Up-selling and cross-selling can often be overlooked by smaller
retail businesses by becoming too focused only on finding more
customers in order to increase sales.
Yet, cross-selling and up-selling are extremely effective ways
of boosting sales and can often involve far less advertising and
marketing effort than is involved in hunting down new
clients.
In a nutshell: up-selling is offering a customer more expensive
items or services, usually compared, but related, to the one they
have chosen. It is presenting them with more. Often an inducement
is involved, such as a reduction in price if more money is spent,
free postage or some other benefit.
That's up-selling. Cross-selling is slightly different in that
here an attempt is made to sell something in addition, but related
to - the first purchase. Buying a pair of shoes from the high
street shoe shop, for example, and a customer will almost always be
offered a special polish or treatment to look after
them.
Of course, the two can happen simultaneously and many larger
businesses do just this - Amazon is a great example with its many
suggestions of other items you may like based on your purchases and
its suggestions of combinations of items based on other people's
buying patterns.
Such strategies are anything but simple to execute and are based
on complex algorithms. But, in principle, both cross and up-selling
are fairly straightforward strategies and offer positives for both
the trader and the customer. Be warned, though: execute these
simple techniques clumsily and they can backfire quite
spectacularly.
With this in mind, here are seven tips to help any business get
up and cross-selling right:
- Stay focused. Always consider customers' needs
first, before getting carried away trying to meet arbitrary goals
you may have set for up-selling. Essentially, this means don't
waste the customer's time trying to sell items or services that
aren't relevant to them or their purchase. If you do this, you will
only succeed in annoying them and damaging the credibility of your
business into the bargain.
- Keep in touch with your customers. Follow up on anyone
who has bought previously - use emails, mail shots, SMS - anything
that the customer has opted into. Be selective in the use of these
channels, or, again, you will end up irritating your
customer. Use these channels to draw attention to upgrades on
previous purchases, servicing and relevant
accessories.
- If possible, always try and create a genuine reason for a
customer to respond to an upsell, other than the simple reason that
a product or service is a better one than the one they've selected.
Create genuine reasons for the customer to select the upgrade, not
just slick marketing spiel. Perhaps, a higher level and more
expensive product may work out cheaper in the long run; or it may
be a service package that covers more risk and gives a customer
peace of mind.
Following on from this, you should also consider trying
to…
- Create product or service bundles or levels - that is,
different levels of a service or products so as to make the
difference between what's on offer very clear. So, if you offer a
basic version of a service, for example, this is clearly identified
as being the cheapest; but then give reasons why upgrading to a
higher level of service may well be more cost-efficient, and up to
a third level and why this might make sense, and so on. You
may use price here as well - while paying more for a package of
products or a bundle of services, a cost breakdown could show a
discount on what the individual services would normally
cost.
- Create credibility. Use customer experiences (testimonials) and
highly rated services or products to guide potential buyers.
Show reviews and testimonials that have relevant and concrete
content. This really helps strengthen the association between
your brand and being credible and, vitally, drives the credibility
of what you may recommend.
- Do your sums - free postage, or shipping as it's known, is one
of the commonest upsells. Spend over a certain amount and shipping
is free. But, make sure this is actually cost-effective for your
business and that it will improve your bottom line. It may not
always do so on all goods supplied.
- Analyse what you do. Evaluate what works best and then try and
refine that.
