The act of up-selling is a time-tested way of improving the profit you make when you sell. Up-selling simply means convincing your customer to invest in a more expensive, or otherwise more profitable, product than the one they were interested in.
Up-selling is different to cross-selling, in which you try to persuade the customer to buy extra products that complement the one they’re interested in. You can use both techniques to maximise the return you make.
Here are our tips on how to up-sell successfully.
Read your customer
As any good sales person knows, a successful sale means knowing how to ‘read’ the customer and understanding what their reason for buying is.
For example, if you’re selling cars, a customer who wants a large vehicle suitable for a young family will have different priorities to a young single person looking for a flashier and less practical sports car.
By looking for these signals, you can focus on the factors that are important to them. In the case of the ‘family man’ customer above, you could persuade them to buy the more expensive car by emphasizing its safety features, whereas the sports car customer could be more interested in profitable luxury upgrades such as leather seats.
Customer relationship management
In the long-term, for repeat customers, you can use your customer relationship management system to store data on buying history and patterns. This can be a really useful source of intelligence when it comes to marketing and personalising your customer service.
Good relationships with your customers are generally a great way to increase loyalty and customer satisfaction, making them more receptive to up-selling offers.
Know your profit margins
Up-selling doesn’t just mean promoting the more expensive models you offer. Sometimes you may have two products which are similarly priced, but one is cheaper to produce and therefore has a higher profit margin.
In this case, you can simply steer your customer towards the higher-margin item, without the risk that they’ll be put off by a higher price.
Up-selling on services
You can also up-sell on services – for example, by negotiating a bigger or longer contract than was originally planned, or by adding a more expensive service (such as a ‘platinum’ maintenance contract or extended warranty) to a product purchase.
Adding an attractive discount (which doesn’t bite into your profits too badly) can be a good way to secure this.
Approach with caution
It’s important to make sure that any up-selling suggestions are timed carefully. If you rush in before the customer has expressed a strong interest in the lower-priced product, you could come off as pushy – and lose the sale.
Consider training your sales force, so they have all the information at hand and know how to make up-selling suggestions at the appropriate point.
This article is provided only for general informational and educational purposes. It is not offered as and does not constitute legal or other professional advice on the subject matter in question. You should not act or rely on information contained in this website without first seeking professional advice on the subject matter in question.
This article was originally published on 11 March 2015, and updated on 08 June 2017.