What Is Upselling? How To Upsell? [Detailed Guide]

Although it is true that there are as many sales strategies in the world as there are salesmen; you still won’t disagree with me if I say upselling is among the most important strategies to increase the customer lifetime value and build a good relationship with them.

“Medium or large?” “Would You like an extra shot?” “Burger with cheese?” “Would you like extra cheese on your pizza?” adds millions to the revenue of Mcdonald’s, Starbucks, Burger King, and Domino’s.

This sales technique of encouraging customers to buy a more expensive version of a product has been used for decades in a disguise of increasing customer satisfaction. Some call it the ‘best value offer’, some call it the ‘most popular choice’, while some give it more enticing names like ‘just for you’ or ‘recommended for you’.

What Is Upselling?

Upselling is a sales strategy where the seller encourages the customer to spend more by recommending an expensive, an upgraded, or a premium alternative of the current consideration so as to maximise the value of their purchase.

The idea is to make the customers spend more than they originally thought they would.

Importance Of Upselling

Upselling is an art of enhancing the shopping experience of the customers while getting most profits out of them. Many online and offline retailers rely heavily on upselling strategies because:

It Increases The Customer Lifetime Value

Customer lifetime value is the value derived from a user over his lifetime. Customers can be divided into very profitable, profitable, and not profitable and strategic upselling techniques can be used to convert the not profitable customers into profitable customers and profitable customers into very profitable customers.

Many times a seller use upselling strategies on subscribed users to make them choose a more profitable option when they renew their subscriptions. This results in more revenue to their business without extra investments.

Customers Appreciate Upselling

Upselling enhances the overall shopping experience of the customers by educating them about better alternatives to their current choice. Many customers even appreciate the premiums, upgrades, or add-ons offered by the salesperson as choosing the alternatives could result in them getting a better deal.

Existing Customers Appreciate Upselling More

According to a survey, acquiring $1 by up-selling to a current customer is 68% more economical than it is to acquire $1 from a new customer.

Upselling Helps Building Relationships

Upselling is a powerful selling strategy which results in a win-win situation for both the business and the customer. The customers are offered more value which makes them feel like they got a better deal while the business maximises its revenue. This eventually builds up a relationship between them.

Upselling Strategies & Techniques

Tell them how they’ll benefit. When they’ll benefit, you’ll benefit.

Just like cross-selling, upselling is a smart strategy used during every stage of the marketing funnel, right from the lead generation stage to the after-sales stage.

Before Sale

Product recommendation and premium/add-on discounts and offers at customer touch points. Ecommerce websites have recommendations and suggestions in the form of ‘most popular deal’, ‘best offer’, etc.

During Sale

Recommendation by the salespersons and parasite offers at the point of sale in retail stores. Ecommerce websites use parasite offers while checking out and while abandoning a cart.

After Sale

Personalised emails, SMS, and calls to tempt customers to choose a better version next time.

Upselling Examples

Be it a retail store, an ecommerce store, a B2B business, a B2C business, or a C2C business; upselling works wonders when used properly. Here are few examples of successful implementation of upselling strategies:

Inmotion Hosting

Inmotion hosting, just like any other web-hosting providers, provides discounts when you purchase a web-hosting plan for a longer period.

This benefits the customers as well as the company as the customers get a better offer and the company gets to retain customers for a longer time.

Netflix

Netflix provides extra benefits like HD and ultra HD streaming, 2 and 4 devices for offline viewing, etc. to users who purchase their standard or premium plans. Many customers change their purchase decision during this stage as they think upgrading to a better plan gives them more benefits.

Starbucks

The employees working with Starbucks are trained so well to upsell that customers don’t even feel like they’re being targeted by a sales strategy. The employees build friendly relations with the customers and ask them if they want extra shots (or biscuits or cake) when they order a coffee.

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