Landing a sale is great. After all, the more sales you have, the better it is for business. But increasing the amount of money your customers spend on each sale is even better. In essence, that’s the definition of upselling - using a sales strategy to persuade a customer to buy an upgraded or premium version of the product or service they’ve already purchased.
Upselling vs cross-selling
With upselling you’re persuading the customer to buy a more expensive version of the same product. With cross-selling, meanwhile, you’re encouraging them to buy an additional product, related to the first sale. It still focuses on adding value to the original sale but with a similar product rather than a better version of the same product.
Example of upselling: An online accounting software company offers its most basic package for free, but customers can unlock more benefits if they upgrade to the premium version.
Example of cross-selling: When booking a haircut through a salon’s online appointments system, a pop-up appears offering them a special rate if they add on a colour and restyle too.
Why should I upsell?
Employing an upsell strategy is a smart thing to do because it can increase sales and boost profits. The probability of getting an existing customer to buy is 60-70% but for a new customer it’s just 5%.
The customer benefits too because they get a superior version of a product that can better fulfil their needs. That way, they too will walk away feeling more satisfied with their purchase.
How to use upselling
The upsell you use will depend on your business-type as well as whether it’s done by your sales team or automated as part of your payment system:
Shop Floor: Your staff can act as upsellers while people are browsing and choosing what they want. For example, waiting staff in a restaurant could offer customers the option to add chicken or prawns to their salad for an additional cost.
Point of sale: Your POS is a great opportunity to upsell and cross-sell before the transaction is complete.
Ecommerce businesses:You can include upsells in your online store on both your product pages and at checkout.
Email marketing: Send emails to customers who’ve just bought with you, persuading them to upgrade to the next level of product by offering a limited time deal.
- Do provide product comparisons so customers can easily see the difference between versions
- Don’t be too pushy - if a customer says no to your upsell offer, accept it and move on
- Don’t recommend something which is considerably more expensive than the product being bought
- Do focus on the added value and how it can meet customer needs
- Do make a one-time offer such as a discounted price to seal the deal
- Do make sure the customer knows the risks if they don’t take advantage of the upsell
Frequently asked questions
What do you mean by upselling?
Put simply, upselling means persuading a customer to buy an upgraded or superior version of your product or service at a higher price. This will increase your revenue and profits.
How to measure upselling
You can measure its effects through average customer order value. Increased order value, for instance, may indicate a successful upselling strategy. A boost in the customer conversion rate and an increase in products per order can also reflect upselling success.
What is the importance of upselling?
Upselling is a critical technique in any business not just to increase sales values but to build customer loyalty. If a customer perceives the item they’re upsold to be of better quality or value, they go away more satisfied and far more likely to recommend your business to others.