BUSINESS LINK ANSWERS YOUR QUESTIONS
Up-sell and cross-sell your way to more profit.
Supersize me!
Up-selling and cross-selling are aimed at selling more to each customer. Some examples:
Upgrading: a customer asks for product y, but rather than simply take the order and complete the transaction the sales person questions the customer on her needs and purpose for the product. Product x costs more but has more features and will meet her needs more effectively, the sales person persuades the customer there is greater benefit in model x and completes a higher-value sale.
Accessorising: not only upgrade the customer to product x but sell the cleaning kit and a service contract. Accessorise products so customers can see how well they work together, on the displays, in the catalogue on the website and during the sale itself.
Bundling: you have products that make sense when bought together, so make it worthwhile for customers to buy multiple items.
Up-selling and cross-selling are sometimes interchangeable terms, but here I am less concerned with text book definitions and more concerned with the principle of selling more to each customer.
Show me the benefit!
Even in a slowdown, customers can be convinced to buy more if it makes sense i.e. to their benefit. But you need to actively SELL; no more passively accepting customer requests and orders:
- A major customer delays a large payment or completely defaults resulting in a fatal bad debt;
- Explain the benefits of taking a more expensive route;
- Study your products, list the benefits;
- have a strategy for selling;
- Talk to your customers and listen for opportunities to sell more;
- Remember the benefits and help customers to reap them, but don't be pushy.
Give me an incentive!
Customers may be persuaded about the benefits but not see a good reason to purchase, so give them an incentive. For instance, try making the bundle slightly cheaper than the separate parts. Straight markdown isn't the only incentive, try two-for-one; buy a get b for half price etc. But incentives should be high value to the customer and low cost to you. So do your sums to ensure there is enough margin for it to be mutually worthwhile.
What to do next:
- Study your popular products and decide how you might up-sell or cross-sell each and why, then define the benefits to the customer.
- For every product item think of adding at least two accessories or add-ons that can be purchased at the same time and why.
- Think of at least 10 product or service bundles and price them to profit you and the customer.
- Adopt active selling; establish full needs listen and watch carefully for opportunities to up-sell and or cross-sell.
- The same principles apply to service businesses so work on your sales strategy.
- Ensure your ecommerce website is laid out to allow cross-selling and up-selling so that customers are encouraged to upgrade and or buy more from you at each transaction. So speak to your web-site developer.
We spend a lot of time chasing new customers and forget the potential for existing and willing customers to spend more. So aim to sell more to each customer, however small the amount - it all counts
We can provide you with free, impartial, skilled advice, just call us on 0845 607 6117, visit our website www.businesslink.gov.uk/east, or call me direct.
That's all for this month.
Peter Mulhall
Business Adviser
tel: 07717 290309
p.mulhall@businesslinkeast.org.uk
Business Link - the place to go for business support
Online: www.businesslink.gov.uk/east
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