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How to Upsell: 6 Strategies for Success

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If you’re in the business of selling—whether products or services—you’ll also find yourself in the business of upselling. Upselling often has a negative connotation, but when done correctly, it can match your customers with the best product or service for their needs while also increasing your revenue. 

Learning how to upsell is a crucial part of any business marketing strategy. Ready to learn more? This guide will define upselling and also explore several strategies for how your business can use the technique. Let’s get started.

What Is Upselling?

Upselling is the sales technique of enticing customers to buy a more expensive version of what they already want to purchase, and in turn you get to increase profit margins. While making money is a driving force for any business owner, upselling can also be done with the customer’s best interest in mind—in some cases, the customer isn’t sure what they need, and you can guide them to the best choice.

The general idea is to increase the money earned on a sale by encouraging the customer to go for a more expensive or premium product. Think about it in terms of the latest phone on the market: You go into the store thinking you’ll get a version that’s a year or two old, and the salesperson convinces you to spring for the newest, and most expensive, one they sell instead.

If customers can get the best value out of a purchase, find an option that better suits their needs, or get their hands on something they thought was out of reach, that’s great. If the business can make more money from that upgrade and form a greater bond with their existing customers, even better.

5 Tips for How to Upsell

Below, we’ll cover some tips on how to upsell without feeling like you’re duping your customers or putting their best interests to the side.

1. Get Personal With Customers

When it comes to upselling, it’s key to make a personal connection with the customer, even if it’s over something small. “The thing about selling is the minute someone gets on the phone or walks in the door, you have to make a connection,” says Ronna Pratt, who managed her family’s Pittsburgh deli and catering service, Food for Thought, for several years.

The true art of how to upsell comes into play when establishing a relationship with customers—and that only works if you’re willing to get personal. Learning more about the customer and what they actually need can help you determine the best product or service to meet those needs. 

“For catering, you have to ask questions about the people they’re serving, the type of event they’re having, what their needs are,” says Pratt. “Because then you can make recommendations specific to the people who will be there. Once they feel like you’re concerned about the welfare of their party or the success of their event, they start kind of playing into that. Maybe they say Aunt Sally is a vegetarian and then you can talk about Aunt Sally, and why you’d want to make sure she’s happy.”

2. Use Customer Data 

This is perhaps the most classic example of upselling: You can always add things onto an order to make it more complete. This is where customer data is especially useful. Based on past customers’ purchases, you may notice trends in items often purchased together or the purchase of one item leading to the purchase of another in a few months. 

With this data, you can recommend more products to your customer—whether with a “customers also purchased:” pop-up on your website or targeted emails that take your customers’ purchase history and any demographic data you have on them into consideration. This is where CRM software can really come in handy and help automate the process, so you’re not letting potential sales slip through the cracks.

3. Offer Personalized or Specialty Items

Upselling isn’t always about offering a customer a more expensive option. Sometimes it’s about creating a better option to please the customer, without increasing your base costs too much.

“The best thing is to always make something out of things you already have. So if you have a customer looking for an item you don’t normally make but you have all the ingredients for—whether it’s making food or any other type of business—if you can make that for the customer, you can automatically charge them more for it because it’s ‘special,’” says Pratt.

You can get out ahead of this by repurposing existing items into something you can sell at a markup, but still provides great value, as a special. If that item sells well, you can work it into your regular rotation.

4. Understand the Perceived Value 

Something to consider when selling items to customers is their perception of value. If customers feel that they are paying too much for something—even if it’s an item they know and love—they will walk away. So it’s important for businesses to continue providing value, whatever the cost.

“With … inflation, our products were costing us more,” says Pratt. “But rather than decreasing the amount of food we gave, we increased the price slightly and increased the amount of food slightly so we maintained our margins. Nobody noticed, nobody complained, people still bought the food.”

When it’s done right, a good upsell leaves both sides—customer and seller—feel like they’ve “won.” Selling to an existing customer is way easier than selling to a new customer, so keeping your existing customers happy with a high-value perception is crucial, especially if you want to maintain trust and continue to sell—and upsell—to them in the future.

5. Offer Incentives

Another upselling strategy is to offer an incentive of some sort to entice a customer to spend more. One of the most common incentives a business can offer is free shipping when customers spend a certain amount. Shoppers will often add more items to their order to meet this shipping threshold—even if it means spending more in total than they would have if they kept their original order as is and paid the shipping fee.

Other incentives to drive the upsell include offering a free gift with a purchase of a certain amount, a discount on a future purchase, and exclusive content or access. Understanding your customers and what they value most will help you determine what type of incentive will resonate with them the most.

6. Follow Up

Lastly, don’t forget to follow up with your customers. Whether they made a purchase or not, there’s still an opportunity to either provide them additional value or make an initial sale. Sending emails when a cart is abandoned or after a purchase is made can help you stay connected to your customers while also showing them what else your business can offer.

If your business depends on more personal one-on-one interactions, try scheduling phone calls with customers to check in, find out how their product or service is working for them, and provide solutions if they have additional needs. Not only is this a great way to provide excellent customer service, but it presents opportunities to upsell.

Cross-Sell vs. Upsell

In any discussion on how to upsell, cross-selling is also likely to come up. When comparing cross-sell vs. upsell, it’s important to keep in mind that while upselling typically refers to the sale of a more expensive or premium version of a product that a customer is considering. Cross-sell, on the other hand, refers to selling complementary or related products or services in addition to the what the customer was originally intending to buy.

A common example of cross-selling is in the insurance world, where customers may purchase homeowners insurance and are then are targeted for car insurance and travelers insurance too.

Another example that’s common in the travel industry is when you have the option to bundle a flight with a rental car and hotel. In theory, cross-selling can save you money to purchase the items together—of course, you’re still paying more than if you only purchased the original product you were shopping for.

The Bottom Line 

To upsell is to provide your customers with a better value—through more expensive but better products, through the creation of new products altogether, or through adding more to an order to maintain margins. At the end of the day, we buy things to make our lives easier and happier. Make a better sale, and usually you’ll make a better purchase as well.  

Keeping your customers needs in mind can not only help you sell them the best product (whether it’s the more expensive one or not) but also help ensure that they’ll be loyal to your brand and shop with you again.

The post How to Upsell: 6 Strategies for Success appeared first on Fundera Ledger.

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