It is much easier to sell products and/or services to those that are already buying and or have bought from you, rather than trying to get business from new clients. This is where the concepts of up-selling and cross-selling come into play.
Let’s consider the ‘marketing funnel’. Customers/clients come into your business at the top of the funnel and buy a product or service. If they like the product, they’ll probably want to buy more products or maybe start using your services. Therefore, it’s important to have a range of products and services to offer. Make the most of the ‘know, like and trust’ factor of your existing customer base and move customers further down your marketing funnel.
Cross-selling i.e. selling complementary products or services at the time of purchase can produce great results for minimal effort. The same goes for up-selling, when you persuade your customer to buy a larger size of an item.
These methods are definitely the name of the game in retail. One of the measures that all retailers should be calculating is average daily sale, which is total sales for the day divided by the number of sales. Depending on the number of sales you achieve in a day, just a small increase in this dollar amount can reap huge benefits.
For example, let’s assume you increase your average daily sale by $2, averaging 100 transactions per day. That’s an extra $200 per day, $1,400 per week or $72,800 per year for very little effort.
What can you do to increase your sales as a retailer? If we look at the McDonalds example, it’s all about adding complementary goods. So, if you’re running a cafe, you could offer a cake or some fruit toast with each coffee.
What if you’re in fashion? Easy, there are lots of examples of complementary items e.g. socks with shoes, belts with jeans, high heels with a dress, matching jewelry and handbag. The list is endless here. If you set up your sales system to automatically prompt staff about what complementary goods to offer, you’ll be making the most of this opportunity.
Amazon is the king of cross-selling in the online world. Every time you search for a book on their website, they help you out by telling you about other books you may like and what other books people bought along with that book. Of course, these are classic cross-sells, but also very handy information for the consumer. I know that I’ve definitely bought extra books from Amazon or added them to my ‘Books to buy’ list as a result of this technique.
A service-related business with an hourly rate agreement in place can also use these principles. If your services are ongoing, you may want to up-sell your clients to a retainer agreement where they pay a monthly fee for your services. You could also cross-sell by offering educational or training programs to clients who wish to learn more from you, or by broadening your service offering.
Remember that those customers/clients that know, like and trust your products and services are probably waiting for you to bring out the next thing or help them decide their next step. So don’t leave them hanging, talk to them find out what they’re looking for and get to it! And if you provide exactly what they want, the up-sell is that much easier again.
The concepts of up-selling and cross-selling can get quite a bad rap. However, your business profits can be improved substantially if you approach things the right way. You are doing a disservice to your customers by not going to the next step or next level. Ultimately, you are enhancing the customer/client experience, by offering more quality products and services.
So what will you up-sell or cross-sell today?