How Can Up-selling Improve My Overall Sales?
Posted on March 31, 2008 - Filed Under Business
Almost all of us have had the experience of driving through a fast food restaurant and being asked, “Would you like fries with that?” or “Would you like to super size your Coke today?” As irritating as those questions are, the people asking them are doing what a sales manager dreams about…they are up-selling! While most of us find these questions an inevitable annoyance when ordering fast food, they really are a very common, and, often very successful, selling strategy that is encouraged, if not required, in almost all sales companies, whether selling goods or services.
What is Up-selling? Cross-selling?
An up-sell offer is typically for a better (or bigger) version of the same product or service being considered. A less ubiquitous attempt to up-sell than the fast food example would be something like buying a gym membership and being offered additional privileges for a slightly higher price such as tennis court or indoor pool time in addition to the machines and free weights use you just purchased. Another example is being offered a high-speed printer or scanner when ordering your brand new personal computer for your home office.
Up-selling differs from cross-selling in that the former gives you an incentive to buy a bigger and better product than the one you were originally intending, while the latter encourages you to buy a related product or service to the one you are already considering.
Why Up-sell? And When?
Up-selling principles are intended to dramatically increase the volume and value of your sales and boost revenue for your company. There are several ways a good salesperson can up-sell his product or service, the most popular of which is offering a greater quantity of “stuff” for a slightly higher price.
Up-selling is a hugely popular marketing and sales strategy because the cost of finding new customers and clients is often high for most businesses. Up-selling existing customers maximizes a business’ return on those expenses. It’s a fairly simple strategy that any business can utilize and see results rather quickly.
Since customers are most receptive to what a salesperson has to say once they’ve already agreed to buy a product or service, offering an upgraded product at the right time is crucial. Up-selling is a technique designed to get more money from the customer at the point of sale. Many salespeople are hesitant to up-sell because they fear irritating the customer and losing the sale. Studies have shown that the opposite is true. Customers who have already agreed to buy your product or service are appreciative of your thoughtfulness in offering them an added benefit or “more for their money.”
Up-selling is really much easier than many other sales strategies, and even novice salespeople can experience greater sales success with this technique. Most marketing experts advise their salespeople to present an up-sell in a casual manner, almost as an afterthought. Make that “bigger/better” offer in a conversational tone giving the buyer the impression that you’re simply offering something that anyone with common sense would want. For instance, if you just sold someone a personal computer, you may say, “And the Model 500 high-speed color printer that accompanies the computer is only an additional $??? today…would you like to take advantage of this one-time only special offer?”
Most businesses studied have reported a 40-60% acceptance rate for their up-selling efforts. Those are substantial numbers for such little effort. Also, the profit from the up-sold portion often exceeds the profit on the initial sale.
So, those young people at the fast food restaurant encouraging us to super size our drinks might not just be doing what their bosses tell them to do, they just may be honing their up-selling skills for future Fortune 500 ranking.
Tags: annoyance, coke, cross selling, existing customers, fast food restaurant, free weights, fries, gym membership, incentive, indoor pool, personal computer, pool time, sales companies, sales manager, sales strategy, salesperson, several ways, speed printer, successful selling, tennis court
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