that product but haven’t purchased yet.
What are customers telling you at the counter? What are they telling your customer support? What have they purchased from you in the past? What have they casually mentioned an interest in? Do you have services or products that could meet these interests and needs? Can you identify the real problem behind their complaint, and see how a different product or service might better fit them?
What this means, especially for brick-and-mortar stores, is that a script isn’t always going to work. Having your employees offer customers a credit card to save 10% on their purchase of a pack of socks is not meeting a real need.
9. Wait Until The End
The best time to upsell or cross sell is near the end of a transaction. At this point, you’ve had a chance to listen to your customer tell you what they need, and assess whether what they are buying is really what they need.
You know your business best, and are aware of all that you have to offer. Wait until you’ve had a chance to listen to your customers before offering them additional or other options than what they came in for, otherwise you’ll get it wrong and turn them off or put them on their guard against high-pressure sales tactics.
The key here is to offer what your customer doesn’t even know they need or want, and to do it at the right time and in a way where they don’t feel pressured or that all you want is their money. It should feel natural, helpful, and friendly.
P.S. Thanks to Mustafa Khundmiri from Copymatter.com for creating the custom featured image.