Without knowing it, we deal with upselling every day. Have you ever been through a McDonald’s drive-through only to be asked if you like to upgrade into a meal? When you’re a customer, noticing an upsell attempt is easy.
That is why it is hard to put an upselling strategy into place as a business. You relate to all the times people have tried to upsell you. You also remember just how annoying it can be.
However, it doesn’t have to be annoying. There are ways to effectively upsell without annoying. Check out this small guide from CBS-CBS.com to learn how upselling can benefit your small business.
What is upselling?
Upselling is the act of offering an additional product, feature, or service to a customer or client after they have decided to purchase from you. Upselling benefits your business by increasing the profitability and size of each sale.
Upselling comes into play when the customer has already signaled intent to purchase and is ready to complete the sale. They are already interested in doing business with you. Now, all you need to do is improve the bottom line to get customers to add to their purchases.
Once you learn how to identify it, you will see that this technique is used every day.
How to make upselling benefit your business
Check out these three things you have to know to make upselling benefit your business:
Understand your costs
Before trying to upsell, you need a good understanding of your profits. To do it correctly, you must understand:
- The cost of your products and services- How much does it cost to deliver and produce your product?
- The cost of customer acquisition- How much does it cost for you to acquire a new customer?
When figuring this out, talk to an accountant or bookkeeper to further identify your costs. Don’t just consider the basic materials. Ensure that you consider packaging, commissions, labor, branding, and any other costs.
Identify your upselling goals
Once you understand your costs, separate your products and services into two margins. The high-profit margin, and the low-profit margin. Then, you need to pick out your high-margin items to upsell. That is where you will get the most leverage.
It is a good idea to identify your upselling goals and understand how much you want to profit from the upsell. With upselling, you get more profit for little effort. After all, upselling is nothing more than simply asking questions.
Create intriguing offers
When upselling, ensure that you pick out offers that are more than complementary. The basic offers as well as the upsell should appeal to the same buyer. However, the items should remain unique enough that the buyer sees the added value.
By creating intriguing offers, your customers will be more likely to accept your upsell attempt.
The bottom line
Make sure that you’re not too pushy or overbearing. Some customers will jump at the opportunity while others remain uninterested. If you push too hard, you could turn your customer off completely.
Always let the buyer make their own decisions.