Upselling is a major revenue source in most business paradigms, often driving large financial gain without the effort and expenditure of prospecting for, and marketing to, new clientele. Most business strategists would agree that upselling is, by comparison, an economical tool to drive sales in terms of both time and resource investment. Accounting for an estimated 30% to 35% of all revenue in many industries, it is critical for any business to have a well-designed and well-executed upselling strategy.
So how do you propel clients to spend more purchasing dollars than they had initially intended? Apply these four basic upselling principles to breathe new life into your sales strategy and maximize your marketing budget.
1 - Work Your Data
Any business collects data on its customers, often utilizing sophisticated customer relations management or case management software. At every client interaction, data that guides a future upsell is collected. Buying trends, social demographics, political affiliations, economic bracket and even personal information such as anniversary dates are all useful for gauging the right time and approach of an upsell. For instance, even the most frugal client may be emotionally persuaded to enhance services you already provide around the holidays, or to surprise a loved one for a special occasion. If your business does not already utilize a relationship management software, consider testing one of the countless products offering a free trial.
No matter what your product, being relevant to your clientele in any upsell marketing strategy is key to your success.
2 - Make a Deal
A good rule of thumb is that no upsell should ever exceed more than 50% of the original contract or purchase. Even more so, it should seem like a logical enhancement to the existing product or service. If you sell electronics, a warranty should be presented as a clear added value; a travel company selling a cruise may seamlessly upsell a luxury cabin by presenting the benefits of the extra room and additional amenities. No matter what the product or service, the upsell should seem both valuable in quality and reasonable in price. A well-crafted upsell should feel like not only a good deal but also an investment.
3 - Give Your Guarantee
Most consumers are smart and can smell an upsell a mile away. In order to retain your client’s trust and encourage a purchase outside of their normal buying habits, savvy businesses offer limited-time no risk offers, unconditional guarantees and heavily customer-oriented promises of satisfaction. For ongoing services, conceptually clients become reliant upon the enhanced package and willingly enter a long-term upsell agreement.
4 - Never Upsell at the Point of Sale
It’s hard to resist, but the most successful businesses never attempt to upsell at the point of sale. An old tactic of negotiation training, it is of paramount importance to gain your clients trust that they are receiving the best price and the most straightforward product when you have your first encounter. Prior to establishing a firm relationship with a client, avoid any strategy that may seem too aggressive or calculated. Allowing your product or service to speak for itself in the initial sale may seem counter-intuitive, but it’s the surest way to position yourself and your business with integrity.
In the end, the most lucrative part of an upsell is not the instant gratification of one sale, but rather, the extended gratification of providing your best and most exclusive services or products to a client who has invested in you. These are the long-term relationships that build your business’ reputation and drive your brand, so be a careful steward of your most valued clients. Set a quantifiable goal for upselling revenue when you develop your strategy, and apply these simple principles to maximize your existing client assets.