Sweeten Your Bottom Line with Cross-Selling and Upselling
A long-time “check sweetener” in food service, cross-selling and upselling offers small business owners across all industries a chance to build or deepen the customer relationship and increase the bottom line.
“Would you like fries with that Coke?”
Upselling and cross-selling, also known as suggestive selling, deliver a higher margin per customer transaction by simply listening to the customer and recommending something more. If suggestive selling isn’t already part of your regular sales pitch, it’s time to switch gears.
Gear Up for Increased Revenue
Upselling is when a business representative suggests an upgrade or related accessory to enhance the product or service the customer has already committed to buy. For instance, after listening to a customer excitedly detail the trail ride she’s planned for her new mountain bike, the bike store owner suggests she purchase a tire repair kit and a “splat bag” filled with first aid supplies. Cross-selling is suggesting the customer add a quarterly maintenance package to ensure the expensive bicycle she just purchased stays trail-ready.
Actively upselling increases sales by more than 4% while cross-selling adds .2% sales value. Though these numbers may seem small, they expand when combined with engagement that drives return business over customer lifecycle. The most successful suggestive selling is not just about booking the sale—it is about building relationships, and prioritizes customer service over a high-pressure sales environment.
In fact, companies that emphasize customer engagement experience a 22% boost in cross-sell revenue with upsell profits rising by 38%. A cross-sell recommendation can save consumers time by anticipating what they would need to purchase later anyway, eliminating a return trip and the future headache that comes with it. Upselling, on the other hand, helps create a sense of upscale value by offering higher quality products that can alter a consumer’s perceived satisfaction with their purchase, or even the entire business.
According to Licia Accardo, owner of Café L’Appetito, a second-generation family business celebrating its 40th anniversary this year, seemingly small upsells multiply quickly. “I tell my employees the more we upsell the better. For instance, if they suggest a customer add a bag of chips for $1.59, that’s $190.80 extra for us. While that doesn't sound like much, multiply that by every day we’re open and that’s an additional $59,529.60 annually.”
Build and Sustain a Suggestive Selling Culture
Techniques like upselling or cross-selling benefit the business bottom line, and perk employee pay, especially in business models where employees earn tips, commission, or revenue sharing for repeat customer sales. For instance, a restaurant server can easily increase their check average, tips, and the likelihood a customer will request to sit in their section on the next visit by suggesting a brand name vodka when a customer asks for a vodka tonic, and recommending an appetizer, dessert, and special premium coffee. Every recommendation is an opportunity for the server to spend more time with the customer, building a profitable connection along the way.
Successful suggestive selling is about the finesse, not the finagle. A customer should feel heard, and the recommendation should be targeted to a specific element of the sale. A customer who just purchased a gym membership is unlikely to welcome a pitch to purchase a 10-scoop punch card for the neighboring ice cream parlor.
Invest in Training. Setting aside a few hours to train employees in the art and science of suggestive selling is well worth the time. Training may include active listening tips, how to personalize a prepared script, scenario role plays, product and service benefits, target cross-sell and upsell complementary products and services, and an opportunity to set performance expectations.
Know the Product. According to a Wharton School of Business study conducted by Dr. Marshall Fisher, an employee trained on a specific brand sold 87% more of that brand than their peers. “It’s clear that interactive training, delivered in the right way, makes sales associates more productive,” said Fisher. Fisher’s study validates that nothing seems to drive sales more than expert advice. The study found customers want help from those in-the-know about products and services, and in-the-know employees sell up to 123% more than others. Almost three-quarters of survey respondents said that product knowledge is the most important thing they need from a salesperson, and half of customers want expert advice on what they should purchase.
Establish a Plan for Peak Traffic. It’s easy to lose sight of suggestive selling during peak business hours. Instead of tabling the opportunity, create an abbreviated sales pitch, or opt for either the upsell or cross-sell. If forced to choose, go with the upsell which is 20 times more effective than the cross-sell because the recommended upgrade or extension is directly related to the purchase. Even if the customer rejects the suggestion, the limited interaction helps educate customer and set the stage for the next purchase.
Promote Bundles. Building and prominently displaying product and service bundles—in store or online—is a passive way to promote value-added options. Consumers appreciate the “at-a-glance” display and business owners will enjoy the roughly 3% increase in sales.
Time the Pitch. Timing the suggestive selling pitch can be important. Cross-selling at the beginning of the transaction proves useful when the customer is not sure yet what they want. Alternatively, upselling makes the most sense at the end of an interaction once the customer establishes their needs., observing customer behavior is key. “It’s important to read customer body language. For example, when I see a customer approach the counter and start looking at the displays featuring chips, drinks, cookies, chocolates, and more, I take that as an invitation to upsell,” said Café L’Appetito’s Accardo.
Small businesses simply do not have the cash flow to waste viable sales opportunities. Acquiring new customers is anywhere from 5-25 times more costly in advertising dollars than it is to simply retain a customer and maximize sales during their experience. The importance of each transaction increases in tandem with the rising tension surrounding the Delta variant causing consumers to hesitate.
Right now, for small business owners, perfecting sales techniques is a must—and each has their own way of making the sale.
“I always greet a customer with a question regarding what they are looking for and what problem they are trying to solve,” said Kelly O’Neill, artist and owner of Fusion of Iron and Earth. “Then once they have given me some information, I notice what they are interested in and then encourage them to visualize the art in their space.”
O’Neill notes that creating special offers and connecting with potential customers is key to developing a strong sales pitch.
“I always provide special terms or offers to repeat customers and if they are showing interest in more than one piece, I will create a bundle price as well as offering same day delivery,” says O’Neill.
“Most of my selling is convincing a spouse or partner that their significant other deserves the art piece. However, because it is art and I am committed to having only enthusiastic clients, I remind them that the art must ‘speak to them on an emotional level.’ If they want to own a piece of my art, I want it to make them feel something.”
Maximizing Customer Lifetime Value
Customers, business owners and employees win when suggestive selling ensures customers go home with everything they didn’t even know they needed, instead of pushing things they don’t want. Take time to listen, anticipate customer needs, establish expertise, and build a connection with customers. Sales, referrals and customer loyalty will follow.
”Employees who care about the customer and overall success of the business make a huge difference,” said Accardo. “Take care of your employees and they’ll embrace suggestive selling.”
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