The art of upselling and cross-selling is a staple in almost every business environment, and when done well it can be hugely beneficial for the business and its customers. Businesses will need to be aware however of implementing it poorly, because it can result in some huge downsides to how a business is perceived and its long-term success.
What is the difference between Upselling and Cross-selling?
Upselling can be considered to be the action of recommending the customer to buy a more expensive version of their original purchase through upgrading or a premium. A very common example is being offered an upsize for $1 at a fast food restaurant.
Cross-selling on the other hand is recommending the purchase of other products that work alongside their original purchase. Keeping with the fast food restaurant, “Would you like that in a meal?” is a classic example of cross-selling, as the side of chips and drink will complement your purchase of a burger.
What’s the big deal? Originally your customers had no intention of purchasing anything more, but now they’re forced to at least consider it. This can ultimately increase your customer’s average order value across multiple upsell and cross-sell opportunities.
So where can this go wrong, and how should you be approaching it instead?
Aggression is never the answer.
Implementing a pushy approach to your upselling and cross-selling can be hugely detrimental to the customer experience. An aggressive upsell can include things like suggesting products that are completely irrelevant to a customer’s needs or offering things that increase the bill significantly over the customer’s expected budget. Upsell at the wrong time, and it could turn customers off from purchasing at all.
Customers can be put into quite an uncomfortable position where they may be thinking: “Is this business just trying to milk as much money from me as possible?” At this point you might be overstepping your boundaries. They may be your customer at that point, but don’t expect them to be coming back to you anytime soon.
Considering that the probability to make sales from recurring customers is 70%, compared to 20% with new customers, it is vitally important to make the best impression from the get-go.
Instead, your upselling should be about solving the customer’s needs, not offering them undesirable things that would cost them an arm and a leg.
Aiming to maximise profits? You’re shooting at the wrong target.
Upselling and cross-selling can no doubt increase your revenue and profit, but the need to make sales shouldn’t be prioritised over offering the best customer experience.
When sales is the number one goal, you may tend to blindly promote products with complete disregard for the context and the particular need of your customers.
Striking a balance is key, and is done by learning to assess the context of each interaction. When you get the opportunity to upsell or cross-sell, promote solutions that can be of great value and most importantly relevant to the customer and their experiences. Add a drink to their meal on a hot day, or offer to include extra of their favourite toppings for a small fee, anything that could help the customer.
Customers will feel that you are invested in providing solutions that can better their outcomes, and not just as a business with dollar signs for eyes.
Timing is Key.
There is a time and place for everything, especially when asking customers to fork out more money.
When is it a bad time to upsell to a customer? For one, when they are in the middle of a problem and are asking for help to resolve their issue. It probably is not the most ideal time to be selling an upsized burger while they’re complaining about the burger they had the last time they were here.
Hence, it is of great importance that you and your employees are able to gauge the situation and determine if or when upselling or cross-selling may be a viable option.
All in all, it will be handy to pay close attention to how your business handles upselling and cross-selling to see whether or not any of the above warning signs appear in your process.
A simple way to ensure that aggression, timing and overall intent is controlled in a way that boosts your customer experience is to teach your employees to be comfortable in sales situations and develop their awareness of when the best time to upsell/cross-sell may be. Make sure your employees are well informed about all your services and products and encouraging them to listen carefully to your customer’s needs so that the most informed upselling/cross-selling decisions can be implemented.
Remember that balance is key to enhancing your income while also providing a kick-arse customer experience.