If you’re not upselling to your customers, you should be. We’re going to answer five questions about upselling so you can be more successful in your business.
What is upselling? Upselling is when you offer a little bit better product for a little bit larger price tag. For example, if someone is going to buy a camera that costs $300, you offer them a camera with a few extra features for $350. This is upselling because you earn a little more money, and they get a product that is a step above what they were going to buy.
Sometimes, people see this behavior as tricking the customer into paying for something they don’t want. However, it’s actually not. Most customers make a purchase because they have a problem. Maybe the problem is they don’t have anything for taking pictures. They want to fix that problem. They see a camera that looks nice and consider buying it. All of a sudden, here is another camera option (either presented by a store employee or on their webpage). This camera provides so many more options. You should really buy it! The customer feels as though their needs will be met so much more if they buy the more expensive camera. They willingly pay the higher price and walk away happy that their problem is now solved in the best way possible.
How many options should you offer for upselling? Let’s talk about selection. The more the merrier, right? Let’s take a look at this study in a California gourmet market. A group of research assistants set up a jam-selling booth. At times, they would offer 24 jam choices and at other times, they would offer 6 jam choices. Each customer who approached them tried an average of two jams and received a $1 off coupon. What is the difference in their purchases? Sixty percent of customers were drawn to the larger jam booth, while 40 percent visited the small jam booth. It seems as though more choices are better, right? Wait! We’re still not done. How many made a purchase? From the forty percent who visited the small booth, thirty percent bought some jam. Of the sixty percent who visited the large booth, only three percent actually became paying customers.
Summary: Too many choices can overwhelm your customers. Limit the options to three to five good options, and you will be more likely to make a sale.
How do default choices play into the customer’s decisions? As suggested in tip number two of online upselling, add-on features can be a good way to upsell to customers. If the customer must take action, like unchecking a box in order to not buy the extra item, they are not likely to do anything. In the same way, if they must check the box in order to buy the extra item, they are also not likely to do anything. People, as a whole, leave the default option alone and do not take action. In this way, you can upsell, because they will not contradict the action you have already taken to check the box.
How can a dummy choice help you? The Economist ran an ad a while back with a ‘dummy choice’ to see what people’s reaction would be. You could receive web-only reading for $59, print only reading for $125, or print and web reading for $125. Obviously, the middle choice is not a good deal. No one selected this option. However, 84% selected the last and most expensive choice. A while later, the same ad was run, but the dummy choice was taken out. Now, your options were web-only for $59 or print and web for $125. This time, only 32% selected the print and web option, while 68% chose the web-only selection. Why? In the first ad, the customers selected the most expensive option, because they felt like they were getting a better deal. However, with the dummy choice taken out, fewer customers chose that option.
What does this mean for you? Offer a dummy option. Offer a product with no add-ons at the same or very close price as a product with a few add-ons. The customer will see the product with the add-ons as a much better choice and opt to purchase that, even though they may not have been thinking of adding on beforehand.
How can you upsell successfully? Here are some tips to help you upsell successfully online and in a store.
- Promote the most popular products or products that have many positive reviews.
- Add on features, such as insurance for the product. They need to deselect it if they do not wish to purchase the insurance with the product.
- Only suggest items that are up to 25% more pricy. If someone is planning on making a $50 purchase, they probably won’t go for a $200 upsell. However, someone planning on a $500 purchase could be taken to $600.
- Show testimonials with the suggested upsells.
- Have a conversation with the customer. When they talk to you, they feel like you care about them. When you make a suggestion, they feel like it is because you really want to meet their needs. Additionally, you will also be able to gauge more accurately as to what their needs are.
- Walk customers to the check-out counter. Perhaps you have been helping a woman select clothes. Walk her through the shoe department to get to the counter. She might be interested in making a purchase.
- Remain friendly throughout the interaction. Don’t become tired or ready for them to leave. If you are personable, they will listen and enjoy talking with you. If you are not, they may leave the store with a bad impression.
Take these actions, and you will be on your way to upselling more successfully!