As Business Owners and Entrepreneurs are you:
- Always striving to maximize Profit?
- Also increase Revenue?
- But, failing to boost your Average Transaction Value?
Then, you need to introspect a bit!
And that too quickly!
Because new customers usually come with an investment of more time, energy and money.
Here lies the solution to your predicament – ADOPT
Sales Techniques of Up-selling, Down-selling and Cross-selling to augment your Revenue.
While expanding your business, for God’s sake do not ignore your most potential market, which in effect, is your Current Customers.
Significance of Up-Selling and Cross-Selling in Sales
Up-selling, Down -selling and Cross-selling present an incredible opportunity. Neglecting them can turn out to be detrimental.
Mind you, acquiring a new customer is many times more expensive than keeping a current one.
Hence, working on Upselling and Cross-selling is a far more profitable way to grow your business. It makes pure business sense!
There is always intense competition for client trust in sales.
Up-Selling and Cross-Selling grant a cushion to increase the value for customers. It is the perfect way to meet both Revenue and Profit Goals.
Cross-Selling and Up-Selling are strategies to earn more revenue from existing customers and attain huge ROI.
Using Up-Sells, Down-Sells, & Cross- Sells to Grow Revenue and Improve Customer Loyalty
Ups-selling, Down selling, and Cross-selling are essential Sales Techniques.
Used strategically, they can increase profitability and take your business to the next level.
All big organizations including Amazon, Apple, Tesla, etc, are using these techniques to help buyers buy the right products and increase their sales.
Meaning of Up-Selling
Up-Selling helps you sell a more expensive version of the product to a customer than they are going to buy.
Up-Selling works effectively when you educate customers about the upgraded offer
You must explain to them what they are missing.
How these missing features can help them achieve their goal.
Up-Sell is a strategy to sell a superior, more expensive high-end version of a product that the customer already owns. Alternately, the same product with value-add features enhances the perceived value.
Up-Selling is encouraging the purchase of anything that would make the primary purchase more expensive with an upgrade or premium.
When to Use Up-Selling
Up–Sells are appropriate when:
- The individual is on the cusp of making a purchase.
- When your salesperson knows as much as you possibly can about this customer and their persona.
- The customer does not know exactly what he wants— but you do, and you are able to explain how a higher-priced or more advanced product or service will be of more value to him.
- When a buyer is about to purchase.
- When you have a better product.
Examples Of Up-Selling
- While buying a phone, you get an offer for an upgraded version.
- While ordering food at restaurants, you are given a choice to add dessert.
A general rule is to offer something that is 25% to 35% expensive.
Meaning of Down-Sell
When a customer does not purchase the product and is about to leave, you offer them a basic version of the product at a lower price.
This increases the chance of converting a visitor to a buyer.
Down-selling is the opposite of Up-Selling. It can be effectively used when a buyer has declined your product or service offer. You can offer them an alternative product that has minimum features at a lower price.
When to Use Down -Selling
Down sells work when:
- A product or service is out of the prospect’s price range.
- The customer is hesitant to make a commitment.
- The customer is ready to walk away.
- When the customer is walking away.
- When you have a basic version of the product.
Down -Selling Examples
- Offer a cheaper product.
- As the visitor is about to leave, you offer a discount.
- You offer a one-time offer to buy a package deal at a lower price.
- Free shipping.
Meaning of Cross-Selling
Cross-Selling is about selling a product that is related to something your customer has bought.
For example, if someone has purchased a mobile phone, you can offer a mobile case or mobile warranty.
The warranty is the most common Cross-Sell.
Cross-Selling is different from Up-Selling and Down-Selling.
In Up-Selling and Down-Selling, you try to sell the high-end or low-end version of the product that a customer showed an interest in.
However, in Cross-Selling, you are offering customers to buy a different product or service after the customer has made the purchase.
Cross-Selling is the recommendation of any other product to be purchased in combination with the primary product.
This sales technique is used to get customers to spend more by purchasing a product that is related to what is being bought already.
Cross-selling is encouraging the purchase of anything in conjunction with the primary product.
Cross-Sells should be used when:
- A customer is at the point of sale.
- You know exactly what he wants to purchase..
- You have a supplemental product or service to offer that will enhance the customers’ experience and help them reach their goals.
- A complimentary product.
- Bundle package.
- Extended warranty.
Up -Selling Strategies
To induce customers to buy a superior product:
- Promote your most sold or most reviewed products.
- Make certain that Up-Sell products are not more than 25% costlier than the original product.
- Analyse customer persona and make relevant suggestions as per their interest.
The advantage of a Down-Sell is that even if customers do not buy the product, they are at least buying something if not the primary product.
- You get some return for your sales effort.
- As a customer they will have a good experience.
- Satisfied, customers are much more likely to buy higher priced items from you in the future.
How to Cross-Sell and Up-Sell
The best practices to Cross Sell and Up-Sell are:
- Know your target audience.
Use demographic and psychographic information about your customers, along with customer feedback, to create personas for your customers and understand their goals and their challenges.
2. Map out customer journeys.
Map out customer journeys to identify how they will use your product — and how it will help them grow.
3. Think about problems and offer solutions deal with products.
Devote some time to review your product offerings.
Align them with your customer journey.
Consequently, you will have a clear idea of common challenges your customers face.
Also, exactly which of your products you can try to Cross-Sell or Up-Sell as a possible solution.
4. Practice active listening.
You might be able to cross-sell or upsell to your customers during a phone call or over an email exchange.
It is necessary to hone in on your active listening and reading skills for signals your customer might be ready to hear your offer.
Advantages of Up-selling and Cross-selling
Both business owners and customers can reap various advantages from the
Powerful Sales Techniques of Up and Cross-Selling:
1. Increases Profits
Once you have gained your customer’s trust, there is still an incredible number of investments they could be making with you if you use upselling and cross-selling to your advantage!
2. Increases Customer Loyalty
The point of Up-Selling is to give the customer all of their options so they can make for the purchase.
3. Increase in ROI
Signing on new customers can be a costly undertaking.
Up-Selling and Cross-Selling to your customers allow you to see a profit quickly and receive a better return on your investment as it is closely related to Customer Satisfaction.
Happy customers are the best form of advertisement that you cannot buy.
4. Increases Customer Lifetime Value
Upselling or Cross-Selling bring in a greater initial profit.
The increase in customer loyalty will pay rich dividends over the long run.
5. Balances Growth Between New and Existing Customers
Maintain the balance of healthy ratio of new to existing customers to help to ensure that your business is making a profit.
6. Offers Convenience and Flexibility for Customers
While doing Up-Sell or Cross-Sell, a customer is given the convenience of staying with you and the flexibility to choose what they need.
Requirements for Successful Upselling and Cross-Selling
1. Develop Trust via Communication
It is vital to keep engaged and in contact with customers, and potential customers to understand what they want.
Customer’s trust will then result in a more expanded business.
2.Track the Customer Journey
Customers tend to communicate through more than one medium when they are serious about purchasing.
An integrated CRM will let your entire company to understand the specific customer and allow anyone to both cross-sell and add to the customer journey.
3. Be a Sales Consultant Rather than a Salesman
Become an expert in what your customer needs.
Instead of simply trying to “sell” a product to a potential client, you can suggest ways that your other products can serve your customer.
Understand your customer’s business and how it relates to your product.
Find places that they could improve by using your product or service.
Be Relevant to the Customer
- Relevance is key in Up-Selling and Cross-Selling.
- Keeping track of your customer and their needs will help to ensure that you are making relevant recommendations that will enhance your relationship.
Take the time to figure out what issues and problems your client might have ahead of time.,
You can figure out solutions on their behalf.
It also makes it an easier sell for you.
Benefits of Up-Sells, Cross-Sells and Down-Sells
Up-Sells, Cross-Sells, and Down-Sells serve to bolster the company’s bottom-line by:
- Increased conversion rate.
- Increased customer retention, loyalty, and overall satisfaction.
The benefit of Up-Selling is evident. You are selling a high-end product instead of a basic version of the product. Your profits will be higher.
You also get profit with Down-Selling. The customer was not interested in your offer and was about to leave. You offered him a lower-priced product, and which he purchased. You get something instead of nothing.
Although the profit is lower, you sold your brand name. If customers are happy, they will become repeat customers.
The profit is in repeat sales.
Up-selling, Down-selling, and Cross-selling can increase your profits, brand recognition, and loyalty.
Application of these Sales Techniques:
- Helps customers gain a deeper awareness of the products and services offered by you.
- Helps to focus on developing and exhibiting empathy for each one of your customers.
- Up-Selling, Cross-Selling, and Down-Selling can positively affect conversion rates.
- Up-Selling and Cross-selling are inherently effective and beneficial to a company as customers who have already made a purchase are more easily sold on other complementary products.
Each of these tactics provides your customer with an overall positive experience:
- Up-Selling provides an opportunity for your customers to see the absolute best of what you have to offer.
- Cross-Selling allows you to show that you’ve put yourself in your customer’s shoes in terms of how they’ll use your product or service.
- Down-Selling shows that you’re interested in meeting their needs and helping them achieve their goals.
Up-Selling, Cross-Selling, and Down-Selling: Basic Tenets
Know your Customers and their Needs.
Your offer should be unique to each individual customer.
Providing a blanket Up-Sell, Cross-Sell, or Down-Sell will make it obvious that you just want to offload the product and make a quick buck, regardless of whether or not your offer actually helps your customer.
To further solidify in your prospects and customers the notion that you truly care about them, You should be prepared to explain exactly how an upgrade or supplemental product (or even a downgrade) will be of value to them.
The products or services you include when Cross-Selling should always complement the customer experience for that specific customer.
Up-Selling and Cross-Selling tactics are only to be used when an individual has already made a purchase or when you’re doubly sure, He will be following through with a purchase in moments.
The product or service you are attempting to cross-sell needs to be relevant to your customer’s individual needs. You must strictly adhere to the 25% Rule.
This “Rule” states that the item you are attempting to add to your customer’s order as a cross-sell should never cost more than 25% of their initial purchase.
Limit your Customers’ Options.
It is important that you do not provide too many choices when it comes to Up-Sells, Down-Sells, and Cross-Sells.
Business always survives and thrives on the generation of revenue year after year.
The ultimate goal is to earn a reasonable Profit.
You just cannot afford to ignore the powerful Sales Strategies and Tactics of
up-selling, down-selling, and cross-selling.
Otherwise, you will sadly miss out on:
– additional revenue and profit
– the opportunities to help your customers achieve their goals.
It is essential to ensure that the customers invariably return to you the next time when they need your services.
There lies a secret to your Business Success!!!
“Here is a simple but powerful rule-always give people more than they expect to get”