Generating more sales is probably firmly anchored in every corporate strategy. In order to achieve this goal, companies need well thought-out marketing and sales measures. With upselling and cross-selling as sales strategies, you can increase profits with your existing customers. What is upselling? And what do you have to consider?
What is upselling?
Upselling describes a sales strategy in which the customer is convinced to buy a higher quality product. As a result, the customer spends more money than planned and the retailer generates higher sales. An example of this is the offer of various mobile phone contracts. If a customer is interested in contract S, for example, he is offered a contract M which, for example, contains more data volume and is more expensive.
What is the difference between up and cross selling?
While upselling tries to sell a better, more expensive product, cross-selling focuses on selling additional products that match the main product. To stay with the cell phone contract example: With cross-selling , cell phone insurance is offered in addition to the contract, for example, or a suitable case for the selected model is also offered when a new smartphone is purchased.
In practice, the two sales methods are often combined. The dealer offers the customer both higher-priced and additional products.
What is down selling?
If one speaks of cross-selling and upselling, one speaks less often of down-selling or a down-sell. What is meant by this is the active recommendation of a cheaper product. The retailer advises the customer to downsell a cheaper offer instead of the intended product. The aim here is to find exactly the product for the customer that meets his requirements. If a cheaper product better suits the needs of the customer, then you should recommend it to them. Even if you may initially make less profit as a result, you will strengthen the bond and trust you have with your customers in the long term.
Acquiring new customers is not easy these days and often expensive. With a well thought-out upselling strategy, you can increase sales with your existing customers. Customers who have already bought from you are already positive about your brand and your products. As a result, you are more easily persuaded to buy a more expensive product or service. Used correctly, upselling increases the average purchase value and increases profitability.
What are the benefits of upselling?
- Increase Sales
Higher priced products usually have higher margins, so upselling can also increase your profits.
- Exploit customer potential to the full Existing customers
who are already convinced of your products are more easily persuaded to buy higher-priced products.
- Savings when acquiring new customers
With upselling, you are not dependent on winning new customers, but increase sales with your existing customers.
- Increase in customer satisfaction
With upselling you create a win-win situation. Your customer feels well advised and enjoys the high-quality product, while you generate more sales.
What are the risks of upselling?
Upselling carries the risk of appearing too intrusive to the customer and ultimately angering him. If the customer does not feel well advised or understood, it can happen that he breaks off the purchase process completely. Another risk is the budget. If the new offer significantly exceeds the customer’s available budget, this can also be a reason for the customer to abandon the purchase. Upselling should therefore be used with caution. The focus of the consultation should always be the customer and his needs. If the higher-priced offer can be well argued and has a comprehensible added value, the chances of making more profit are good.
Tips for successful upselling
To avoid taking unnecessary risks when upselling, there are a few things to keep in mind:
1. Maintain customer relationship
Before you begin, you should make sure your customers feel positive about you. The satisfaction of your customers is crucial for a successful upselling.
2. Respond to customer needs
You know your customers best. Use this knowledge to get good advice. Respond to the wishes and needs of your customers. Show you products that fit your needs and offer choices.
3. Stay factual and friendly
Don’t be too pushy. Convince with your competence and objectively argue the advantages of the higher-priced product. If you react too emotionally or act too aggressively, this can scare off your customers.
4. Give suitable product recommendations
Use your customer data for product recommendations. If you have saved your customer data in a CRM system, you can access relevant data centrally and view possible upselling and cross-selling potential directly in the system.
5. Choose a well thought-out sales strategy
Is cross-selling or upselling more profitable? Before you decide on a sales method, calculate which is more effective in the specific application.
6. Eliminate concerns
Take your customers’ doubts seriously and take steps to reduce them. A free trial period or a money-back guarantee can be advantageous here, for example.
Conclusion: Increase sales with upselling
Upselling is a valuable sales strategy that can help you generate more sales from your existing customers. Used correctly, it brings added value to both your customers and your business. Use tools such as a CRM system to uncover unused cross-selling and upselling potential and to offer your customers the best possible advice. This will also increase your customer satisfaction in the long term.