Is upselling a dirty word? Are you afraid of turning customers away with pushy sales tactics?
Upselling doesn’t have to be annoying or intrusive. When done right, it helps strengthen your relationship with customers and delivers a better experience. (Oh, and it can drive profits, too.)
If you want to maximize your sales efforts, upselling is key. And it starts by understanding your customers and offering the right product or service at the right time.
Let’s talk about upselling: what it is, how to do it, and how it's different from cross-selling.
What is Upselling?
This tactic is intended to drive up the average order value while better meeting your customer’s needs.
Consider this: When you go to a movie theater and buy a medium popcorn, what does the cashier ask you?
“Would you like to upgrade to a large for only a dollar more?”
That’s upselling! Upselling is a smart sales technique because it targets leads who have already made their way through the sales funnel and are ready to buy.
Take our popcorn example. It’s pretty straightforward to train your cashier (read: salesperson) to ask customers if they’d like to upgrade their popcorn–and it won’t cost you a thing. On the other hand, it’s challenging to appeal to new customers who skip the concessions and go straight to their seats.
Upselling vs. Cross-Selling: What’s the Difference?
Upselling and cross-selling are both ways to increase overall customer value– but they aren’t the same thing.
Cross-selling is the process of identifying two complementary products and selling both of them to the customer. By adding additional items to the shopping cart, you are obviously increasing the average order value.
Upselling, in contrast, is about offering an upgraded or premium version of the product or service that the customer already wants to buy.
Kajabi does a great job of cross-selling its customers. The platform offers methods to create online courses along with complementary tools that will enhance the courses, like coaching programs and podcasts. These options increase the value and usability of the product for each customer (and increase the customer’s bill, which is a win for Kajabi).
The main difference between upselling and cross-selling is this: Upselling encourages the purchase of a more expensive product, while cross-selling suggests add-ons or related products that ultimately increase the customer’s lifetime value.
Cross-selling is especially common with ecommerce outsourcing businesses, as demonstrated on product pages and during checkout.
Vistaprint does a great job of both cross-selling and upselling to its customers. When you’re ready to check out with your custom business cards, they offer to put your logo on coffee mugs, pens, mouse pads, envelopes, and the moon (just kidding on that one). They also upsell by suggesting business cards with higher-quality images or a gloss finish.
Upselling is about considering the customers you already have and increasing the total value of those acquired customers. You’ve already nailed the sale; make the most of that mutually-beneficial relationship.
In any case, both upselling and cross-selling aim to increase the total order value from each customer.
5 Upselling Sales Strategies to Increase Customer Lifetime Value
When done properly, upselling is an effective way to increase the value of a customer for your company– but it can also improve the customer experience by delivering more value.
Here are some of the best upselling strategies to help you enhance that value.
1. Understand Customer Needs, Recommend Upsells of Value
Understanding customer needs is important in sales, but it's absolutely crucial in upselling. After you accurately assess customer pain points, you can articulate how and why a premium version is the right choice.
The key here is to focus on how your solution will make their lives (or jobs) easier. For example, if you sell a marketing analytics solution with multiple tiers, you should be able to explain why the “gold” tier is the better option, based on their needs:
“Last time we talked, you mentioned that generating reports is a key struggle for your team. With our gold tier plan, you can entirely automate reports, saving your team lots of time each month.”
You can also leverage your social media, email lists, or customer service reps. Customers might call you to ask questions about specific products or services. These are excellent opportunities to really listen to your customers' needs and get to the bottom of pain points.
Consider using the data you already have to find upselling opportunities. If you use a CRM (like Close), you probably have access to data that shows you what products a specific customer purchases, and when. Account executives can use this information to upsell their offerings to similar customers.
Understanding what your customer really wants makes it easier for you to sell and it helps you build trust with your customers. Win-win.
2. Don’t Oversell
Remember: Upselling helps you build strong relationships with your customers. Sales professionals are often viewed as cut-throat and slimy. You don’t want to be viewed that way, so make sure you deliver value.
When upselling, base your recommendations on true customer needs. Approach it with this attitude, and it’s hard to go wrong.
Understanding their needs keeps them engaged throughout the sales process. If your customer is on the phone with a sales rep who continuously offers them unrelated products or wants to sell them an expansive (and expensive) package they don’t need…you aren’t winning here.
In contrast, offering a version of the same product that delivers more benefits demonstrates your care and understanding. This is key to upselling!
Here’s another key to upselling: Don’t oversell. Know when to draw the line.
If your customer needs web hosting to build their new website for a business that has three employees and no reportable sales, they probably want something affordable. If they sign up for your $8 per month Introductory Plan, you can safely assume they won’t be interested in upgrading to the Enterprise Business Plan for $399 per month.
The general rule of thumb is that your upsell shouldn’t increase the purchase price by more than 25 percent unless you’re certain the customer will benefit from it.
3. Build Trust and Develop Rapport
Upselling isn’t just about selling. Many people have a negative view of upselling because they think it's a high-pressure or forceful tactic. It shouldn’t be.
The goal of upselling is to develop a relationship with your customers by understanding what they need and answering the call. This demonstrates to your customers that you understand them and are looking out for their best interests.
Question is, how do you do this online? It’s very different when you’re in-person or on the phone. How do you build trust and rapport on a website?
Live chat has become a popular option. It shows customers that you are available and can answer their questions, provide product recommendations, and follow up with any post-purchase concerns.
4. Preach Benefits, Not Features
Sales psychology involves honing in on human emotion and selling them “improvement." People buy products they believe are going to improve their life in some way.
As a salesperson, you need to understand that customers don’t buy from you because your product is fast, reliable, or the flashiest option.
They buy from you because of the benefits – because you save them time, money, and allow them to “dress to impress.”
Every action a person takes is motivated by their desire to change something about their lives. If you upsell products that help your customers lead better lives, they’re more likely to make the purchase.
5. Be Quick to Pivot Your Upselling Strategies
Upselling is a great way to increase revenue and the average order total per customer. However, pressuring your customers to buy something they don’t need is never smart. Don’t think of upselling as a shortcut (and keep the four previous points in mind).
Don't be stubborn if something isn’t working or customers aren’t biting on a specific upsell. Change your plan, offer another option, and do it quickly.
Also, remember that sometimes customers may not even know exactly what they need until you inform them of a new product. If they purchase something and you know you have the ultimate super-powered product to go with it, show them why buying both is the right choice.
Educating customers on your products is not only a great way to upsell, but it also helps build trust by displaying your expertise. Being flexible enough to adjust your offer on the spot will help you appeal to a wider audience and increase revenue.
How to Identify Opportunities for Successful Upselling
Knowing how to upsell is one thing, but how do you know when to upsell? Upselling opportunities arise throughout the customer lifecycle.
Before the Sale
The sale (and upselling) begins the moment someone enters your store, whether online or in the real world. The hunt is afoot. Try offering options that are cheaper, and others that are more expensive than the product the customer is looking at.
This type of price variance will almost always help you increase sales because you’re appealing to a wider audience. If the product is too expensive, they might go with the cheaper option. If the previously selected product isn’t exactly what they need, you’re offering the premium option.
Upselling at Checkout
Now you have a paying customer. This is the best time for the upsell. You can upsell or cross-sell related products when the customer is with their cart or at the checkout page. At the checkout page, inform customers of other products you have that will enhance their current selection.
For example, if someone is signing up for a yearly subscription to your email marketing tool, offering them a CRM or data scraping tool is probably a reasonable upgrade.
Upselling at checkout is also the perfect time to offer something that improves the functionality of the product they’re buying. If your small business sells knives, a knife sharpener would enhance the knife's functionality.
Upselling After Purchase
Once someone has completed their purchase, now is a great time to offer upgrades.
If you’re selling software as a service, you could sell advanced support or a “done for you” type service. ClickFunnels offers something similar. You can sign up for ClickFunnels and set everything up yourself … or you can sign up for ClickFunnels and pay for their experts to do everything for you.
Upselling Best Practices: Selling Add-ons & Additional Products
If you understand your customer and you know why they come to you, it’s a lot easier to sell add-ons and additional products to increase the total order value.
Here are some best practices.
Create Urgency
Fear of missing out, aka FOMO, is a great way to motivate customers to make an impulse buy or purchase something without overthinking it.
A tried-and-true method to create a sense of urgency is by offering a limited-time discount. The moment the customer clicks away from the page, the discount is gone. And guess what? It isn’t coming back. When your upselling offers have a time limit, it pushes the customer toward making the purchase right away.
Keep in mind that offering incentives like this doesn’t have to cut into your profits; these are sales you wouldn’t have earned without a discount. (However, we do recommend making sure you’re not hurting your bottom line by over-offering discounts!)
Use Social Proof
Ecommerce brands rely heavily on social proof. Social proof is a sign of reliability and trust that shows your customer how a product or service will impact their life. This can be in the form of a review, a testimonial, or even a picture of someone using the product.
By offering social proof on an upsell pop-up or on the checkout page, you’re motivating the customer to make a decision based on emotion. They’ll see the social proof and feel like whatever it is they want is attainable and genuinely beneficial.
We frequently see social proof in the beauty industry. A balding man sees a before-and-after of a hair loss serum and feels compelled to buy it. This works because he sees the results he wants, and feels emotionally drawn to the solution.
Don’t Be Greedy
Upselling is a great way to increase revenue, but it’s also a great way to turn customers off. Avoid recommending products that are outside of a customer's price range. Even if you convince them to take the leap and buy, they’re not going to be left with happy and confident feelings after their experience with you.
The whole point of upselling is to create a mutually-beneficial situation. Customer satisfaction leads to repeat customers. The best sales strategy is the one that makes your customers the happiest.
Similarly, don’t coerce a customer into a product they don’t actually need. If whatever that is sits on a shelf collecting dust, you can’t expect them to do business with you again or tell their friends about you. In their minds, you’re just as useless as the unnecessary product you sold them.
Upselling needs to be a long-term game. The goal is to increase customer lifetime value which requires, by definition, the customer to come back again. Don’t focus on one single sale; focus on a lifetime of sales.
3 Upselling Examples that Work
Learning all this info is great, but seeing it applied in the marketplace will help you tie everything together. Let’s look at some clever upselling examples that you can use for inspiration.
Vistaprint
This is just one example of an upsell on Vistaprint; this ecommerce brand approaches customers with tons of upsells throughout the checkout process.
As you’re designing business cards, you can upgrade the design, quantity, paper thickness, paper finish, and much more.
They also offer other relevant products and persuade you with the prospect of free shipping with a minimum order value.
Squarespace
Squarespace is a website builder that offers a variety of packages ranging in price. What you pay determines what you get.
As you can see, at the Personal level you’re missing out on a lot of options that you receive with the Business or Commerce levels.
With a side-by-side comparison, it’s easy to feel like you’re not getting what you need from the most basic package. That said, it’s still offered.
The company isn't pushing you into one over the other, but instead providing a range of options that appeal to a wide audience. Squarespace also offers a 14-day free trial so you can test out your selection, design your website, and then make your final decision.
Spotify
Free Spotify users can skip six songs per hour. When they try to skip another song, they’ll see this screen. It’s right up in their face but not over the top. Spotify isn’t coming right out and saying, “pay us now if you want this feature,” but you can assume that’s what they’re looking for.
Hiding premium features behind pay barrier windows is a great way to tempt users and make it easy for them to upgrade on a whim.
Upselling Builds Successful Customer Relationships
Upselling creates a unique opportunity for business owners and sales professionals. Use these situations to strengthen your relationship with customers and exceed their expectations. You can increase your value with little effort, as long as you take the time to understand their needs and appeal to customer pain points.
Utilizing customer data is a great way to determine what your customers want, and it increases your chances of approaching them with the right upsell.
Close can help you compile and organize the right customer data so you can see exactly what your customers are buying, and design upsell campaigns around those products and services.
Interested? Take a closer look at Close with this demo and sign up for the free 14-day trial.
