Everyone who leaves their house will have encountered upselling and cross-selling by now. The principle is simple: when a customer has already committed to buying something, the business offers them something else too, usually an upgrade.
When that offer is a more costly version of the existing service, that’s upselling; when the offer adds extra goods or services to the existing purchase, that’s cross-selling.
Buy a burger, get fries for a reduced price. Buy a plane ticket, upgrade your luggage allowance for less. Buy a phone and get cheaper insurance. Upselling can even be used in digital sales like data quality software; buy a six-month license and get another six months for half price.
Upselling is increasingly important. The reason is that it’s generally easier to sell to a repeat customer who has already committed to a purchase than it is to sell to someone who hasn’t decided yet.
However, upselling is nothing new. As with everything, businesses have to adapt to find techniques to make it work better. Furthermore, while upselling can increase client retention and customer satisfaction if done right, sometimes customers feel that upselling tactics and techniques can be dodgy attempts to get them to spend more than they need or want to.
We’d like to avoid that, so in this article, we’re going to look at seven tips to effectively upsell your services.
1. Understand your customers
You have to understand your customers, what they want out of your service, and what they will pay for. and sitting down and speaking to a client directly, that’s even better; that way, you can understand much more of what they need. Otherwise, you can use surveys or questionnaires.
Being able to offer a customer or client what they want, especially if they know you took the time to find this out, builds trust. This is important in the upsell process, especially when people can be skeptical of companies trying to “push” products on them.
Understanding is important for upselling because you don’t want to be offering upsells that don’t benefit the customer or client. A good example of this is in real estate: while understanding a customer’s budget is important, showing customers properties with negotiable prices can be to their benefit too. In wealth management too it’s important to know exactly your customer’s long-term aims.
You can even check customer reviews to see what certain types of customers want from your service.
2. Create relevant profiles
Build a profile of your customers. As well as understanding the needs of each individual customer, try to build profiles of types of customers to offer services to. Understanding your customers isn’t just for marketing purposes but is part of a key consideration of small business management.
You absolutely do not want to offer every product to every customer, and neither do you want to offer customers or clients products they don’t want or need. This will compromise your whole upselling process.
Instead, try to build profiles of the types of customers you have and tailor your upsells to them based on their unique requirements and demands.
3. Create bundles of products & services
Bundle your products and services together when offering upsells.
Think about when you buy a flight – what things does the airline try to upsell you? A hotel. Pick-up from the airport. Priority boarding. So on and so forth. That’s bundling: offering the customer a selection they can choose from for upselling. Your customers may not want one product or service, but they might desire another.
Moreover, if they’ve chosen one upsell, they might feel like choosing another is the natural next step, especially if there’s a discount involved.
Upselling can even allow the customer to make their own upsell bundles, so they feel like they’re in control of the purchase. A great example of this is in business consultancy, where customers can often choose different packages of tailored services.
You could even use chat artificial intelligence in a live chat to find out your clients’ opinions on these bundles.
This is one of the key principles: when a customer or client has committed to buying already, adding extra purchases feels natural. This is where upselling is at its most powerful as a marketing tool.
4. Upsell from less
Clients don’t necessarily need access to your entire range of services when they begin working with you. It’s important to locate those clients which use a minimal range of services and upsell them on a greater range.
If you’re not exactly sure how your customers are using your service, then CRM software can help. You can analyze how clients use your service and from there decide when to offer them an upsell – paid access to the full product.
5. Anchor your prices
One of the tricks of upselling is to anchor your prices next to another price that seems much higher. This fools the human brain into believing that the lowest relative price is absolutely low and is commonly used as a marketing technique.
This is normally done in threes – the Magic Rule of Three.
Anchor pricing is generally good for digital and IT-based services and software that scales according to the size of a business; power dialers used in mortgage brokers or family law firms, or any business that grows in a scalar way.
6. Demonstrate evidence
A good example is short, sharp, and includes the credentials of the person giving the comment.
Just like normal marketing, upselling requires you to demonstrate that your product or service is worth buying. Consumers generally won’t spend money, regardless of circumstances, if they think they’re buying an inferior product or service.
Nobody wants to be left in the dark when picking the right cloud-based call center software. Or choosing an estate agent for a time-share or a new house.. Or anything!
Try to include in the upselling process some kind of evidence that your product or service is worth buying. A good way to do this is with reviews. You can include reviews from other customers, including star ratings, directly attached to your upsell. Especially when presented visually, this can be compelling.
Alternatively, if your sales process is more client based, you can send information directly to them, including statistics and data, showing the value of your upsell. In other words, you still have to market upsells – it just takes less time and money than marketing to a new customer.
7. Be transparent
You’ve been a customer before – you can imagine it. You know when someone is trying to sell you something you don’t need and part you from your hard-earned cash. Worst of all, not only would you probably refuse to pay, you might never come back.
That’s why it’s so important to be transparent when upselling. Be honest about the pricing you’re offering to customers – tell them exactly what you’re offering, what they’ll get, and more importantly, why.
Honesty can go a long way. This might sound like it’s just useful on the shop floor, but it’s true for building business-to-business relationships too. The same principles apply whether you’re upselling on the property market or customer support software. Customers respect honesty and transparency.
Upselling is critical to sales
Increasing sales isn’t just about writing sales proposals, a good marketing strategy, or offering discounts. There’s a world of techniques and opportunities for growing sales – upselling a service is just one of them.
We discussed seven techniques here for generating upsales and cross-sales, but you can always think of your own too. Upselling and cross-selling can be done by both a small business or a large enterprise alike.
Just remember the key principles: don’t offer customers something they don’t need, and don’t bombard them with constant opportunities. Instead, entice them with something specific and tailored that is good value for both you and them.
When they’ve committed to buying from you already, then any upsell you offer will be an easier bullet to bite. If that sounds manipulative – it’s not. You are still offering them an upgrade on their service, most likely cheaper and more convenient than they can get from elsewhere.
After all, upselling is an opportunity to build a win-win kind of relationship with your customers and clients that every business needs.
About the author:
Victorio Duran III – RingCentral US
Victorio is the Associate SEO Director at RingCentral,a global leader in unified communications and CTI software provider. He has over 13 years of extensive involvement on web and digital operations with diverse experience as web engineer, product manager, and digital marketing strategist.