How to upsell
What is upselling?
Upselling is persuading a customer or client to buy extra products or services in addition to their original investment. This usually means marketing to them products like their original purchase – but these may tap into a slightly different niche and could be valued higher.
When looking at how to upsell, you may want to consider the process a part of your firm’s sales strategy. In fact, the prospect of selling to an existing customer is higher. According to the 2010 book Marketing Metrics by Paul W Farris (external link), the likelihood of selling to an existing customer can be as high as 60-70% (external link). For new customers, this figure sits at five to 20% – a jump even the smallest of businesses could take advantage of.
Overall, upselling helps to create stronger customer relationships. Show your regular customers you’re in tune with their needs with the right types of upselling and you could also boost retention.
What is an example of upselling?
One of the most common examples of upselling is something you likely come across daily as a consumer. If you receive emails from businesses you’ve recently purchased goods from, this is an upsell. Email marketing is a reliable upselling tactic that targets existing and recent customers and may offer deals, incentives, or product suggestions.
These post-purchase emails are targeted, and relevant to the consumer and their previous purchase. They push similar and, often, more profitable products and services. You know this person is interested in your offering, so why not capitalise on it?
For example, a customer may have just bought a t-shirt from your local shop. You send them the confirmation email after they check out, followed by another email, which informs them about some new designer pieces. You might tailor this to include premium apparel.
What is cross-selling?
Upselling’s sibling, cross-selling encourages existing customers to buy products that are complementary to their original purchase. Unlike upselling, cross-selling doesn’t necessarily focus on marketing higher valued products and services. Instead, it directs consumers to closely related products to garner extra sales.
For instance, if a customer buys a set of pans, you might suggest cooking utensils, or a food processor. This is cross-selling. In the services sector, you might advise clients to consider an additional service to maximise the impact of what they had originally signed up to.
Cross-selling can be part of the upselling method – both are two halves of the same coin. Cross-selling also helps to increase the average value of orders.
What's an example of cross-selling?
One popular cross-selling technique often used by restaurants sees customers prompted, either by front-of-house staff or the menu itself, to order extras. Menus will often pair complementary side orders to foods or suggest them on the page among some of the go-to items.
You’ll also notice front-of-house staff will often suggest starters, sides or desserts alongside your main meal. Fast-food restaurants often also allow you to add fries or smaller portions for a reduced price.
How to upsell (and cross-sell)
1. Know your audience
To upsell and cross-sell, make suggestions that are relevant to both your customers’ behaviours and how they select purchases. If you try to upsell irrelevant goods, you are less likely to convert those extra sales.
Knowing your audience can help your cross-selling and upselling opportunities to be as effective as they can be. You might conduct regular demographic research so you can be confident in knowing your target audience’s buying habits, average cart totals and most sought-after items.
2. Map customer journeys
By mapping the journey your customers take, from when they first encounter your company to the time of completing their purchase, you can put yourself in the shoes of your audience. This information can be used to figure out how best to upsell your products.
By becoming familiar with customer behaviours, you can optimise each step of the customer journey, both within the original purchase and through post-purchase marketing.
This is naturally part of getting to know your audience and, of course, is a way to experiment with different methods and analyse their level of reward.
3. Plot products to problems
You might post relevant products at different points of the customer journey, to make upselling attempts appropriate and consistent.
Consider linking certain products to one another. If you run an online store, you might position these as suggested add-ons on category pages and at checkout. For in-store upselling, you can place relevant items at the till, the end of aisles, or even as subsidiary products on the same shelves.
An IT consultant might schedule regular client meetings to discuss key issues and make service suggestions.
Every product will ideally match a need – perhaps one another product or service helps to illuminate. The aim is to gently create upselling opportunities. You want to avoid the customer feeling like they’re being given the hard sell.
4. Listen to your customers
Whether you run an online or brick-and-mortar business, actively listening to your customers can help you create the perfect upselling strategy.
If you notice them discussing reoccurring issues, directly address these, whether face-to-face or on your online platforms or review sites.
It can naturally help to strengthen individual relationships and improve your brand reputation if you’re seen to be solving customers’ problems. It also means you’re receiving direct feedback on how to improve your selling and marketing techniques, and learning which methods are better accepted by customers.
5. Experiment with different upsells
If you’re thinking about experimenting with upselling, there are a few techniques to consider. Consider which might work best for your business plan and the products you sell, as well as how your customer demographic shops.
To mix up your upsell techniques, you might try:
- Bundles – Bundles allow you to group complementary and relevant products together, so customers purchase more. This works with both upselling and cross-selling, depending on the type of products you bundle
- Product upgrades – Try advertising product add-ons and upgrades either as post-purchase marketing or at checkout. This method is often used by the tech industry – for example, mobile phone plans – and is most effective with long-term customers
- Product protection – Protection and warranty plans are most likely to be accepted by customers as necessary spending – especially when the original product is valuable or technology-based like a new smartphone or laptop
- Customisation – Useful if you sell online and specialise in accessories and gifts. Every customisation a customer makes to their product adds value, so you should be reminding them of this option at every point in the customer journey
- Free postage – The incentive of unlocking free postage – or another benefit relevant to your offering – after a customer spends a specific amount is a great way to bump up spend.
6. Personalise recommendations
Analysing customer data and behaviours can be the key to successfully integrating upselling and cross-selling into your business processes. By getting to know your customers, you can begin to personalise recommendations that match how they place orders and search for solutions.
You might use this information to be relevant but subtle, eye-catching and purposeful, but not too pushy. By getting to grips with what your customers want – whether you run a salon or a consultancy – you can begin to upsell relevant items to them.
7. Follow up
Your customers rarely disappear after they complete their purchase, in fact, repeat customers can be vital for further upselling and cross-selling opportunities.
You might flex your Customer Relationship Management (CRM) muscles, create targeted email marketing campaigns that follow up post-purchase, or simply pick up the phone. The art of the upsell is rooted in connection, so it’s possible in family and micro businesses as well as tech start-ups.
Marketing campaigns allow you to experiment with different ways to upsell, in terms of how you personalise products and how often you push for further purchases. You could also include things like discounts and seasonal codes to help build B2C relationships.
Upselling and cross-selling can easily become an effective part of your small business strategy. Figuring out how to integrate upsell techniques into your business isn’t as complicated as you might think.
When used correctly, upselling can help to strengthen the relationship you have with your clients and customers, creating great opportunities for your firm’s reputation as a problem solver.
At Hiscox, we want to help your small business thrive. Our blog has many articles you may find relevant and useful as your business grows. But these articles aren’t professional advice. So, to find out more on a subject we cover here, please seek professional assistance.