Upsell & cross sell to more profits..... #43
- Adrian Dionisio - business737 owner
- Dec 6, 2021
- 5 min read
Updated: Apr 4, 2024
Have you been to McDonald's and they ask you about if you want to supersize your meal ? That’s upselling. Then they ask you if you want an apple pie or ice cream? That’s cross selling.
Upselling is offering customers a more expensive, upgraded or premium version of the chosen item
Cross selling is offering other products or services which complement the item the customer is interested in.
Remember this simple rule; the customer has to be asked. One third of customers will buy additional products or services at the time of their original purchase IF they’re asked to do so. Most businesses don’t ask and they lose out on this opportunity to increase revenues. A regular, systematic commitment to consistent up-selling and cross-selling will dramatically increase profits .
The philosophy of Up-selling and Cross-selling
Think in a clear and logical way. Your present customers trust you. They have entered into a buying relationship with you. You have already gained their trust. Now you have the opportunity to show them another level of products or services that they can take advantage of. Ask yourself three questions;
What else do my clients want?
What can I offer them now?
What can I offer them that my business doesn’t have, but could find from another business?
Typically there are no costs involved when implementing an upsell and cross-sell strategy. We can use a restaurant as an example. A restaurant should analyse profit margins and determine what are the highest profit margin items that they sell (usually drinks, appetisers and desserts).
The restaurant can double sales on these by training staff to offer these to all customers. Staff should bring wine and appetiser card before clients order. Free samples should be offered. Repeat the same process with the dessert after the meal. This can very easily double sales.
An order upsell strategy can also be implemented. Staff can be trained to describe the most expensive items and also to give their personal recommendations. Customers have a tendency to go with the staff’s recommendations. As a business you have to take the initiative and make the offer. This will significantly increase revenue.
Synergy in design
Up-selling and cross-selling can be designed to work together in a simple yet effective way. When you have the best interests of your customer at heart you can provide them much better value. You will also increase the revenues and profits in your business. Everyone walks away a winner.
Up-selling and cross-selling can rapidly increases profitability. Unfortunately, many businesses waste this opportunity. They don't consider these strategies as a necessary part of their company policies and procedures.
If a customer chooses a particular item, you can induce them to upgrade and buy something that costs a little more (up-selling) and brings you a little more profit. Make sure that the offer is in their best interests. Also, for each item that you sell, think of complementary items that you might offer that would make the offer more attractive. If you're ready to give compelling reasons why a customer should buy something else from you, then you have understood the concept of cross-selling.
Upselling Examples
A consultant can design their program as a long-term deal and make it a win/win for all parties.
A car mechanic can up-sell to a more in-depth maintenance package
A dry cleaner can up-sell to a one-year cleaning program.
A house cleaner can up-sell to a one year house-cleaning service.
A gardener can offer a regular maintenance service
A coffee shop can sell larger cups of coffee.
Advertising services providers can sell a larger space ad for just a little more than a smaller space.
These are all examples showing how any business can up-sell to a greater package with a higher sale value that creates a win/win situation for both the business and customer. The customer will spend a little more up front and you might get a little less over the long run but overall it's better to lock them in long term because this guarantees that they'll come back.
Service based businesses can benefit from offering different levels of service. A service business can have three different offerings—Silver, Gold and Platinum.
Silver is the basic package, but make it really easy for people to take the Gold package by making the bonuses as valuable as the core service itself.
It can be an ideal up-sell because bonuses are digital delivery, so it won't "cost" anything so profits are higher. Customers will receive a higher level of service and it is in their best interest to take the Gold package.
Cross Selling Examples
Cross-selling is the process of selling complementary goods or services that are related to the original product or service that the customer wanted to buy.
For example a hair salon. Many customers go in for a "cut and colour" but normally come out with an extra shampoo, conditioner, and extra excuses why they should return to that salon. These are other examples of great cross-selling.
If someone asks for a burger, you sell them fries and a drink.
If someone asks for a haircut, you sell them a manicure.
If a painter is asked to paint the exterior of the house, they would ask to paint the interior as well.
If that same painter went to buy paint, perhaps the store clerk could sell them extra tools, tape, drop cloths, rollers or brushes.
If someone wants to buy a suit, you sell them a belt and some ties.
If a lady wants a new dress, you can also sell a matching sweater, shoes, a purse or jewellery.
Timing is crucial
Implement a staff policy to up-sell and cross-sell. Educate staff to understand the impact on your business and on their livelihood. Prepare scripts and training if and where necessary. Decide what up-sells and cross-sells you want to offer, ideally looking for items with high profit margins wherever possible. See what impact it makes on your business. Keep refining your up-selling and cross-selling strategies to make so that they are effective in serving the customer at the highest level.
The best time to ask your up-sell / cross-sell question is just before the customer is about to pay for their purchase. It has to be after they have committed to the initial purchase. Once they commit they're in a purchase mindset. This has to be timed accordingly because after they pay for their purchase, they have mentally closed the transaction.
It does not generally make sense to offer discounts on products or services they would otherwise have bought. Ask if they need anything else BEFORE you complete the transaction. If they say no, then ANY additional sales you make amount to additional profit you would have otherwise missed out on. This is the time to mention the up-sell and cross-sell items.
4 rules to remember
#1 - OFFER CUSTOMERS A GREATER QUANTITY
#2 - OFFER A COMPLEMENTARY PRODUCT OR SERVICE
#3 - OFFER A RELATED PRODUCT OR SERVICE
#4 - OFFER A HIGHER LEVEL PRODUCT OR SERVICE
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