How to upsell in a tough economy
This article was previously published in the Apr/May issue of Your Business Magazine.
Whether it’s due to a competitive industry, a tough economy, or a combination of the two, businesses need to think outside the box to generate leads. And remember – new business doesn’t have to come from new clients. In this article we share ways to provide maximum value to existing customers and increase revenue.
But before we look at ways to upsell, let’s unpack what it means, and how it differs from cross-selling. Upselling is the practice of encouraging customers to buy a higher-end product or service than the one in question; whereas cross-selling tempts customers to buy related products that satisfy additional, complementary needs.
A simple example of cross-selling is when you order a quarter chicken from Nando’s, they ask whether you want a side or drink with it. Chips, wedges and a side salad all complement the meal. The same applies when you’re checking out of an online store; the shop often lists similar or complementary products that you may add to your cart, or buy next time.
Consider American airline, JetBlue’s “Even More Space” initiative, which allows passengers to buy seats with more legroom. This upsell was projected to net JetBlue $190 million in additional revenue in 2014 (compared to $45 million in 2008, when it first launched). On a broader scale, one can look at statistics from the travel industry: 48% of airline passengers and 59% of hotel guests are interested in upgrades and additional services, which means that you could be leaving money on the table if you neglect to research upsell options in your industry.
The key to success in both cases is to understand what your customers value and then respond with products, services or features that meet those needs.
Build strong relationships
Long-standing relationships and loyal clients are worth gold. Nurture them, and never side-line dedicated customers when you are busy with new business development.
Constantly over-deliver and exceed expectations. Make yourself 'irreplaceable'.
Identify clients’ needs
Don’t presume you know what your customers want or need – ask them. You need to understand their hopes, dreams, fears and challenges. To do this, set up one-on-one calls; catch up over coffee; or email them a quick survey to complete.
Also be front footed and see what other your clients’ competitors are doing to address these needs. Find solutions (or be the solution) for these anticipated problems.
Define your offering
Next up, figure out how you can help them achieve their goals or overcome challenges. You need to find ways to really add value to make the additional expense worthwhile. Also make sure your pricing is fair and competitive, without selling yourself short.
For example, one of the products we upsell at Yellow Door Collective is a succinct, professional and beautifully designed Company Profile document. This is useful for businesses to have on file to send to suppliers, investors and a whole host of other partners; rather than sending them an overview of the brand via email each time.
Paint a picture
To excel at upselling, you need to help customers visualise the value they will get from the higher-priced item. Whether it’s a 30-second video, an infographic, or a well worded email – take the time to explain not only what the product is, but how it will benefit them or their business.
Giving away a reward or incentive can increase your upsell/ cross-sell conversion rate. For example if you have an online store, you can offer free shipping above a certain price point. You could also offer a discount if they purchase two or more products or services.
Ensure your team has the knowledge and expertise to implement or create the relevant service or product. Another great option is to find a non-competing service provider to complement your offering and agree on a referral or commission structure. This way you can expand your offering without increasing the number of staff you employ.
In closing, remember that there’s more to upselling and cross-selling than just pitching add-on products. Focus on your customers’ needs, and then craft your approach accordingly. Try to upsell quality rather than quantity.
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