Upselling is convincing a customer to purchase a product that is more expensive, more profitable, or more premium. For example, a broker might entice a customer to purchase an enhanced and more expensive insurance policy in an upsell.
Cross selling is convincing a customers to purchase additional products in addition to the one they initially intended to buy. For example, that same broker might entice a customer who is purchasing a life insurance policy to also purchase a car insurance policy.
Upselling and cross selling strategies can help small business owners generate more revenue and profits. These sales techniques can also engender customer loyalty by exposing customers to other ways your business can benefit them. This article suggests techniques to upsell and cross sell successfully, no matter what type of small business you run.
Make Sure To Communicate Enhancements (Upsell) And Additional Products (Cross Sell)To Your Customer
Before your customer can purchase a better or additional product, they need to know what you offer! Think about ways you can communicate additional add ons to your customers without being annoying. Bill Flynn of Catalyst Growth Advisors suggests using four simple words to suggest additional products: “Oh, by the way.” He gives an example that an air conditioner maintenance company might use: “Thank you for trusting us with your business. Oh, by the way, did you know that when our customers get their A/C started up for the season, they often ask us to check their ducts for maximum air flow.” He explains, “Most of your clients are not aware of all of the services that you offer or have long forgotten. Four simple words can make a noticeable difference in increasing revenue.” Other methods to communicate your products include strategic placement of products in your store or at checkout and follow-up emails.
Be sure to integrate an upsell and cross sell into your marketing funnel by segmenting and targeting customers appropriately with offers via email or social media that will appeal to them. Your existing customers are a tremendous asset to your business, as they already have exposure to your product and have already converted – you can use marketing techniques to convince them to purchase again. Keeon Yadani, Chief Marketing Officer of WE R CBD, a seller of CBD products, has created a robust email marketing funnel for purchasers. One a customer makes a purchase, they will receive a series of emails – the third email is designed to upsell/cross-sell customers. WE R CBD promotes case studies and expiring discount codes in this email to incentivize customers to purchase additional items.
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Add Features To the Product or Purchase Process to Nudge A Customer Towards a Larger Or Sooner Purchase
- Use Social Proof. Features like “People Also Buy” and “Often Bought Together” spark a natural curiosity to see what other people are doing and can encourage customers to browse additional products. Social proof can deploy in many forms and can increase sales. Some ecommerce businesses use a pop up in the corner mentioning other purchases as they occur (e.g. “Tommy in Little Rock just purchased 3 shirts.”) Kevin Olson of Capital Tech Solutions explains that this feature can be viewed skeptically by some customers, “People may see this as a suspicious feature because you can set these pop-ups up to include fake orders. I predict that this feature will go away soon as people will see right past them.”
- Offer Synergistic Add Ons By Bundling. Brian Robben of Robben Media has also had success offering “related services in the proposal. We’ll add logo design, SEO, and paid ads options to get a bigger proposal price. These work beautifully and add more value to the customer.” Take this strategy and apply it to your business. Try to select items that logically go together or complement each other. E.g. If a potential customer is buying a baby bottle, you might also suggest buying bottle brushes for cleaning.
- Communicate Scarcity. Show customer remaining inventory quantities or an expiration date (“limited time!”) so that they feel compelled to purchase before items run out. E.g. “Only 9 left in stock.” Be truthful with customers here – do not lie about your inventory just for the sake of creating scarcity – customers are more attuned than you might think and you could lose their trust.
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Offer Your Customer Something Appealing In Exchange For Buying A More Expense Product or Buying Something Additional
You are likely familiar with being offered discounts in exchange for buying more. Everyone loves a deal and customers will be more inclined to consider that incremental purchase if they get a valuable benefit in return.
- Add $25 more to get free shipping
- Buy 3 Get One Free
- Order sizes over $100 get a free gift
- Order sizes over $100 get a 10% discount to use next time
- Order sizes over $100 can apply a specific type of coupon code
- Buying X and Y together allows you to get free shipping
Display Prices and Features To Your Customer In A Way That Is Easy To Understand And Nudges A Customer Towards The Most Profitable Option
Many companies will deploy a three price option strategy that allows customers to compare prices and features to choose the product they prefer. Brian Robben, CEO of Robben Media, suggests packing “the most value in the middle option (the most profitable option) and use the first price as an anchor and the top price as a comparison to get the customer to select the middle price.”
The Opposite Sales Strategy: Try Out A Downsell
Some customers may actually become more likely to purchase and repeat purchase if you can earn their trust by downselling. Tom De Spiegelaere, founder of Tom Spicky which provides digital marketing services to businesses suggests offering customers “a related product at a lower price or a reduced price. You can also offer them a special discount coupon. This will build trust and show your customers that you genuinely care about their needs.” He also suggests trying to identify new customers who may respond well to a downsell, which can include those who sort items by price or completely abandon their cart and ignore retargeting emails.
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