Why Upselling and Cross Selling Are Key To Customer Satisfaction
In the movie Glengarry Glen Ross, there’s an iconic scene in which Alec Baldwin, playing the role of lead salesman, tells those under him (edited to remove expletives):
Because only one thing counts in this life: Get them to sign on the line which is dotted. You hear me? A-B-C. A-Always, B-Be, C-Closing. Always be closing. ALWAYS BE CLOSING. A-I-D-A. Attention, Interest, Decision, Action. Attention – Do I have your attention? Interest – Are you interested?…You close or you hit the bricks.
Baldwin plays the classic role of arrogant, rude, cocky salesman who only cares about getting people to sign on the bottom line. He doesn’t care about the customer. He doesn’t care about his reputation. All he cares about is the cold, hard, cash. You close or you hit the bricks!
If you’re in the e-commerce business, it can be easy to take Baldwin’s hardcore, ABC approach. You do everything in your power to get that initial sale. Yes, you care about taking care of your customers, but ultimately you need to make money to keep your business going.
But what if there was a way to combine the two? What if you could simultaneously make more money and take care of your customers? This isn’t some sort of “Made For TV” offer that will expire if you don’t act now. This can be done and is done by the biggest, most successful businesses in the world.
What exactly am I talking about? Upselling and cross-selling.
Both tactics are outstanding ways to increase your bottom line, sell more products, and give your customers exactly what they want.
It’s the ultimate win-win situation.
So let me break down the details of upselling and cross-selling and show you how you can use them to serve your customers.
What’s The Difference Between Upselling and Cross-Selling?
It’s not complicated. Upselling is when you convince a customer to purchase an upgraded or more expensive version of what they’re already purchasing. So, for example, if a customer buys a toothbrush from you, you can upsell them a fancier electronic toothbrush which spins, vibrates, and predicts the stock market. You’re trying to persuade them that they need a better, upgraded toothbrush.
Cross-selling is when you try to sell additional, supplementary products and services based on the initial purchase. When you purchase a mobile phone and they want you to buy a protection plan in case your drop the phone in the toilet, that’s cross selling.
Amazon is all about upselling and cross-selling.
The moment you click on a product, they also show you more expensive versions of the product as well as additional things you might want.
Clearly, this works. Not only do the biggest businesses use upselling and cross-selling, the data suggests it works as well. In the book Marketing Metrics, the authors state, “The probability of selling to a new prospect is 5-20%. The probability of selling to an existing customer is 60-70%.”
In other words, the odds of upselling and cross-selling are much higher than making the initial sale.
Upselling and Cross-Selling Don’t Have To Be Slimy
Some sellers feel that upselling and cross-selling are shady tactics, like something a polyester-clad, loudmouthed used car salesman would use. And they can be that if done improperly. If you are trying to take advantage of your customers by selling them something they have zero use for, it’s a bit slimy. If you’re deceiving customers into thinking they need something that they don’t, that’s also slimy.
But if you use upselling and cross-selling to give customers truly useful upgrades and additional items, that’s helping your customers. You’re trying to give them a better experience.
For example, let’s say you sell mobile phone cases. As an upsell, you could offer them a more protective case, which may be exactly what they want. Or you could offer them a screen protector, which they may have been considering anyway. You’re not taking advantage of them or trying to trick them into a purchase they don’t need.
As Len Markidan of GrooveHQ says:
If you can make your customer feel like an upsell is helping them win, then you’ll both win.
Here’s another example: a few months ago, I checked into a hotel on a weekend trip with my wife. As we were checking in, the clerk offered me an upsell: would I like to add breakfast for two — normally $49 — to my room rate for “just” $29? I accepted without hesitation, and I was happy to do so. At $20 cheaper than the standard rate, I felt like taking the upsell offer was an easy win.
The key here is making your customer feel like they’re also winning in the upsell or the cross-sell. You want them to feel like they are getting something of great value. If you’re not doing this, you probably are doing something slimy and shady.
Simple Ways To Use Upselling and Cross-Selling
Now that your conscience feels at ease with upselling and cross-selling, here are some simple, yet effective ways to implement them in your e-commerce business.
Cut Down On The Options
It can be tempting to think that if you give customers dozens upon dozens of additional options, you’ll increase the amount of sales you make. But that’s not the way it works. I can tell you this both from personal experience and the experts.
I’ve waded through page after page of upsells before I was allowed to finally make my purchase. It’s not fun.
The experts support my feelings. Brenda over at WooCommerce notes:
The truth is that product recommendations’ performance depends on how and when you display them. And not everyone gets this right. Cross-selling and upselling are the bane of many customers just because they’re so often done poorly, with the focus put on the business’s aim of selling extra stuff instead of the customer’s aim of making sure the extra stuff will actually benefit them.
Don’t throw everything at the customers. Only present the most relevant items to them – items that will help them win. Combine your upselling with customer service.
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Use Those Bundles
Bundling items together is a great way to sell more products and meet your customers needs. Going back to the mobile phone example, bundling a case, a screen protector, and a charger allows your customers to get everything they need in one purchase.
And if you offer a slight discount on the bundle, you may be able to increase your overall number of sales.
Give Your Customers What They Want
Keeping track of customers past purchases allows you to customize upsells and cross-sells based on what you know they already like. For example, after I purchase an item on Amazon, they begin recommending similar items every time I log on. I don’t consider this to be an annoyance. Rather, they know what I gravitate toward and then point me to others similar items.
Keep tabs on what your customers purchase and then guide them toward similar items in the future. Or, if a new, related item comes out, alert them to that release. This can increase their satisfaction and your revenue.
Keep The Price Increases Limited
If someone is buying a $40 pair of shoes from you, don’t recommend a $200 pair of calf leather loafers. It smacks of trying to take advantage of your customers. Generally speaking, upsells and cross-sells shouldn’t be more than 25% more expensive than what they’re already purchasing.
If you stick to this range, you’ll stay in the range of what they’re already purchasing. However, if you go outside this, you risk alienating and frustrating your customers. If they wanted to spend a lot of money, they would have made that initial purchase larger.
When They Win, You Win
You don’t have to be Always Be Closing in order to run a profitable business that makes your customers happy. It’s possible to upsell and cross-sell in a way that serves your customers rather than bleeds them dry.
Again, to quote Len Markidan:
Even if we know that upselling can be extremely valuable, many of us, scarred by scammy upsell offers in the past, still don’t feel “right” doing it.
But with the right timing and upselling techniques, those unpleasant upsells are actually very easy to avoid.
It all comes down to when and how you upsell…
Do you feel offended when a McDonald’s employee asks, “Do you want fries with that?” Probably not. If you do it right, your customers won’t be turned off by your upsells and cross-sells.