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What is Upselling? How Does it Differ From Cross Selling?

You’ve probably heard of upselling, and you may have heard the word used in a negative context. But that’s only because there have been companies who didn’t use it in the way they should have. The truth is that upselling, meaning upselling done correctly, can benefit both you and your customers. In this article, we’ll contrast upselling with cross-selling before looking at how you can use these techniques for mutual benefit – making more sales revenue while also having more satisfied customers

What is Upselling?

When a customer approaches you in the hope of buying a product and you offer them something similar, but with a higher price-tag, that’s upselling. It’s easy to see how that could backfire, but it can help customers to make choices that better match their needs. For example, your customer may be trying to buy an item that won’t have all the functionality and features he or she will need. In that case, it’s wise to make them aware of the benefits of choosing a higher-priced item as an alternative. 

What is Cross Selling?

The cross-sell vs upsell can be confusing, but when we look at a simple definition, the difference becomes clear. Cross selling means offering your customer related products in addition to the one they were about to buy. They’re things that customers are likely to want once they have the item they’re ordering, so giving them an opportunity to buy everything they need at once saves them time. 

For example, if you’re selling mobile phones, you can offer your customers mobile phone accessories like covers, protective films, or charging stations. As with upselling, the aim is to leave your customer feeling positive about their purchases while simultaneously boosting your revenue. 

Upselling Best Practices and Importance

It’s easy to see that upselling can do good things for your bottom line. But knowing about upselling and knowing how to upsell are two different things. Your aim is to benefit your customer as part of the deal – not to leave them feeling like your hard-nosed sales tactics make doing business with you unpleasant. Here are the principles that distinguish good upselling from dodgy salesmanship. 

It’s personalised. Even customers who buy the same product do so for different reasons. For some of them, the basic package is all they need. But listening carefully to customers and asking them the right questions could reveal additional needs that your business is able to satisfy. 

It’s well-timed. Upselling doesn’t have to occur at the same time as the initial sale. You may find that customers are ready for an upgraded version of your product or service after several months or even years. On the other hand, someone who has chosen an item that won’t meet their current needs must be informed of the possibility and offered an alternative right away. 

Don’t overdo it. You offered the upsell. The customer thought it was a great idea. But the next thing you do is to offer several other options with progressively higher price tags. They can be pardoned for thinking you don’t necessarily have their best interests at heart. Keep it simple. 

Talk benefits. How will your upsell help your customers? If you can’t nail down the benefits clearly, you’re taking a shot in the dark. If there are no real benefits, don’t offer it. If there are, explain them compellingly. Tech specs aren’t enticing. Their benefits to your customers, on the other hand, are. 

Offer a sweet deal. This is a cross-selling technique. Bundled products that work together to meet needs associated with product ownership, and that cost less than they would if bought separately, are a great example. 

Solve their problems. Good salespeople are great listeners. They don’t just rush through with the sale. Instead, they pay attention to the reason why their customers are making a purchase. If the item they’re about to buy doesn’t solve those problems as well as a costlier alternative does, it’s time for the upsell. 

Offer tailoring options. Nowadays, buying a car isn’t just a matter of choosing the make and model. You can opt for any number of extras that personalise the purchase. It’s part of the sales process, so it’s what people expect. They’re ready to think the options through and might opt for the upsell. Thus the product itself is designed to support upselling techniques but will work just fine if the customer doesn’t want the extras. This principle can work well in other contexts too. 

Steps Involved in Upselling

The first step in upselling is to make buying the product the customer initially wanted easy. However, you don’t want them to walk away with an option that won’t suit them. Being able to discover the motivations that lie behind their purchases is among the skills top sales operatives have. If everything checks out, and the customer has chosen a product they’ll be satisfied with, it may be best to skip further upselling attempts and just go ahead with the transaction. There may be opportunities for upselling later on. 

Before you close the interaction, however, you may want to check whether your customers need the extras that come with cross-selling. After all, they complement the purchase currently being made and agreeing to purchase them may benefit your customers. 

At this point, however, upselling and cross-selling aren’t as important as a great customer experience, so tell them what the benefits are and why you think they might need extras – then leave it up to them. Right now, you’re working on building a positive relationship. If you succeed, you’ll be able to keep them informed about new developments and make more sales later. 

As you can see, successful upselling depends on the circumstances in which it occurs and the needs of the customers you serve. Knowing what will be welcome advice from a salesperson, and what will be seen as time-wasting and cut-throat sales tactics takes empathy. Upselling can be a mutually beneficial exercise, but knowing when to do it is almost more important than knowing how to go about it. 

Upselling is More Effective When Real People Do It

You’ve probably encountered a fair amount of automated upselling and cross selling. For example, the “you may also be interested in” items you see before you complete an online purchase. Or have you ever chosen a free version of software only to find that you really want the paid-for functionality – or the ad-free experience? In the latter instance, you probably acquiesced out of sheer frustration! As for the “might also wants,” you’re likely to have taken a glance and declined. 

Truly effective upselling means gauging the individual customer’s needs based on a relatively brief exchange between real people, and it takes empathetic people with great product knowledge to get it just right. RSVP has a handpicked team that delivers superb customer experiences, and they know just how and when to pitch the upsell or cross-sell. If you’re wishing you had a team like this on your side, there’s good news for you: we’re at your service, because service is our core business. 

Our London-based customer lifecycle management service offers unbeatable customer service and sales personnel. We serve you by serving your clients, and our goal is to achieve better results than anything your business could achieve in-house. Are you ready for happy customers and better sales? Contact us today and let’s work together!

 

Read more about the Customer Lifecycle.

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