The most obvious benefit of upselling and cross-selling, no matter the type and size of industry, is more revenue. However, because customers nowadays are more discerning, it’s also more difficult to convince them to take your product suggestions. There’s a fine line between being persuasive and being pushy — the former has the potential to convince, the latter to annoy.
So how do you master the art of upselling and cross-selling, and convince your customers that your offers will benefit them? Here are some things to remember.
1. Understand the Difference Between Upselling and Cross-Selling
These two terms are often used interchangeably, but there is, in fact, a subtle difference between the two. Upselling is enticing the customer to buy something that’s more expensive than their original choice, or to “upgrade” their purchase to make the initial sale more profitable. Cross-selling, on the other hand, means selling products and/or services that can be used in relation to the first purchase.
So upselling would be a razor company convincing you to buy a pricier four-blade razor by highlighting its benefits over a more affordable two-blade version, or a fast-food crew offering to “supersize” a customer’s order. Cross-selling meanwhile, is a offering a conditioner that would work well with a shampoo, or perhaps bundling a memory card along with a digital camera. Knowing the difference will help you create better, more attractive offers.
2. Offer Something Proportionate to the Purchase
Carefully study your customers’ habits and preferences so that you can make offers that are proportionate to what they are buying and their spending capacity. For example, if you want to cross-sell to someone who regularly buys Asian cosmetics on wholesale, a 5 percent discount on wholesale makeup tools and accessories may not be too enticing. Similarly, a person who’s buying a Toyota wouldn’t be convinced by a salesman upselling them an Audi instead.
Keep in mind the “rule of 25” when thinking of what upgrades or complementary products to offer. The idea is simply to never upsell or cross-sell products that are more than 25 percent of the cost of the original purchase. This way, you will not scare your customers by giving them outlandish offers while also building their confidence, so to speak, to avail more related products or higher tier items and packages.
3. Know What Products to Offer and When
It’s tempting to offer to upsell or cross-sell several items, especially those that don’t sell as much or new products that you want to give more prominence. However, this is also a recipe for disaster that may overwhelm and irritate customers. Thoughtless upselling and cross-selling may also endanger your relationship even with your most loyal patrons. Again, it’s best to study your customers’ habits and preferences so you can offer something that matches their needs and wants. Pay attention to clues like the product pages that they frequently visit, the items that they put in their wish lists, or even their answers on customer satisfaction surveys.
Timing is also an important component in upselling and cross-selling. If a customer calls to complain about a product or service and is noticeably upset, it’s best to hold off any kind of offer until after the issue is resolved and the customer is placated.
4. Focus on Value
Sometimes, even if the product you are upselling is clearly more superior to the customer’s original choice, they end up buying the lower tier item because they’re unconvinced of its benefits. Help your customers appreciate the greater value of whatever you’re upselling or cross-selling by focusing on the bigger picture. Say Smart TV A is 20 bucks cheaper, but Smart TV B not only has more connectivity options but also more service centers nearby — you’re not just selling extra features but also convenience, and thus greater value.
Conclusion
Upselling and cross-selling are tried and tested methods of increasing revenue. However, a careful balance still needs to be achieved for these techniques to serve you well. Keep these things in mind the next time you’re planning to upsell or cross-sell to your customers.
