Upselling–getting customers to buy more than they originally intended to–can substantially increase your profit margin. It’s much easier to encourage existing customers to increase the size of their orders than it is to land new buyers.
I saw a great demonstration of upselling in Texas one hot and humid day earlier this year. While my usual morning fare consists of coffee light, I decided I needed an ice-cold soda as I was moving through the Dallas—Fort Worth airport. Fortunately, I stumbled on the Taco Bell Express near gate C-17.
As I approached the counter, the four employees were laughing and smiling, enjoying the day. “Hey,” I said, smiling too, “You can’t have so much fun here.”
“Just having a little fun,” one of the servers said. “What can we get for you?”
“Large cola, ice cold, please.”
“Okay, but that’s not enough to get you revved up for your meeting,” she said. “You’ll need some energy, and our food is excellent.” Then she smiled again and looked me straight in the eye.
“What do you recommend?” I asked.
“Without a doubt, you’ll need the Number One Special. You’ll get one Grande Soft Taco and one Beef Burrito Especial. You’ll love the chicken and the beef. You get reduced fat and protein too.”
That smooth upsell raised my check from $2.29 to $6.79.
You see other examples of upselling when:
- You visit the supermarket and encounter lots of overpriced stuff as you move through the checkout line
- You get cards from magazines and newsletters inviting you to subscribe for an additional year or two
- The salesperson at your favorite clothing store says, “Would you like a pair of socks to go with your new slacks?”
- The waiter at a restaurant asks, “How about one of our delicious desserts with your coffee?”
- You make an online purchase, and just before you check out a pop-up appears that invites you to buy related products or services, often at a discount
That’s upselling in action. You already decided to make the purchase; now the vendor is working to get you to spend more money.
How Upselling Boosts Your Profits
Remember: Once a customer places an order, you have to process the order, generate the invoice, and pack and ship the product. The point is, you have to do this work regardless of the order’s size. That’s why upselling is a key to your profitability. Most of your processing costs are fixed (rent, direct labor, electricity, packaging, etc.), so when you upsell and add additional items to the order at a profit, you can improve your bottom line exponentially–maybe double, triple, or more.
How to Generate Upselling Ideas
Mine your business to discover upselling ideas and strategies. Here are some questions to help you get started:
- What do your major customers buy?
- Why do they buy from you?
- What problem(s) do they want to solve?
- What other products and services could you offer that would complement the products they already want?
- What other products or services do you already offer that you could suggest they buy? How about a special offer for customers who buy directly from you–maybe another title at half-price or 40 percent off? Maybe your overstock (overruns) at cost plus 10 or 20 percent?
- What products and services from other vendors could you add to your product line to increase order size?
- Can you sell an ongoing add-on or service that complements an initial order and builds customer relationships by keeping a dialogue going?
With upselling–especially upselling by energetic, enthusiastic and super-pleasant employees who make the shopping experience enjoyable–the customer gets a great value and you put more money in your pocket. Win-win.
Copyright © 2004 Eric Gelb
Eric Gelb, MBA, CPA, is a copywriter and editor of the Publishing Gold E-zine. Contact information: 516/374-1387; www.PublishingGold.com.