Up-selling is an excellent way to grow your business. Encouraging your customer to buy more of the product, or an ancillary product, will increase the size of the transaction; you'll get more profit from the same effort.
Roderic Michelson is a company growth expert from Aralex Consulting. His experience has shown that is packaged and offered correctly 20-25% of your customers will take up the offer.
Up-selling is generally defined as selling a higher/better version of the same product or cross-selling an item that is related to the main product.
The beauty of up-selling is that the difficult part of the conversation has already happened. You know the customer has made a decision to buy. There is now a short window of opportunity to capitalise on this. It shouldn't be a pressurised, pushy or uncomfortable situation for the client. The easiest way to do it is to assume the customer will want to buy the item. This works well both face-to-face and online.
This lucrative approach will not happen without proper training of your frontline staff as it requires consistency. Investing in this training will reap excellent returns.
To put an effective up-selling system in place, Roderic offers the following seven techniques:
1) Create a brief benefit statement – something catchy and distinctive about your up-sell product – that you can tell the customer after they have made the initial decision to buy.
2) Help your salespeople or online customers by pre-packaging and pre-bundling. Ask yourself – what else would you need to buy if you were a customer?
3) When bundling or pre-combining items make it easy for your customers and salespeople. The pricing levels of each suggested combination should be within 20-25% of each other.
4) Is there a way to track what customers usually buy together? Amazon is successfully using the information they generate from their ordering system to suggest: "Customers who bought this also bought…"
5) If possible, let the customer handle the extra items and not just look at them. This will significantly lower the resistance to buying.
6) Ensure you reinforce the customer's decision at the last stage when they are paying; "That's a really good choice" or "This bundle is really good value" etc.
7) There is practically no time for the salesperson's initiative or extensive extra pages online so the up-sell action needs to be planned meticulously and turned into a process. Then your people need to be trained how to apply the process.
As with all other areas of your company, it is important to have measures in place to track whether you are moving in the right direction. Be sure to assess the increase in profit that the up-selling process is delivering. You should see results quite quickly – if you don't, then look back through the process to see where the problem lies. If necessary try out a different bundle combination or shift the price point.
If done correctly up-selling can significantly increase your bottom line – so be sure you refine it until its working effectively for you.