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What is an upsell: Learn the definition and value of upselling strategy

SixEleven

What is an upsell

An upsell is a selling strategy where sellers get to offer a customer an upgrade of what they’re buying or what they currently own. In upselling sellers can either offer a more superior product or the same one with an added feature. This helps customers to have options that were not considered at first.

For instance, a customer wants to buy or currently owns a basic refrigerator. The salesperson now gets to offer them a refrigerator with the latest model. Or, they can offer another refrigerator with the same model but with additional features for them to enjoy.

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How is it different from cross-sell

You can easily distinguish the two from each other: upsell is upgrading, while cross-sell is offering a complimentary product for a current purchase. 

In cross-selling, you can offer another product related to their purchase. This aims to add value to their current purchase. In upselling, meanwhile, you offer them a more expensive version of their purchase. 

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Ecommerce and retail businesses use both strategies to optimize revenue by increasing the amount a customer spends to them.

What is an upsell

Why do we upsell

Upselling can be a win-win situation for both businesses and customers. Your customers can get the best value for their purchase and improve their experience with your business. With this strategy, meanwhile, you get to:

  • Build better relationships with your customers. With the right objective, an upsell helps them ‘win’ by suggesting better products for their needs.
  • Retain your existing customers. It is a known fact that generating new customers is more expensive than retaining existing ones. This is where upselling can help you better.
  • Increase your Customer Lifetime Value (CLV). CLV determines the net contribution a customer makes over time. Higher CLV from your customers means higher revenue each existing customer brings without you spending more.
  • Make your customers come back for more. When customers know you provide great products and experience through upselling, they will surely get back for their future purchases.

How to identify upsell opportunities

According to a survey conducted by Salesforce, customers are more likely to leave a business when they feel they are treated only as numbers, not as customers. More than thinking about increasing your numbers and maximizing your profit, you should still put your customers first. In the end, customer satisfaction is still the key to having a successful business.

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In identifying an upsell, you need to:

  • Make the most out of your customer interaction. Ask them a few relevant questions on what they are looking for in a product and why did they choose this specific type or brand.
  • Put yourself in your customer’s shoes. You don’t just give them another version of an item without thinking about their specific needs and limitations. Put yourself in their place and understand their current capabilities.
  • Give information instead of a sales pitch. Again, inform your customers on how your offering can benefit them the most.  
  • Don’t offer a product that’s double the price than their current purchase. Instead, try to offer a discount on the upsell. If you can’t help to give them a higher price, offer a payment option that’s suitable for them.

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AboutSixEleven
SixEleven is the first Davao-Based solution-oriented contact center designed to provide quality services in Sales, Marketing and Customer Support in the Philippines.
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