To effectively leverage an upsell, you must understand that your current customers are the ideal targets for additional sales. The prime moment to encourage them to buy more of your products is when they are in the process of making a purchase. Whether they’re shopping online, over the phone, in person, via mail, at this point, they’re most open to spending a bit more. The key to maximizing this opportunity lies in presenting them with a compelling to buy more immediately.
Upselling is an easy way to encourage customers to increase their spending at the point of sale. This strategy involves offering your customers the chance to buy even more of your products at a discounted rate, once they’ve decided to buy something else at the regular price.
This technique involves setting up a special offer on one or more items and making it accessible to every customer who has decided to purchase your primary product. The more the special offer relates to your main product, the more likely it is to boost your additional sales.
The items you select for your special offer should be high-demand, fast-moving products. Ideally, these items should also have a high-profit margin so you can offer a significant discount while still making a decent profit.
For instance, if your business sells cookware, a great upsell item could be a cookbook or a set of kitchen utensils. The upsell item is given at a discounted rate, but only if the customer purchases the main item you’re selling at the standard price.
Let’s consider another example, a software company that sells desktop publishing software. Additional font sets or clip art collections would be attractive upsell items for your target market. These items would be offered at a substantial discount to encourage customers who are already purchasing your main product to spend more.
There are several methods to present an upsell. You can integrate it into your main product’s marketing copy, offering the main product as the standard version and the main product plus the upsell as a deluxe version. Alternatively, it can be presented as a special offer in a lift letter as a token of your appreciation for their patronage.
The success of upselling largely depends on numbers. Typically, 20% to 40% of your customers will be enticed by your special offer. However, to achieve these additional sales levels, you must propose the upsell opportunity to every customer at the point of sale. If you’re advertising your upsell through an ad, sales letter, or online marketing piece, this is rather straightforward. However, if customers also have the option to order by phone, make sure your sales team is trained to repeat the upsell offer to every customer.
Though there are numerous other sophisticated ways to upsell, simply implementing the steps outlined above will significantly boost your sales and yield substantial profits.