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 team of sales 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. The end goal of being to take a sale that is already on the table and present a higher-priced alternative that can lead to a larger sale for the sales representative. Ultimately, upselling leads to a customer spending more with a company in exchange for a higher-quality product or service than what was initially on the table.
Cross-selling, on the other hand, 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. Essentially, cross-selling leads to a customer spending more with a company in exchange for additional goods or services than they had initially planned on purchasing.
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.
That being said, 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 a clear and 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. In this instance, customers are likely to purchase the pumps, tubes, and IV bags because they will be used in conjunction with the product they’re already purchasing: the dialysis machine.
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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 during the sales pitch. Teach your sales reps to limit their upselling and cross-selling efforts to only a few items that provide a clear benefit to the customer. Unrelated products brought up during a sales pitch can immediately affect the experience of a customer and make them feel more like a sale than a customer. In these instances, customers can become closed off to the sales rep, solely to avoid the feeling of being sold to.
As sales representatives work with the client and build a long-term relationship, more opportunities to sell additional products or services will naturally arise based on any additional needs of the customer.
2. Map Complementary Options
Equip your salespeople with effective maps to help them choose which 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.
Creating a map of product and service options for sales representatives to utilize as they speak with a customer can make it significantly easier for them to determine whether an upsell, or a cross-sell is going to be a better fit for the customer. In having a clear map to follow, sales representatives are better equipped to focus on customer satisfaction while still working towards a larger sale.
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 of Upselling or Cross-Selling Efforts
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.
This approach can also be used in both upselling and cross-selling. With an upsell, a customer starts with any given product or service. By recognizing where they need to be, a sales representative can present the proper upsell at the right time.
On the flip side, a sales representative speaking with a customer who is committing to a product or service may find that said customer would also benefit from an additional product or service. Now, this secondary product or service may enhance or improve the primary product or service the customer had initially committed to. This cross-selling strategy is yet another way to work towards customer satisfaction while also getting an additional purchase from a customer.
4. Ask Probing Questions
Effective upselling and cross-selling starts with truly understanding the customer’s needs. Teach the representatives on your sales team to ask probing questions throughout the sales process. In doing so, they will be able to better identify the right products and services for the customer, 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. By asking probing questions throughout the sales process, sales representatives are able to build strong customer relationships, which can result in providing more value for the customer in the long run. With a thorough understanding of a customer’s needs, it becomes significantly easier to provide genuine value while also providing personalized cross-selling efforts.
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.
By having access to ROI calculators, testimonials, and the like, sales reps can build a strong case that presents genuine value for a customer. With a compelling presentation that incorporates data, it becomes significantly easier for sales reps to encourage shoppers to invest in products that they can confidently say will benefit them.
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. When a business chooses to reward customers with loyalty perks or complementary product offerings, customers are more likely to buy into an upsell pitch. This approach can help remind customers of the value of the product or service, while also providing sales reps with an upselling technique that requires minimal effort and can still increase sales.
7. Follow-Up
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. If there is a fee gift or complementary product that you’re able to offer, doing so when following up is a sales strategy that can help with customer loyalty and the overall perception of value from a brand.
Taking this approach can greatly increase customer satisfaction and the likelihood that a customer would be open to an upsell or cross-selling pitch down the road.
If your company does not offer complementary products or services, a follow-up call can be a great time to present any additional upgrades or products that would provide value to the client. With proper planning and consideration of the customer, a follow-up call can be the perfect time to incorporate an upsell or cross-selling technique.
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.
Conclusion
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.
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The Strategic Account Management training program will help your salespeople master the art of organizing, managing, and growing their most profitable business accounts.
