What is upselling?
There are many different opportunities within the sales life cycle that you can take advantage of. One, in particular, we are looking at today is called upselling.
Known as the technique behind persuading customers either to upgrade to a more premium version of the product they've already chosen. This is not to be confused with cross-selling.
This is for example trying to sell someone a phone case during the same pitch where you're selling them a phone.
Upselling at first glance can seem like a very invasive technique. Looking to maximize the revenue that you're getting from a single sales pitch or a single customer.
However, you need to ensure that when you're upselling that you're selling the benefits of what they could be upgrading to in comparison to what they have already.
Why is upselling important?
There are many reasons why you should start embedding upselling into your overall business sales strategy. For one, it starts to help you deepen and strengthen your relationship with your existing customers.
They will appreciate that you took the time and effort to tell them about a product that could more efficiently or more thoroughly solve the problem that it was already.
Which benefits both them and their business as well as your business.
When it comes to who you should target with this technique, it can be both new and existing customers. However, studies have shown that it is far easier to upsell to existing customers rather than new ones.
Taking out the lead generation cost which can sometimes be costly, and instead, rely on the rapport and relationship you have already built up with your customers.
It is also beneficial when it comes to increasing the customer lifetime value within your business. Simply put this is the value that a customer has to your business over time.
Customers typically fall into one of three categories; not profitable, profitable, and very profitable. As you start to upsell to customers they start going from the latter to the former end of the scale.
Therefore increasing the revenue your business is getting without any additional investment.
Differentiate between cross-selling and upselling
As we mentioned at the start of this blog, it's very important to not get this confused with cross-selling. Although it is understandable why the two are commonly confused with one another.
Cross-selling mainly focuses on trying to sell a complementary product at the point of sale whereas upselling is focusing on a premium equivalent of the original choice of product.
In sales it is common however that businesses will combine the two to maximize their revenue at the point of sale. One of the best examples of this is when you go to upgrade your phone if you're on the contract.
A lot of the time you will not only see phones that you can upgrade to, but for an extra cost per month, you can get accessories such as headphones.
Combining both cross-selling and upselling to ensure that CLV is increased as much as possible also allows the customer to ensure they've got value for money.
It also ensures that your business is optimizing revenue as much as possible which in turn maximizes your turnover at the end of the year if both effectively and consistently used.
Some tips for upselling
In summary
If you haven't yet included this technique within your sales strategy it's imperative that you do. Along with cross-selling, it can not only help you to increase the number of sales that your business is generating, but also the value per sale. Overall this can have a huge impact on your business's revenue and will help your brand start to grow dramatically.
If you want to know more about what sales opportunities your business still hasn't exploited and should take advantage of, why not have a chat. I've worked with businesses of all sizes from across the country to grow and maximize their sales to help their businesses grow.
And keep an eye on my page to find out what other tips and tricks your business can start to adopt and implement to help your brand grow and to grow sales within your business both through digital and in-person means.