What is Upselling?
Upselling is a technique used to convince a customer to purchase a more expensive product or upgrade to a higher-end version of what they were originally considering.
This is done by emphasizing the additional benefits that the more expensive product offers.
For example, if a florist is trying to upsell a customer from a bouquet of roses to a more expensive arrangement, they might point out that the extra cost gets them more flowers, a nicer vase, and delivery.
Impressive Upselling Stat’s
– 72% of customers are willing to spend more on a product if they feel it is high quality. (Accenture)
– 46% of customers are willing to pay for premium products and services. (Ernst & Young)
– Only 8% of salespeople successfully upsell their customers. (The Brooks Group). This could be a luck of training or the technic on how to do it successfully.
-The probability of selling to a new customer is 5-20%. The probability of selling an additional product to an existing customer is 60-70%. (Marketing Metrics)
– Upselling results in a 400% increase in revenue per call for support calls that are resolved without the need for a field service dispatch. (Teckserve)
– Some studies have shown that upselling can be effective in increasing sales. For example, one study found that offering a subscription option increased sales by 400%.
The Advantages of Upselling
There are a number of benefits of upselling that are worth considering:
You can increase your profits. This is perhaps the most obvious benefit of upselling, but it is worth mentioning nonetheless. If you can convince a customer to purchase a more expensive product, then you will obviously make more money off the sale.
You can build customer loyalty. If you offer a superior product or service at a fair price, and then go above and beyond by upselling a customer to a higher-end product, they will be more likely to remember your business fondly and come back in the future.
You can improve your brand image. Offering top-of-the-line products can help improve the way potential customers perceive your business. This could lead to even more sales down the road. A great example of this is how Apple has dominated the mobile phone industry with high quality products.
You can increase the average order value. Upselling can obviously increase the amount of money that a customer spends with your business in a single transaction. But it can also have a lasting effect by raising the customer’s expectations and making them more likely to spend more in the future as well.
You can reduce buyer’s remorse. If a customer spends a little extra on a product and then later realizes that it was worth every penny, they will be much less likely to regret their purchase (and much more likely to tell their friends about your business).
Disadvantages to Upselling
Of course, there are also a few potential drawbacks to upselling that you should be aware of:
You could alienate customers. If you are too pushy with your upselling attempts, you could end up annoying or frustrating your customers. This could lead them to take their business elsewhere.
You might not actually have what the customer wants. It is one thing to try and upsell a customer on a product that is similar to what they are already considering. But if you try to sell them something that is completely different, they might not be interested at all.
You could lose credibility. If you try to upsell a customer on a product that is inferior to what they are already considering, you could end up damaging your credibility. After all, if you cannot be trusted to sell them the right product, why would they trust you with anything else?
You might not make any extra money. Even if you successfully upsell a customer on a more expensive product, there is no guarantee that you will actually make any additional profit. In some cases, the higher-priced product might have a lower margin than the original product.
You could create distrust. If customers feel like they are constantly being pushed to spend more money, they could start to view your business in a negative light. This could lead to them taking their business elsewhere.
When done correctly, upselling can be a fantastic way to boost your profits and build customer loyalty. But it is important to be aware of the potential drawbacks as well. Upselling is not right for every business or every customer. You will need to use your best judgment to decide whether or not it is a good strategy for your particular situation.
Store App Tips on Upselling
When it comes to selling in general, there are rules that allow both you and the customer to win and those very rules apply to upselling too.
– Be honest: Don’t try to sell your customers something they do not need or want. Just because a product is more expensive does not mean it is better for them.
– Know your products: You should be familiar with the features and benefits of the products you are trying to sell. This way, you can effectively highlight what makes the more expensive option worth the extra cost.
– Be helpful, not pushy: The goal is to help your customers find the best product for their needs, not to just make a sale. If you come across as pushy, you are likely to turn customers off.
– Listen to your customers: Pay attention to what your customers are saying and what their needs are. This will help you know what products or services to suggest.
–Build rapport – Take the time to build rapport with the customer. This will make them more likely to trust you and listen to your recommendations.
Powerful Upselling Technics
Offer an upgrade – If you are selling a product, offer a more expensive version of what the customer is originally considering. For example, if someone is looking for a large handbag, offer them the option to upgrade to a more expensive, fashionable, durable, large leather handbag.
Create a subscription option – If you are selling a service, offer a subscription-based model instead of a one-time purchase. This will allow you to bill the customer on a recurring basis, which can lead to more revenue over time.
Bundle products or services together – Offer two or more products or services as a bundle. This can be a fantastic way to upsell because it allows the customer to get everything they need in one purchase, and it also typically results in a discount which makes the deal more enticing.
Offer discounts – Offer a discount on the more expensive product or service. This is a terrific way to upsell because it makes the customer feel like they are getting a good deal.
Emphasize the additional benefits – When you are trying to upsell a customer, be sure to emphasize the additional benefits that come with the more expensive product. For example, if you are selling a pair of shoes, point out that the more expensive pair is made with higher-quality materials or has a better warranty.
Use scarcity or urgency – Create a sense of urgency or scarcity around the more expensive product. For example, you might say that there are only a few left in stock, or that the price is going up soon. This will encourage the customer to make a purchase before it is too late.
Follow up – Once you have made a recommendation, follow up with the customer to see if they have any questions or if they are ready to make a purchase.
To summarise, aside from the clear benefits, there is an art to upselling. It can be a wonderful way to boost your profits, therefore, it is important to be honest with customers and know your products.
Be sure to listen to what the customer wants and needs and build rapport before making a recommendation. You should also follow up after making a suggestion.
Use scarcity or urgency to encourage customers to make a purchase and offer discounts on the more expensive product.
Finally, emphasize the additional benefits that come with the upgrade. By following these tips, you can successfully upsell to your customers without being pushy or annoying.
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