What is Upselling and How to Upsell

Maximising profits is the foremost aim of every business. This is the ultimate target of all those efforts that we term as sales techniques or marketing efforts. Upselling is one such technique, which is now being employed by many companies to promote the sales of their products and services. If you have never heard of upselling, let me explain to you that it is a technique where a salesperson tries to make the sale more profitable by motivating the customer to buy more additional or/and expensive products and services. Practically, the success of this technique is based on the smartness and knowledge of the sales person. If he or she understands a particular customer’s psychology, needs and the budget, it becomes quite convenient to put forward more specific offerings.

A skilful salesman knows how the art of making a customer buy more by simply informing them about the benefits. Once the customer is convinced that his current purchase can be immensely improved by purchasing some more items, he/she will definitely look forward to understand the proposal. Upselling is a very useful tool that any one can utilise for expanding the sales. So let us understand more about the methods that we can use for upselling.

Read Your Customer’s Mind

In a rush to sell more, you must not forget to understand your customer’s original needs. If you try to load the client with information before he/she has placed the order, you are on the wrong track. This hurry can not only put off the customer but also make you lose the actual sale. To avoid such situations, you first need to understand your customer’s requirements and wants. Promoting the products that are not related to your customer’s original business with you or is useless to them can put them off you completely.

Create the Need

Remember that every customer is different. So make sure to understand the original needs first and then offer the additional products that can prove valuable for the customer, giving him/her more materialistic and mental satisfaction. Once you are familiar with your customer’s mental and emotional state, you can easily create the need for your products. For instance, if the customer is buying a leather bag, you can suggest a waterproof polish that will increase the bag’s durability.

Honesty and Customer Satisfaction

Every marketer can understand that customer retention is greater than one time benefit. So if you don’t want to lose the customers forever, don’t try to dump your junk upon them. Answer all the questions of your customers and explain the product’s benefits honestly. This straightforward approach will definitely increase your credibility while giving you some really good word of mouth publicity.

Why Upselling Can Be So Profitable

Upselling is such a profitable strategy as it utilises the fact that your customers already trust you, as they have already decided to purchase from you. Let’s consider the very common takeaway example. Say a customer walks into your takeaway shop and orders a burger for $5.00, you’ll have some mark-up on that obviously and may make $1.50 (30% profit) now that’s not too bad. However, if you add a little extra effort and ask “would you like a drink with that”, and they say yes, you have just made an upsell. If the drink is worth $3.00 and you make your profit of $0.90, you’ve taken your overall return to $8.00 and overall profit to $2.40 over 60% more than your initial profit.

The dollar values may seem small, but multiplying these numbers you’ll quickly see the significant difference in profits. Now in an online business world it’s obviously not the same as a takeaway shop however the idea behind the upsell is still the same, the example above is just for an easy world situation you may be able to relate to. In the online world you may be providing paid educational forum access and your profitable upsell could be to have an exclusive VIP area or even an extended membership period option.

Most Profitable Upselling Model

The most profitable Upselling Model as seen in the flowchart below is aimed at keeping the customer within their initial actions. For example, if the customers makes a choice to purchase a high end product they are already in the mindset of spending big and there is higher chance that they would be prepared to spend even more. This is as opposed to a customer choosing a low end product whom would more than likely not consider spending even more then the initial high end product, however would still consider an additional product of lesser the same or only slightly higher value.

A clear understanding of the nature and advantages of upselling will definitely motivate you to use these techniques in your business. You can go ahead with your ideas and create better sales with the art of upselling. It works!