Upselling is not a new concept but it’s high time small business enterprises revisit its concept to increase their revenue, retain their customers and meet specific goals. If upsell is used in a rightful manner, it can enhance the customer experience and this in turn brings in better revenue from the old customers.
Upselling is a sales technique where the sales representatives sell a higher and expensive version of a product that a customer is planning to buying. When adds-ons or extra features are sold to the customer buying a specific product, that is also known as upselling.
Three Main Benefits of Upselling
Upselling builds profound customer relationship
When you make an effort to express the benefits of buying an expensive version of the same product and the customer is willing to make the purchase, its win-win situation to you as well as the customer. Here you have to talk about the value the product adds to the comfort of the customer. You need to understand that upselling in not a hard cores sales strategy or technique. Both you as well as the customers get the perk of upselling and this leads to a strong customer relationship.
Upselling to an existing customer is easier
The authors of the book “Marketing Metrics” revealed an interesting research finding. They revealed that “the probability of selling to a new prospect is 5-20%. The probability of selling to an existing customer is 60-70%.” This is actually a huge gap. The metrics show that it’s easier to upsell to an existing customer than to a new customer. Also it helps to increase the revenue and meet a seller’s target. A prominent entrepreneur, Joel York opines that SaaS companies should consider upselling by putting forth an upgradation plan to their existing customer by keeping the pricing at a minimum rate. He further went on to mention that SaaS and ecommerce firms should focus on making their existing customers happy and make efforts to upsell to them instead of concentrating on getting new customers.
Upsell helps identify your best customers
Your loyal customers have a well-accepted trajectory with your services or product. These customers are those who were with you during the initial stages before committing to full roll out. The best customers grew with your product and are the loyal ones who look forward to the release of your new products. Though initially, you may not have much data on your customer’s behavior, with time you will be able to understand the purchasing power and increasing usage of your products by the customers. Using this data, you can draw a timeline on how a best customer uses your product. Analyzing the life cycle of each customer will let you know if the customer is on track or whether he wants further support or onboarding. These analytics can help you in your marketing campaigns and strategies.
Upsell is a skill on which the firm should train its sales representatives. Apart from delivering a good customer support, it will help the firm achieve its sales targets and also make the customers happier. However, you should target your customers carefully. Never try upselling to an angry customer. Upsell when a customer hits the milestone and when the value of your product is apparent.