There are multiple reasons to upsell, beginning with your competitors, who may contrast their upgrades with your standard service. Upselling gets you feedback, which helps you understand your customers. Finally, it’s a chance to plant a seed, because not all customers buy on impulse.
The following 5 methods of upselling have been shown to improve closing ratios:
1. Get to the point:
Actively listen to your customer to identify their needs and motivations, and address those key points right away. Tailor your presentation to your customer’s priorities by building your presentation around the things that matter most to your customer, and frequently ask if you’re addressing their concerns.
2. Take it from the top:
If you have tiered offerings, showing your premium model first can be a sign of respect for the customer and opportunity to present your best-in-class offering ahead of all others. This gives price sensitive customers the opportunity to remove options and bargain hunters a basis to negotiate. You’ll also be at your best when you begin your sales presentation from the top of your line.
3. Try the freemium model:
Allowing customers to use a base service as a starting point is an effective way to introduce products and services while setting the stage for committed relationships. Many software-as-a-service companies offer freemium models to give users a path forward to becoming paid subscribers, as their usage requirements grow. These companies recognize they won’t convert all customers, but most have found the ROI from paid subscribers outweighs the costs of providing free services.
4. Leverage your supply chain:
Vendors frequently promote ancillary products and services that fit your business model and could potentially become a brand extension. In addition to refreshing your inventory, these extras can become popular with your customers and keep them coming back to see what else is new.
5. Upsell at closing:
Upselling goes hand in hand with closing; both are repeatable, natural elements of the selling process. There are many opportunities to mention available options throughout the closing process, as you help your customer navigate a digital form or paper application. This is an opportune time to mention extended warranties, premium support levels, and various subscription services designed to enhance your product or service. Mentioning these upgrades in a low-key, respectful way will make your customer feel appreciated and pampered.
Don’t be afraid to upsell your customers. Prospective customers deserve to see all the options. Regular customers deserve to hear about all the add-ons. Even if they don’t immediately buy, they’ll appreciate the update.
A perfect example of upselling is the new iPhone X; Apple currently offers a 64gb model for $999.99 and a 250gb model for $1,149.99. If you factor the cost per GB, consumers are paying more for the 64gb model creating a perfect upsell to have them upgrade to the 256gb.
$999.99 64gb Cost Per GB $15.62
$1149.99 256gb Cost Per GB $4.49
This upsell strategy exist in every industry such as shavers, food products, and even McDonalds. The next time you order your coffee frappuccino from Starbucks notice the prices structure. Mini is $2.95, Tall $3.25, Grande $3.95 and Venti $4.45.
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