Upselling is a great way to boost your profit margins in a cost-effective way. Businesses looking to raise their sales numbers have two options, attract new customers or sell more to the ones you already have. New customers can be expensive to attract — coupons and other advertising costs eat into the profits generated by those customers. An alternative to shelling out some big bucks is to upsell the customers who already patronize your business.
There are two ways to upsell your customers: steer them towards more expensive products or sell more items. This doesn’t mean pressuring customers to buy things they don’t need — upselling is about providing better solutions. However, upselling won’t be successful if it isn’t done right. Does your staff know how to upsell effectively? Here are five indicators to watch out for:
1. Let’s get personal.
Is your staff engaging customers when they enter the store? People love to chat about themselves and their needs, so watch your employees to make sure they are listening to shoppers and not interrupting or walking away too soon. Understanding a customer’s problem can provide clues so you know how to upsell a solution. Employees who listen carefully and understand the issue will gain a shopper’s trust and are more likely to close the sale.
2. Irrelevant suggestions won’t resonate.
Don’t try to upsell items or services that aren’t relevant to the customer’s needs or their intended purchase. It is one thing to want to make a sale, but it’s another to be overeager and show customers items that don’t fit their needs. This just frustrates shoppers and wastes their time, and they may leave the store empty-handed. Instead, suggest products that pair with the items or services the customer is looking for.
3. Make bundled recommendations.
The biggest part of how to upsell is making it logical for people to spend more money. Monitor employees to make sure they are offering recommendations that make sense based on the customer’s intended purchase. Offer a bundle of related items for a discount — for example, purchase a pair of pants and get a belt for 50% off. Make sure sales associates are suggesting bundled purchases while they’re still on the sales floor instead of piling on suggestions at the check-out where they’re more likely to be rejected.
4. Understand perceived value.
Once people sense you’re trying to upsell them, they’re going to proceed with caution. It’s important to help customers see the value of additional items or a larger purchase. Make sure your staff is trained to justify the cost. If a shopper is purchasing items for a day at the beach with her children, suggesting sunscreen that doesn’t irritate little eyes may resonate. Or if a shopper is purchasing paint for a home remodeling project, paint tray liners or drop cloth can be a welcome reminder to make cleanup easier at the end of the day. If an item clearly has value, it will be an easy upsell.
5. Don’t be too pushy.
One of the most common mistakes when learning how to upsell is being too pushy. If your employees are making customers uncomfortable by being too aggressive, tell them to back off a little. Don’t make shoppers feel guilty about not purchasing additional or more expensive items. If they turn you down, don’t bring it up again.
Teaching your staff how to upsell correctly can be a challenge, but the payoff is worth it. Customers will appreciate a higher level of service and be more likely to purchase additional items after a conversation about their needs. When upselling is done well, everyone wins — your customers feel they are getting more bang for their buck and the store has a higher profit margin.