Upselling

Upselling is a sales technique aiming to convince the customer to purchase additional directly related items or features resulting in raising the cost of sold products or services and increasing the profit margin for the sales person.

In practice, this technique can be implemented in a manner of enlightening the customers of additional features or products that will help improve the customer experience; or might be used as a trick to convince the customer to buy additional goods or features they don’t need just to increase the profit of the sale, therefore ethics have a role to play here.

Upselling examples

Upselling can be conducted in multiple fields, such as:

• A web hosting service prompts customers to upgrade their plans as part of their annual renewal process.
• A restaurant suggests adding extra toppings to dishes for extra cost
• A free mobile app that offers a paid version to remove its in-app ads.

Upselling vs. Cross-selling vs. Down-selling

Upselling can often be done in environments where other offering techniques are used either separately or together. Most common types include Cross-selling and Down-selling.
 
Take a fast-food restaurant for example that utilizes the three sales' techniques altogether.

• Upselling: Offering a bigger bag of fries instead of the normal, cheaper one.
• Cross-selling: offering a fast food meal containing a burger, fries and soda as one package.
• Down-selling: offering a cheaper smaller size drink than the large one.

Although some of these techniques seem an opposite of others, utilizing them correctly can actually help the business grow and gain more customer loyalty and trust. Learn more about Upselling, Cross-selling, and Down-selling via these links to get a better picture on what each of these mean, and how to apply them in practice.

Steps to include upselling in your offerings:

When done correctly, upselling can be a great booster for revenue generated from business transactions. Here are essential steps to take in order to smoothly utilize the power of upselling:

1. Understanding the customer

   Understanding the customers of the business is essential in order to correctly address their needs once and again, leading to trust and loyalty. This means not only addressing the problem or pain faced by the customer, but also collecting feedback from customers on the products and services you offer in order to understand gaps in the value proposition and fix them.

2. Building customer loyalty

   As mentioned above, upselling can be misused easily, and therefore customers view sellers trying to upsell their products and services as shady and manipulative. It is thus essential to ease this fear and raise customer trust, and make then feel that the upsell is for their own benefit, not the seller's.
    
   Raising customer loyalty and trust is no easy feat. Big brands can utilize loyalty for their brand recognition and reach, but the story is completely different for startups and small businesses. Here, loyalty requires time, energy, and repetitive purchases for a standard customer to start trusting a business or startup. A good practice to help raise loyalty is keeping things personal and direct with customers: It is much better to have 100 loyal customers than 1,000 one-off customers.

3. Keeping customer priorities first

   Once you build trust and locality, you should keep and grow it. This is done by understanding what the customer wants exactly, and finding ways to keep their priority needs as priority business goals. This way, the customer can feel at ease and that your business is keeping their interest and well-being as a priority.

4. Getting it right

   Even after doing all of the above points, understanding what works for upselling from what doesn't is essential. Not all products make sense in an upselling mechanism. Wisely choose what you are upselling for in order to keep that loyalty and trust high.
    
   Another point here is the price. A good rule of thumb for upselling is to have the total price not exceed more than 25%. This way, the customer can feel they are getting more value for the money.