One of the best ways to boost your margins is to use the momentum of a larger sale to convince a customer to make a smaller, secondary purchase. This strategy, called upselling, can be tricky to implement correctly and effectively, so it pays to remember a few important tips.
Make it relevant
One of the best ways to upsell products is to make sure that the second product is relevant to the first. Entrepreneur and business advisor Neil Patel, writing for Forbes, uses the example of McDonald’s — specifically, the famous phrase, “Do you want fries with that?” Since fries go quite naturally with cheeseburgers, it seems much more natural to suggest that the customer should make their purchase a meal, and it’s a suggestion that the customer is likely to heed without bristling. Another example would be selling a knife sharpener to someone who is purchasing a new set of cutlery.
Limit your suggestions
One tip from Business.com’s Jerry Low is to limit upsell recommendations to avoid overwhelming a customer and potentially losing a sale. Throwing too much at a customer who had planned to purchase one thing may ward them off entirely, and it might mean they won’t come back to your business because they felt too pressured. Instead, stick to a few carefully chosen options for the customer to choose from. GoDaddy, for example, offers a domain privacy program, web hosting and email hosting as upsell options for customers registering a domain name.
If you are in the process of making a sale and closing with a customer, you might see an opportunity for an upsell that you are eager to pounce on. Patel recommends patience in this instance, upsell attempts made before finishing the initial transaction “risky at best.” For many customers, upselling before they have even decided to make a purchase can cause them to walk away from the transaction altogether.
Know thy customer
A well-targeted upsell requires thorough knowledge of the customer. If a customer repeatedly comes into a restaurant for a steak, it might behoove the server to recommend a wine pairing, a new side option or even suggest opting up into a higher-quality grade of meat. By demonstrating that you have familiarity with a customer’s tastes and preferences, they are more likely to trust your judgment in determining what might be best for them.
Even if you are dealing with a new customer, you can take the opportunity to get to know them and learn their preferences. Ask them what they are looking for in a product and aim your subsequent upsells at how an additional good or service will complement their wants or needs. This should also include getting a sense of a customer’s financial limitations: If they make it abundantly clear that they are looking to spend as little as possible, only try to upsell items that are modestly priced and can be tied to their appreciation for value.
Strategic upselling can lead to increased sales and happier customers, provided you approach the process correctly. Make an effort to think about your customers’ perspective and you’ll likely find yourself enjoying better sales and more repeat business.