The Single-Most Powerful Strategy To Maximze Your Revenue Instantly!

June 25, 2007

It’s easy to relax and make the easy sales when people come to you to purchase or agree to purchase at your suggestion, but what happens when business dies off? How much money do you have to spend in advertising and marketing to attract a new customer? What if you could increase your profits without having to spend an additional dime?

Many small business people only really think about advertising when sales start to decline and panic sets in, yet how much benefit did they truly get out of their customers? They could take a leaf out of McDonald’s book and ask their customers if they would like to upsize their metaphorical purchase.

Cross selling and up selling are two of the easiest ways to make the most of the customers you have. This doesn’t mean you don’t have to do any marketing to attract new business, but new customers are expensive to purchase in terms of your marketing dollar. Increasing sales and attracting return visits from your current customers is relatively inexpensive and far easier if you have given good service. That is really the key, though, isn’t it?

Customers do not return if they have had poor customer service. So while, cross selling and upselling and encouraging return visits is far cheaper than advertising for new customers, they do cost you good customer service and an investment in credibility.

Up-selling can and should be to the customer’s benefit not just a revenue raising exercise. Done right, up-selling helps the customer purchase the best product for their needs rather than simply the cheapest. The financial benefits from making an additional effort at the point of sale can be substantial. A typical approach to up-selling would be to offer an attractive discount with the purchase of a complementary item. For example, if a person is purchasing a television you could encourage them to buy a suitable DVD player to go with it. Or for a washing machine, a dryer might be a compatible up-sell. You don’t know if the customer has already been thinking about it anyway, and a discount might persuade them.

Other forms of up-selling are to offer a free gift if the customer upgrades their purchase to a more expensive or more profitable product (for you). McDonald’s supersize campaign increased their profits by twenty five percent in the first campaign. When people are asked as they are paying if they would like a particular item, there is a strong likelihood that they will say yes. For example, in a clothing store you might offer someone purchasing a tee-shirt an extra tee-shirt at fifty percent off. If the profit margin is large enough and you turn over enough, this tactic is very profitable.

A specially purchased product for the purpose of up-selling can be very profitable for a business. A special buy in of underwear, for example, might work well in a clothing store. If the design is unusual and attractive, a sales person can pick up an item show the customer and ask if they would like to add it to their purchase at a special price. Research has shown that about twenty five percent of customers asked will say yes. This form of up-selling can actually add to the revenue substantially over time. The easiest way to up-sell anything is to simply ask the customer if they would like that item as well as whatever else they are purchasing.

In recent online tests, forty eight percent of customers offered an up-sell opportunity responded positively and decided to add the additional product to their purchase. Some successful online entrepreneurs have an up-sell conversion rate of a massive sixty to seventy percent.

If you would like to increase your sales through up-selling, asking yourself the following questions is a good place to start…

1. What is my current initial sale per customer and WHERE is it coming from?

2. What led them to this sale (marketing, advertising etc.)?

3. What are my other products or services that are not being sold to this customer during this sale that they may have a need, want or wish for?

4. Is this additional product or service relevant or congruent with the customer’s current purchase?

5. How can I include this product or service into my sales process?

6. Eliminating lead acquisition costs and the sales and marketing expenses that I do not have in order to up-sell this product or service - what is a profitable yet steeply discounted rate that I could charge IF the customer buys the up-sell with their current purchase?

These questions are important in planning your up-selling campaign business-wide, but questions 3, 4 and 5 are also important for sales people to ask themselves in each new sales opportunity.

In fact, once you have established an up-selling business plan, incorporating it into all sales training is essential. It is not enough to simply tell staff to offer an up-sell, you need to train them to recognize a customer’s potential needs so they can offer an appropriate up-sell opportunity to them.

Don’t forget, if you’re an online business, then offering an upsell in your online sales letters will be VERY profitable to you. SO if you’re selling a $27 product, you can easily offer premium to your product for $39.95, $49.95, $67 or even $77. Only testing will tell which upsell price works best for you.

Up-selling that increases your sales and profits, is a win-win situation with the customer walking away satisfied that they got a good deal. After all, you want them to come back. Remember, it costs an awful lot more to attract new people to your business even an online business. It makes a great deal more sense just to do a good job in the first place.

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