Cross-selling and upselling represent easy wins for increasing revenue, because existing customers are far more likely to buy than a new prospect. Marketing Metrics puts the odds of making a sale at 60-70% for existing customers and only 5-20% for new prospects.
Yet many salespeople leave this easy money on the table simply for lack of skills and coaching. Help your salespeople maximize the potential of their existing customers by learning how to cross-sell and upsell effectively.
Upselling Vs Cross-Selling: Understand the Difference
First things first: your reps should understand the difference between upselling and cross-selling, and the relative value of each.
Upselling means getting a customer to purchase a more expensive version of something they have either already purchased or have agreed to purchase. Examples include premium memberships, a larger scope of work, or a product made with higher end materials.
Cross-selling means getting a customer to purchase products or services in addition to something they have already purchased or agreed to purchase. Examples include service add-ons and complementary products.
In general, upselling should be the rep’s first go-to when available. It’s easier for customers to see value in a better version of something they already know they want, than in something different. Cross-selling also introduces the risk of diluting the customer’s attention, while upselling does not run that risk.
However, cross-selling is valuable in cases where upselling is not an option, as well as when the additional product or service has a clear and obvious relationship to the original purchase, and provides an obviously related benefit.
For example, if your sales reps are selling dialysis machines, they can introduce cross-selling products such as pumps, tubes, or IV bags. Another example would be to offer execution services to go with strategic consulting.
Tips for Effective Cross-Selling and Upselling
1. Keep It Simple
Offering too many products or services at once can backfire by creating confusion and diluting the customer’s attention. Teach your reps to limit their upselling and cross-selling efforts to only a few items that provide clear benefit to the customer.
As they work with the client and build a long-term relationship, more opportunities to sell additional products or services will naturally arise.
2. Map Complementary Options
Equip your salespeople with effective maps to help them choose what services and products to offer to which customers—at every level of the customer journey. Map complementary options by analyzing the purchase history of your current clients and categorizing by customer segment and products or services purchased.
In addition, your sales reps, account managers, and customer service reps should all be familiar with your offering or product catalogue.
3. Plan the Timing
Upselling and cross-selling often takes place at the end of the sales cycle, when buyers have already committed to the purchase. This can be effective, but in complex sales it’s often better to integrate the upselling and cross-selling process into the entire customer experience.
At The Brooks Group, we encourage our clients to lay the path to sustained high sales performance by using the MISE approach. This strategy helps us partner with our clients to see where they are today, and create a plan to get them to where they need to be.
4. Ask Probing Questions
Effective upselling and cross-selling starts with truly understanding the customer’s needs. Teach your reps to ask probing questions throughout the sales process, to identify the right products and services for them, as well as the right upselling and cross-selling opportunities.
The goal is to establish a long-term relationship and build strong customer loyalty.
5. Demonstrate Value
Show your reps how to effectively use testimonials, case studies, and ROI calculations to demonstrate the value of additional purchases.
They should also build value by taking a consultative sales approach. When your reps inform clients about a product they need, but didn’t yet know about, they become more than “just” a salesperson. They aid in the discovery process for new solutions that can make their clients’ lives easier.
6. Offer Loyalty Perks
Create structured opportunities for customers to earn perks based on their buying patterns. Customers who buy more should get rewarded with more (if that makes sense for your sales model).
Teach your reps about loyalty offerings so they can use them effectively in their upselling and cross-selling efforts.
Often, the best cross-selling and upselling opportunities arise after the customer has already made and enjoyed a purchase. Train your reps to make it part of their routine to follow up with existing customers to ensure they’re happy and to suggest appropriate upsells and cross-sells.
This can be done through follow-up emails, phone calls, or personal visits.
When Not to Cross-Sell or Upsell
Not all customers should be offered additional buying opportunities. Teach your salespeople to discern when a customer is likely to be unprofitable, and to avoid providing them with opportunities to be even more unprofitable.
Examples of unprofitable customers include those who overuse your customer service department, who initiate excessive returns, or who consistently demand attention that is above scope for their service level.
Cross-selling and upselling are vitally important for your team to increase revenue in the most efficient way possible. These techniques, along with other account management strategies help strengthen client relationships, uncover revenue opportunities, shorten sales cycles, and drive sales for your organization.
The Strategic Account Management training program will help your salespeople master the art of organizing, managing, and growing their most profitable business accounts.
Learn more about the program in the video below.
Request more information on the Strategic Account Management program here.
Published on September 21, 2018