Inexperienced vendors view upselling as a dirty concept. Many think it’s a cheap, sleazy tactic that only exists to get more sales.
To be fair, that can be the case. There are hordes of deviously sleazy salesman who are quite talented at sinking their hands into their customers’ pockets, while offering no value in return.
Luckily, that is not always the case.
Upselling can leave a bad taste in a customer’s mouth when it’s done inappropriately. However, there is absolutely nothing inherently bad with upselling. In fact, it can actually increase a customer’s satisfaction when it’s done the right way.
What’s an Upsell?
An upsell is a sale of a more expensive and advanced alternative to what the customer is already considering. You are, in essence, recommending that the customer spend more money than he probably originally intended to spend. For example, a customer is getting ready to buy a computer, and you show him a more powerful, and more expensive, computer. If he chooses the more expensive option, then that’s a successful upsell.
An alternative to upselling is cross-selling. When you cross-sell, you recommend to the customer another product that complements their existing purchase. For example, you sold a customer a computer, and you offer a computer desk. If the customer buys that desk, then that’s a successful cross-sell.
Why You Should Seriously Consider Using the Upsell
The upsell adds value for the customer. If you can clearly demonstrate to the customer that the upsell is more valuable and is the superior product, then it’s in the best interests of the customer to make that purchase.
If you can demonstrate that the increase in price for the alternative product is worth it because of the value that customer will get, then it’s in the best interests of the customer to make that purchase, even though there’s a price increase.
With upsells, you demonstrate that it’s a win for the customer by the way that you frame it. A successful upsell will usually feel like a bargain to the customer. Here’s an example:
A customer is on your site and is considering a computer. On the sidebar of the product page, he sees a more expensive computer, but it has more features. It has a faster processor, more memory, better hardware etc. Usually a computer of that caliber will be $250-$300 more than the one that he is considering, but on your site, it’s only $120 more. In that customer’s mind, that is a tremendous bargain, and if he has an extra $120 to spare, he will strongly begin to consider the more expensive computer. You are giving the customer the option to really upgrade his purchase while saving money. And, as long as you have good margins on that upsell, you’ll benefit from it, too.
That’s one example of an upsell. Let’s say that the customer buys the less expensive computer, and after his purchase, you offer an extended warranty for an extra fee. That’s another example of an upsell; in this case, the customer already bought a product, and the upsell is a very valuable addition to that purchase.
When done right, upselling has a few benefits:
- It increases customer satisfaction. If you can make it crystal clear that the customer is receiving more value from the upsell, then the customer will be appreciative.
- It increases the average order value. Simply put, an upsell with good margins = more revenue for the business.
- Upselling is easier than selling to new customers. When someone is already seriously considering a purchase, or has already made a purchase, then offering the upsell is very easy. At the point where an upsell is offered, trust has already been established. A lack of trust is a barrier to a sale. With an upsell, that barrier has already been shattered.
Upselling is not a dirty tactic. It’s totally ethical when done right, and many customers will appreciate it. As long as you can offer more value to the customer, your upsells should be successful.
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