Congratulations! You’ve won the battle – you’ve made a sale. But in reality, the battle has just begun. What comes after you’ve made that sale? Hopefully, more sales. That’s where upselling and cross-selling come into play. These popular sales techniques help drive more sales from converted customers, who are proven to be easier to sell to.
What is upselling?
Before we get into the best tips for upselling and cross-selling, let’s clarify the definitions for each. Upselling is a sales technique in which a salesperson entices customers to purchase more expensive items or upgrades to make a more profitable sale. Employees with great sales personalities excel at this.
Upselling gives you a great return on your investment. You’ve already invested the time to make the initial sale. The effort it takes to upsell is minimal compared to making the primary sale, and the upsell is much more likely to be successful. The customer has already decided to trust your recommendation with the first purchase. With that credibility, it’s easier to sell more to them now. When done correctly, upselling increases customer satisfaction. Customers want value and are often willing to spend more money to get more value. [Simplify the payment process by ensuring you have the best credit card processing solution for your business.]
However, the way you upsell is key. If the sale is framed as wanting the customer to get the most for their money, upselling makes the client feel valued. If the customer senses you are attempting to increase your bottom line, they will feel used, which could lead to customer loss or a decline in sales.
What is cross-selling?
Cross-selling involves selling additional products and services to an existing customer based on their initial purchase. The products or services involved in cross-selling complement what the customer first bought. For example, consider the common question “Would you like fries with that?” when purchasing from a fast-food restaurant. The customer orders a burger and a soft drink, which allows the clerk to sell them an additional product, fries, to complete their order and satisfy the customer’s needs while increasing the purchase amount for the business.
This sales method can increase revenue and help you retain a strong customer base. Due to the complementary nature of the products or services offered in a cross-sale, the technique can be highly effective. Once you know your customers and have formed a relationship with them, it’s much easier to make recommendations, offer discounts on certain products, or put together bundles that could save them money.
FYI: When cross-selling to customers, you want to address and satisfy their needs. It’s more beneficial to cross-sell once you have established an initial relationship and know their desires well.
How do upselling and cross-selling work?
Though the two are different, upselling and cross-selling benefit customers and businesses alike. They both encourage customers to purchase additional items or services, increasing your revenue and providing greater value to the customers. Combining the two informs customers of options, packages and products they may be unaware of or didn’t think were necessary at the time.
An example might be a customer looking to purchase a new oven. To upsell, the salesperson may suggest an oven with upgraded features, like infrared technology for near-instant heating. To cross-sell, they could recommend the customer also purchase the matching microwave that fits above the oven.
As this example shows, these selling styles can complement one another. But for either technique to work, it is crucial to know your customers and understand their desires and needs so you can make appropriate recommendations that don’t come off as a money grab.
Bottom Line: Your goal should be to respond to customers’ needs with products and services that can meet or exceed them.
How do you successfully upsell and cross-sell?
1. Offer free shipping.
Customers are more likely to buy from a company that offers free shipping. For online retailers, shipping can be included in the total product price to give the appearance that shipping is free, or you may choose to set a minimum purchase total that rewards customers with free shipping. Another way to offer free shipping is by encouraging customers to purchase subscriptions or join a loyalty program.
2. Send follow-up emails.
Customers want brands to engage with them and form a deep connection. Follow-up emails are a great way to welcome clients to your business, thank them for shopping, ask for customer feedback on products or remind them to check back in after cart abandonment. [Related article: How to Avoid Creating an Annoying Email Campaign]
3. Limit recommendations.
When upselling, more options do not necessarily increase the chances of a sale. Remember that more choices usually generate more confusion and overwhelm consumers. Successful upsells begin with a solution to customers’ problems – not more questions.
When giving cross-selling recommendations, keep the options down to a select number rather than offering 27 different possibilities. A few well-targeted suggestions will maximize your shot at a successful sale. Here’s a great example: GoDaddy limits its upselling items to just three things. When a customer orders a domain name, the system will ask if the customers are interested in domain protection, web hosting or email hosting. The company doesn’t throw everything in its arsenal at the customer, but suggests a few relevant services instead.
4. Try bundling.
Bundling encourages both upselling and cross-selling, so it’s smart to package related items together. For example, you can sell WordPress templates, plugins and logos in bundles of various combinations instead of only providing them as standalone items. The chances that a consumer will purchase all three of these items increase dramatically if they can do so with a single purchase instead of three separate purchases. This, in turn, boosts your company’s revenue.
Tip: Along with bundling, other great strategies for successful cross-selling include providing a range of price points for items that work well together.
5. Know your customers.
Mapping the customer journey with comprehensive audience research is critical to successful upselling and cross-selling. Make sure you know your customers and understand their wants, needs and preferences, so your attempts at offering upgrades or additional products seem like natural extensions to the main product.
Think about a waiter in a high-end restaurant. An effective server knows to pay attention to the preferences and tastes of regular customers. For instance, if the same couple comes in several times a month and always orders the same bottle of Argentinian Malbec, that waiter should take note of this and eventually recommend a more expensive bottle of Malbec suited to the customers’ taste, a move that would likely impress the diners and boost the restaurant’s revenue. This is a way to upsell that appears as if you have the customers’ best interests in mind.
Amazon is yet another great example of a company that effectively upsells and cross-sells based on its knowledge of customers. The company tracks customers’ orders and makes purchase recommendations based on past orders. If you have ever bought a book from Amazon, you have probably noticed that the company logs your book orders and suggests other relevant reading materials based on what shoppers with similar tastes purchased.
6. Keep the 25% rule in mind.
As a general rule of thumb, never try to upsell or cross-sell items that cost more than 25% of the original order. That means that if a potential car buyer walks onto a dealer’s lot intending to purchase a Honda, the salesperson probably shouldn’t try to upsell the buyer with a Porsche. By sticking to the 25% rule, you will avoid making outlandish customer suggestions and boost your odds of closing sales.
The same principle applies to cross-selling. Let’s return to that high-end restaurant example. Imagine that after the couple settles on a $100 bottle of Malbec, the waiter attempts to cross-sell the couple white Italian truffles, which would pair beautifully with the wine. The problem? An order of white Italian truffles will typically run around $250 for a 5-gram serving, which is probably out of the couple’s price range. The waiter shouldn’t try to cross-sell anything that costs more than $125, or 25% more than the original order (the bottle of wine).
Jerry Low and Chad Brooks contributed to the writing and research in this article.