How to effectively drive up-selling and cross-selling?
9 minutes read
Cross-selling and upselling represent easy wins for increasing your sales revenue. Because existing customers are far more likely to buy than any new prospect.
Yet many sales leaders leave this easy money on the table due to,
- Lack of awareness
- Lack of a good sales strategy for upskilling and cross-skilling
- Lack of skills and coaching that are required for sales reps to excel in upselling and cross-selling
In this blog, we are going to explore all about upselling and cross-selling
- The definitions of up-selling and cross-selling
- When to use which one of these two?
- How can the sales leaders strategize upselling and cross-selling?
- How can the sales reps successfully drive upselling and cross-selling?
What is upselling?
Upselling means getting a customer to purchase a more expensive version of something they have either already purchased or have agreed to purchase. Examples include premium memberships, a larger scope of work, or a product made with higher-end materials.
What is Cross-selling?
Cross-selling means getting a customer to purchase products or services in addition to something they have already purchased or agreed to purchase. Like, service add-ons and complementary products.
- A scanner can be cross-sold along with a printer
- Or a conditioner can be cross-sold along with a shampoo
Upselling vs Cross-selling: When to use which one?
Both upselling and cross-selling involve selling products or services in addition to what the customer had already purchased or intended to purchase. In both these types of selling, remaining ethical and solving problems for the customer is the top priority.
However, it is advised that the sales reps consider upselling as their first go-to when available. Because it’s easier for customers to see value in a better version of something they already know they want, than in something different. In certain scenarios cross-selling might also pose the risk of diluting the customer’s attention, while upselling does not run that risk.
However, cross-selling is valuable in cases where upselling is not an option, as well as when the additional product or service has a clear and obvious relationship to the original purchase and provides an obviously related benefit.
For example, if your sales reps are selling dialysis machines, they can introduce cross-selling products such as pumps, tubes, or IV bags.
How can you strategize up-selling or cross-selling?
1. Start with your goals
Start by understanding your sales goals. Analyze your past sales performance data and figure out
- Which product line needs a boost in its sales?
- How many units of various products do you need to sell in order to meet the sales targets?
- What are your sales revenue goals for a quarter or year?
Once you figure this out, you can then design a sales strategy that aligned with your ultimate business goals. This helps your sales managers and their teams to see the bigger picture of upselling and cross-selling. As a result of this, they will be more invested in upselling and cross-selling and try to do it actively.
2. Determine which products can be used for upselling and cross-selling
The aim of the upselling and cross-selling strategy should not be to bombard the customers with a number of product suggestions. Because, after all, they’ve already made a purchase or considered making a purchase from your company.
So your aim should be to offer products that make sense or add value to your customers’ initial product choice. And for this, you need to first determine what all products go well together for upselling or cross-selling. Take a look at your products catalog and map out the products which,
- Can be sold together
- Or can be sold as an upgrade
Create a separate catalog that clearly mentions various products and the related products which can be upsold or cross-sold with them. This catalog comes in handy for the sales reps while doing upselling or cross-selling.
3. Create a targeted list of buyers
The next step is to understand who is your target audience for upselling and cross-selling. Up-selling and cross-selling cannot be applied for all your customers as some may be interested to buy more from you and some others may not be interested in making any additional purchases.
So you need to,
- Utilize the existing customers’ data that is available at your fingertips
- Carefully analyze this data to understand your buyers’ buying behaviors
- And figure out who is most likely to make additional or complementary purchases from you and who is not
Once you identify your target audience, create a document consisting of their detailed profiles which include,
- Customers’ demographics
- Their goals
- Their needs
- Their pain points
- Their product usage
- Their interest in your product etc
This document helps your sales reps when they do the up-selling or cross-selling
4. Segment this customers’ list
In order to make it much easier for your reps to carry out up-selling and cross-selling, you can further segment this list of targeted buyers.
For example, from a strategic standpoint, you may want to identify
- The biggest and most profitable segments of customers
- Segments with the highest customer lifetime value potential
- And also those segments of customers which may be least profitable but still are very important for you to expand your businesses reach
5. Map products and customer segments
Once you’ve defined your potential buying segments, you need to map out various products and services to various customer segments. Start by looking at what products or solutions each of your customers already own (which should be available in your CRM system) and where the “white space,” or opportunity, is.
Based on your evaluation, you can build special views for your salespeople in your CRM system so they know exactly what to sell to each of their accounts.
How do you go about up-selling and cross-selling?
1. Ask probing questions
Effective upselling and cross-selling starts with truly understanding your customer’s needs. Teach your reps to ask probing questions throughout the sales process, to identify the right products and services for them, as well as the right upselling and cross-selling opportunities.
The goal is to establish a long-term relationship and build strong customer loyalty.
2. Keep it simple
Offering too many products or services at once can backfire by creating confusion and diluting the customer’s attention. Teach your reps to limit their upselling and cross-selling efforts to only a few items that provide a clear benefit to the customer.
As they work with the client and build a long-term relationship, more opportunities to sell additional products or services will naturally arise.
3. Offer upsells and cross-sells that make sense
If you’ve ever waited on the phone for a customer service rep to help you solve a simple problem, only for them to offer a million “opportunities” before asking for your information, you can understand the frustrations your customers might feel. So suggestions of a cross-sell or upsell that’s completely out of the field will not only frustrate the customers but also endanger their relationship with your company.
Your sales rep’s suggestion has to fit the customer’s exact needs at the very moment when he or she is discussing them with your rep. Ask your sales reps to listen to the signals from the customers like “I wish I could do X” or “Next we want to try Y”. Ask them to actively listen to the customers’ needs and desires. This gives them an idea of what more do the customers need to achieve their desired results. This helps them to determine which of your products or services could help them, and offer a cross-sell or upsell.
4. Determine the right time to upsell or cross-sell
While upselling or cross-selling, it’s extremely important for the sales reps to get the timing right. If they pitch the upsell or cross-sell at the wrong time to the customer there is a good chance that it might backfire. The customer might back off altogether from doing business with you if the rep tries to push a sale. So, the sales reps need to carefully analyze the behavior of customers and the scenario to determine the right time to do the upselling or cross-selling.
- In some cases upselling and cross-selling often takes place at the end of the sales cycle, when buyers have already committed to the purchase
- In other cases, it would be better to integrate the upselling and cross-selling process into the entire customers’ buying experience
Train your sales reps on when to use which strategy
5. Demonstrate value before making the pitch
Once the reps determine an upsell or a cross-sell offer that makes sense for a customer, their work isn’t done. They need to make sure they demonstrate the value that the additional products or services will add to the customers’ lives.
For this, they can use things like customer case studies, testimonials, and even positive customer reviews to show the customers how they can use the additional product that they are pitching to achieve their goals. They can also share the data that shows what customers can achieve using your product or service.
They should also ensure to build value by taking a consultative sales approach. Your sales reps become more than “just” sales reps when they inform your customers about a product that would add value but they did not know about it. They aid in the discovery process for new solutions that can make their customers’ lives easier.
6. Offer loyalty perks
If you successfully close an upsell or cross-sell congratulations!
However, your job still isn’t over.
You’ve successfully convinced a customer to spend even more money on your deal on top of the money they’re already spending on the primary product. So you should make sure to reward your customers for spending more and for trusting your consultative guidance.
When a customer takes an additional step with you to spend more and remains loyal, take initiative and reward them for it. Some ideas for showing your thanks could include:
- Sending them a thank-you letter
- Sending them a piece of company swag
- Offering them a free gift or discount code for a future purchase
7. Follow up
Often, the best cross-selling and upselling opportunities arise after the customer has already made and enjoyed his/her purchases from you. Train your reps to make it part of their routine to follow up with existing customers to ensure they’re happy and to suggest appropriate upsells and cross-sells from time to time.
This can be done through follow-up emails, phone calls, or personal visits.
Looking for some tips to successfully drive cross-selling?
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Published on Thu Sep 2 2021