Why Is Upselling Important? What You Need to Know

Many businesses spend a lot of time, effort, and hard-earned money reeling in new customers. But the total cost of acquiring a new customer can be five times more than retaining an existing one.

With this in mind, it’s generally easier to increase your revenue by focusing on customers you already have. Upselling is one method of accomplishing this.

But what is it, and why is upselling important in sales?

What Is Upselling?

Upselling is a sales method in which you persuade a customer to buy a better and more expensive alternative to the product or service you’re initially offering to them. For instance, an airline can offer to upgrade a passenger’s coach seat to business or first class. Another example would be a free software supplier that offers a premium version of their product with more capabilities.

What Is the Bottom Line Goal of Upselling?

Simply put, the end goal of upselling is to boost your sales. But instead of just selling one product or service, you’re also showing customers that they have other options that can meet their wants and needs much more effectively than if they stuck with their initial purchase.

Why Is Upselling Important?

Giving customers more desirable alternatives improves their experience with your products and services. Because they’re more satisfied with how much the product has helped them, they’re willing to put more trust in you. As a result, it becomes easier to cultivate your relationship with them and make even more attractive offers.

You’d then have customers who are more loyal and thus more likely to make repeat purchases with your business.

How Do Customers Benefit from Upselling?

Even though the customer will spend more money, they’d ideally get more value from the improved product or service you’re offering. Again, let’s use the upselling airline as an example. Although a business or first-class ticket would cost significantly more, the passenger would have a much more comfortable flight than if they went with their coach seating.

Your customer also wouldn’t have to take risks and look for options with another brand if they know that you already offer those alternatives.

What Is the Difference between Upselling and Suggestive Selling?

In upselling, you’re selling the customer a newer or better version of the product they want to buy or have already bought. On the other hand, suggestive selling is when you’re persuading the customer to buy an add-on related to what they’re purchasing.

Let’s say that a customer bought a mobile phone from your business. Upselling would be to offer them a newer model, while suggestive selling would be to offer data plans, headsets, power banks, and so forth.

What Is the Importance of Upselling and Suggestive Selling?

Both upselling and suggestive selling have their benefits. However, upselling is typically more suitable if you want to enhance an existing customer’s experience with your brand by offering a new and improved product. Though it can also be used with current customers, suggestive selling can be more effective with new customers—you can recommend the add-ons to improve their first-time experience with the product they want.

What Are Upselling Techniques That You Can Implement for Your Business?

Here are several tips and tricks when upselling your products and services:

• Check on Your Customers First: Asking the customer about their initial experience determines whether you can pitch the upsell or not. If they’re already happy with the first product, they might be willing to pay for something pricier.
• Understand What They Want: Instead of overwhelming them with several options, find out exactly what the customer still needs so you can narrow down their choices and make it easier for them to decide.
• Provide Comparisons: Side-by-side comparisons of the initial and premium products help customers clearly understand the latter’s value.
• Offer Discounts and Perks: Even if your upgrade’s benefits are appealing, customers can still turn away at the price. Benefits like one-time discounts, extended warranties, and free shipping can make your pitch more attractive.
• Don’t Be Too Aggressive: At the end of the day, it’s still up to the customer to buy the upgrade or not. Avoid pushing the offer too much if they decline. This helps keep your good relationship even if you don’t make a sale at the moment.

When Should You Upsell?

While it’s important to know why upselling is important, you’ll also need to know when it’s the right time to upsell your customer.

In general, it would be a good idea to upsell if the customer has made it clear that they’re satisfied with the original product. They would likely be more amenable to buying an improved version of it.

Meanwhile, upselling is best avoided when a customer just wants to have a problem fixed. Pushing the upsell might irritate them further. In this case, just focus on solving their issue and retaining the relationship.

Get a Call Center That Knows How to Upsell

Is upselling a skill worth learning? Yes, it can certainly help you retain your customer base and ensure more sales. That’s why ROI Solutions trains call center teams to know how and when to offer upsells to your customers.

If you have any products or services that you want to upsell, you’re always welcome to discuss them with us.