What Is An Upsell? How Upselling Can Greatly Increase Profits

Upselling is used in various businesses and industries to increase profits from a sale. We’ve all experienced a form of upselling in our everyday transactions.

Examples are from the waitstaff at a restaurant promoting a higher-priced menu item to the “pro” version of many smartphones on the market right now.

The basic philosophy is to offer an existing customer a more premium or exclusive offer of equal or slightly higher price, adds more value for the consumer than the original purchase, and increases your sales.

This article will discuss the benefits of upselling, best practices to consider, and give some examples of upselling in action.

When a customer makes a purchase, a recommended exclusive feature or an upgraded item is offered, and that is an upsell.

The reason to upsell in your business is simple.

You’re creating more opportunities for additional product or service sales by upselling. And as you know, more sales equal more significant profits.

An upsell’s benefits are that your business can enhance your potential sales. In fact, it’s thought to be 70% easier to sell to a current customer than it is to create a new customer.

New customers convert at less than 10%, so you can see the value of targeting your upsell to a current customer already in the buying process.

Upsell Definition

By definition, upselling is the process of a sales technique that focuses on increasing sales by encouraging the client to make an additional sale, usually at an equal or slightly higher price than the original purchase price.

There are three upselling stages that need to be considered in your sales strategy. Those stages are opportunities for you to increase your sales and occur before, during, and after the initial sale.

1. Before The Sale: At this stage, there hasn’t been a purchase, and your team is offering an upgrade to what the consumer is seeking or making an upgrade to their browsing interests at a discounted price.
2. During The Sale: This stage can be the most tricky to pull off successfully. You don’t want to overwhelm the consumer with too many options, prices, and amenities that may confuse or distract the customer. The goal is to offer one option that may be similar to what the customer may already be considering.
3. Post-Sale: This stage is the follow-up that could be an email with an option for a future upgrade at a discount or a unique opportunity that only someone that made a recent purchase may receive.

When done correctly, upsells can vastly increase the profits of any organization. To implement an excellent upselling strategy will take some dedication to train your staff on best practices to prevent causing any animosity between your brand and your customers.

Don’t confuse the idea of upselling to that of cross-sales. With a cross-sale, you’re offering your customer similar products that are usually purchased together versus providing more value to the original item.

We’ll discuss upselling examples later in this article, but first, let’s address the benefits of upselling for your sales team.

Better Customer Relationships

By upselling to current customers, you’re offering them added value at a reduced price. This strategy works because by upselling a premium or upgraded version of your product, mostly if it’s offered at a discount, customers see the value they gain over time and enhances their opinion of your product.

Sales Are Easier with Existing Customers

Lead generation can be costly and labor-intense without the possibility of a return on the investment. It’s exponentially easier to make a sale with someone already familiar with your product than it is to spend the time and money to create a new customer.

Lifetime Customer Value

Over time, brand loyalty creates more sales than multiple new customers over the course of a customer’s lifetime. Upselling a premium version of your product or service enhances the value your current customer feels about your product. That emotion can be strategically utilized with your marketing to create brand loyalists that will return to your business time and again.

The benefits of upselling for overall sales can be huge if implemented correctly. There are some dos and don’ts with upselling, and these best practices will improve your overall sales and increase brand loyalty in the long-term.

The best practices should always consider maximizing the relationship between your brand and your customers, regardless of whether the upsell was successful.

Examples of Best Practices for Your Upsell Program:

• Keep The Upsell Price Low
  When you recommend your upsell, the product should enhance the value of the product or service that was just purchased and should have a price-point equal to the original purchase. Ideally, products at a slightly lower price than the original product sell best though you could offer a more expensive upsell by adding a discount to its price.
• Don’t Be Pushy Or Sleazy In Your Upsell
  Nobody likes a pushy salesperson. People don’t appreciate being treated as just a means to an end, and a pushy, aggressive approach will turn off more sales and could impact your brand’s image with those customers.

• Accept No As An Answer
  Just as important as not being overly aggressive in your upsell, it is also part of best practices to learn to accept the answer, “no.” One sales technique to accept “no” while still planting a seed for the consumer to consider is simply, “if you change your mind, I’m here to help.” This language puts the decision-making process back to the consumer and helps enhance your brand image by leaving a positive lasting impression.
• Educate About The Upsell Advantage
  The strategy that works more than any is to impress the consumer on the upsell’s advantages, especially related to the recent purchase. Restaurants use this all the time when the waitstaff recommends a “personal favorite” to pair with whatever item the customer has ordered.
• Always Be Closing – ABC’s Of Upsell
  There’s a delicate balance between always working the upsell and coming across as too pushy or aggressive. Instead, focus your tone and pitch of the upsell as a benefit to what was already purchased, show how it will enhance user experience.
• Use Side-by-Side Comparisons
  Show how the upsell compliments, enhances or maximizes the original product. Showing the two side-by-side is a great way to show the value and benefits of the premier option you’re selling.
• Offer Immediacy To The Upsell
  We’ve all heard language in a sales pitch such as, “if you act now, we’ll throw it x, valued at $Y, for only a low, low price of…” Make the upsell discount an advantage to act immediately. Let the consumer know that a delay will lose the discounted price if they consider the upgrade as a standalone product later.

With upselling, you’re recommending upgrades or premiums for your customer as they make an initial purchase. This moment in the sale process is an opportunity for your organization to make additional sales if handled correctly. The key is to manage the upsell delicately, and our best practices discussed previously will guide your team.

Now that you understand the basics and best practices of upselling let’s turn attention to upselling examples and how those lessons may be applied to your business. 

Upsell Examples

Now that you understand the benefits and best practices of upselling, there are some great examples and ideas to consider for your spelling strategy.

Would You Like Fries with That?

At a fundamental level, restaurants are all about upselling. A good example is when you are ordering an item, the server makes other menu suggestions that pair well with an appetizer or drink. We’ve all heard the term, “would you like fries with that?” Little did you know that phrase is upselling in action.

Another strategy that restaurants use is to offer a larger size of the food being purchased. Fast food operations are an excellent example of providing an upsell, especially when a customer orders a beverage. The person taking the food order will offer a larger-sized drink, sometimes without mention of the price, which is not much more than the original item’s price.

Service Warranties And Product Insurance

One of the more profitable and popular upselling strategies is to offer an extended warranty or product insurance.

Apple is an excellent example of using this upsell technique in action. When you purchase an iPhone or other Apple device, there is the option to purchase Apple Care for product protection at check-out. The number of people that purchase this “peace of mind” and product warranty far outweighs the number of claims that Apple takes care of, making this option a hugely successful upsell program.

Use Messaging And Pop-Ups

Amazon has upselling down to a science. Every time a customer researches an item on their platform, they offer similar or newer versions of the item a customer has searched. This tactic utilizes side-by-side comparisons and is usually located right below the item about to be purchased. It gives the customer the offer immediately without being pushy or aggressive.

Upselling can be a significant profit source for your business if implemented correctly. Utilizing the tips we’ve discussed, and some of the examples we’ve shown should inspire you and your sales team on ways to enhance your upselling strategies.