Upselling and Cross-selling

Move Inventory and Raise Cash

By Ben Gran

One of the best ways for small businesses to boost cash flow is to increase sales. Even if the economy is experiencing a downturn or customers are slow to pay their bills, boosting sales is often more within your control than many other tactics to improve your cash flow. Two classic techniques for increasing sales are upselling, which means selling more to the same customers, or cross-selling, which is finding new ways to sell different products or services to the same customers. This can be a great way to boost your sales without acquiring additional customers.

The benefits to upselling and cross-selling are practically endless, especially for a small business. You can move excess inventory, expand profit margins, and promote your other products and services by bundling them with more popular items. But you also need to do this intelligently—without creating a more complicated transaction and without making the customer feel pressured or alienated.

Here are a few key insights for how to create an effective upselling and cross-selling program for your business:

What Is Upselling?

Upselling is the act of suggesting additional products or services to your customers after they've already committed to making a purchase. The classic example is ordering a hamburger at a restaurant, and then being asked if you'd like fries with that. In that selling environment, the customer has already committed to making a small purchase, and the salesperson simply encourages them to enjoy an enhanced experience by adding to their total.

Upselling can also involve selling higher-value services, products or additional items. If a customer agrees to buy a lower-cost package of goods on your website, consider enabling your site to offer modest discounts for additional purchases. Another example of upselling is offering upgrades, such as hotel and airline reservation sites that encourage you to buy a seat with more legroom, or book a hotel room with nicer amenities for an additional charge. In a professional services sales environment, upselling can be as simple as trying to expand the scope of work on a consulting project or offering additional ideas for work once an initial project is complete.

Upselling is a way to enhance the customer relationship by offering additional ideas or higher-value add-ons that might benefit the customer. Ultimately, the goal of upselling is to increase the total size of the sale and offer the customer the benefit of trading up.

What Is Cross-Selling?

Cross-selling is a related concept, but instead of a higher-value add-on to an existing purchase, cross-selling involves selling unrelated items that are still relevant to the customer's needs. One example of cross-selling is offering relevant products the way ecommerce sites often do, under a heading of “You might also be interested in…" or “Frequently bought together with..." or "Others have also purchased these items."

Cross-selling is a great way to add to your customer experience by showing them other ideas for items that can complement their existing purchase, like accessories to video game consoles or a desktop computer. Ideally, customers will appreciate cross-selling because it helps them remember which items to buy now, so they won't have to purchase them later.

Pitfalls of Upselling and Cross-Selling

The challenge of upselling and cross-selling is that it needs to be natural and comfortable for your customers. Don't be too pushy. You don't want your customers to think that you're just trying to extract every last dollar from them. It's a fine line; you want to try to maximize each sales opportunity and sell as much as you can, but if you push too hard or sound too aggressive, your customer may feel pressured and end the transaction altogether.

Upselling and cross-selling are both classic strategies to boost your sales. But it's important to keep in mind that the best sales strategy is to keep customers happy and keep them coming back for a long-term sales relationship. The upselling or cross-selling conversation should be focused on asking questions about how to best help the customer, how to meet the customer's unstated needs, and how to create a longer-term customer relationship that goes beyond a single transaction.

About This Author

Benjamin Gran

Benjamin Gran is a full-time freelance writer specializing in blog articles, white papers, technical writing, speech writing and other business writing.


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