Selling your services or product to existing customers has always been one of the easiest, and most effective, ways to increase your revenue and profitability.
There have been countless studies conducted over the years that demonstrate that it’s much more cost-effective to generate revenue by increasing sales to existing customers than it is to go out and find new ones.
Of course this doesn’t mean that your sales team should put new business generation on the backburner, but it does mean that developing effective upsell and cross-sell strategies into your business will grow the balance between new and existing customers, improve customer loyalty and the services you offer, and promote innovation.
What is the first step to creating your upsell and cross-sell sales strategies? First you need to understand the difference between the two techniques.
Upselling is where you encourage your customer to purchase a product or service which is a comparable higher-end product than the one in question (to put simply, a more expensive product).
Cross-selling invites customers to buy related or complementary products or services in conjunction with the primary product (in other words, a product which will enhance their original purchase).
Though often used interchangeably, different scenarios with different customers can call for one specific approach over the other. Both offer distinct benefits and can be effective when used in tandem. Upselling and cross-selling are mutually beneficial when done properly, providing maximum service and value to customers while increasing revenue without adding much cost in terms of delivery or marketing.
The Art of Upselling and Cross-Selling
In order to master the art of upselling and cross-selling, there are 5 key areas to understand:
- Understand your customer and their needs.
- Ensure the products you are offering are relevant.
- Create need.
- Demonstrate value.
1. Understand your customer and their needs
Unfortunately some business owners still have the misconception that digital marketing is enough for marketing their products and services. What they don’t understand is that 85% of customers still rely on the human touch and the sound of a human voice!
A deep understanding of your customer’s needs is what will dictate whether your upsell and cross-sell strategy is successful. The only way to truly understand your customer is to do your research. It is not enough to simply settle with your past experiences with this customer or on what you already know about their business. You need to keep your knowledge up to date and fresh, by merging what you already know about your customer together with up-to date insights about their industry and business.
By doing this, you will have a true and clear understanding of what matters most in their world.
2. Offer upsells and cross-sells that make sense
You don’t want to bombard your customers with product suggestions – after all, they’ve already made a purchase from your company so you’re trying to help them achieve more success by offering other suggestions they can use.
There are limited opportunities where you can upsell or cross-sell, so you want to ensure you are offering products or services which will have the greatest impact and offer the highest degree of relevancy. For example, if I am purchasing a printer, I might like to upgrade to a higher quality brand or buy some paper or ink with it, but I won’t want to buy a lawn mower.
Suggesting a cross-sell or upsell that’s completely out of left field will not only frustrate your customer, but it could endanger their relationship with your company.
3. Create need
Relevance is the critical thing to consider when offering a new product. If cross selling it needs to complement the customer’s original purchase and enhance their package. If upgrading to another product the additional expense needs to be validated by a return on investment. Take the time to explain and educate, and most of all respect that they may not know what they don’t know!
4. Demonstrate value
Once you’ve clarified that an upsell or cross-sell makes sense for your customer, the job isn’t finished just yet.
You need to demonstrate to your customer that they not only need the secondary product but of the value it will bring to them and that the purchase will ‘pay for itself’.
You can use things like positive customer reviews, case studies and testimonials, to show your customers how they can use the additional product you’re pitching to achieve their goals and how it has been profitable for other customers, whether this has been done by enhancing productivity or saving further out of pocket expenses in the future.
Make sure the value is clear to your customer so they can make the decision on their own – without pushy sales-y pitches, but by them making a logical choice.
In order to increase the success of your upsell or cross-sell, use the knowledge you have about your customer and their business to approach them at the optimal time.
The correct time for an upsell might be at the point of purchase of the original product, when they are already in a buying mood, when you contact them to follow-up on how their purchase is working for them, during a customer support interaction when the benefit of an upsell is clear, or when you hear of them celebrating a success such as winning an award or landing a big deal.
Always ensure that your customer feels taken care of and important to your business, and remember, upselling and cross-selling should always come second to the primary purchase.
What You Need to Remember with any Sales Technique
Honesty is the most valuable quality you can have. If a customer feels at any point that something is not quite ‘above board’, they won’t hang around. The more open, honest and transparent your sales team are during the purchase process, the more likely your leads will become customers and loyal advocates of your business.
Contact VSS Australia if you would like to discuss how we can assist you with increasing your revenue.