Upsell! Fuel more sales from every customerUpsell! Fuel more sales from every customer
Just how can you spark more sales among wary shoppers? Experts say one of the most powerful techniques is "upselling." That's the promotion of better quality, higher priced merchandise which more closely meets customer needs.
March 26, 2013
Just how can you spark more sales among wary shoppers? Experts say one of the most powerful techniques is “upselling.” That’s the promotion of better quality, higher priced merchandise which more closely meets customer needs.
“Upselling spells the difference between ‘just getting by’ and having a very profitable year,” says Dr. Jon M. Hawes, director of Indiana State University’s Sales and Negotiations Center, Terre Haute (indstate.edu/business/sales). Retailers commonly enjoy sales increases of 20 percent or more when they upsell their current customers, adds Hawes. “Revenues from upselling are usually over and above a store’s break even point. So the extra sales turn quickly into profits.”
Upselling is even more powerful when combined with “cross-selling.” That’s the promotion of add-on items that enhance the value of the customer’s initial purchase. “Something as simple as offering to show the customer a related item can lead to more sales,” says Hawes.
Difficult times make upselling and its cross-selling cousin are all the more important. “When times are tough customers may need an extra nudge to spend more or select an upgraded product that offers benefits beyond the basic, standard model,” notes Hawes.
Just what are some effective extra nudges? Here are some tips from sales experts around the country.
Upselling starts the minute a customer walks into your store. Address the individual in a way that creates a personal bond that leads to more buying. Maybe the greeting is as simple as “Hey, welcome to our store.” But the actual words matter less than the spirit behind them. Both your voice and your body language should communicate to the customers that you are glad they are there.
“It’s not so much what you say as your tone of voice,” says Bob Janet, a marketing consultant based in Matthews, NC (bobjanet.com). “Make your words sound sincere.”
Avoid the old standby “May I help you?” Not only is the customer likely to think and say “no,” but it betrays more interest in selling merchandise than in filling the customer’s inner needs.
If you are not currently serving someone else when a new customer arrives, adds Janet, follow your greeting with a cheerful question that includes sales information. Here’s one example: “Are you here today for [a featured item], or the special department we have on [a merchandise category]?” This communicates new information and allows the customer to respond with a direct statement of current need.
Now, how about that customer who wants to be left alone? Maybe you pick up this attitude from the person’s body language, accompanied by a statement such as “I am just looking.” In such cases Janet suggests having a “come back” ready. Here’s one example: “Take your time. I am here all day for you.” Another reply might be: “Great! My name is John. If anytime you have any questions I’m right over here willing to help.”
Whatever the customer’s mood, it’s important not to hover. The customer who feels rushed will turn negative on your store right away. Says Janet: Look upon browsers as people who are collecting information for future purchases.
Bonus tip: Busy with another customer when a new person walks in? Follow up your cheerful opener with a line such as “I’ll be with you in a couple of minutes.”
Greeting the customer with enthusiasm was step #1. Next comes determining the customer’s real needs—springboards to success that are more important than your store’s quality merchandise and service. The value of those latter factors lies not in their features but in their use by a customer.
“The magic in selling arrives when you stop thinking of yourself as a sales person of merchandise and services,” says management consultant Dr. Wolf J. Rinke, Clarksville, Md. (wolfrinke.com). “Think of yourself as being in the business of meeting the needs of the customer. The only way to do that is to get your mental attention away from you and your store, and focused on the customer.”
Suppose the customer, in response to your opening greeting, indicates an interest in a certain item. Remind yourself that the real topic is not that merchandise, but the related underlying customer need. Rinke suggests responding with a question that will help uncover that need. Here’s one example: “Let me ask you: what was the last [xyz] you purchased? What was the reason why you bought that particular [xyz]?”
Perhaps the customer will respond with a statement of how the merchandise was used in a home or business setting. That customer activity, in turn, will suggest the real use of the merchandise. You will then consider how various related items of merchandise can satisfy that need.
The customer might also respond to your question with a statement such as “It was the highest quality available at the time” or “It was the least expensive one I could find.” Either answer gives you a clue to the customer’s current needs. “Past behavior is usually predictive of future behavior,” says Rinke.
If the customer selects a lower cost item, acknowledge the value of the item and its attractive price tag. But also go on to emphasize how a higher priced, better quality item will satisfy the customer’s needs better by lasting longer, being easier to use, or performing at a higher level.
A statement such as this will help reduce resistance to price: “While it may seem high priced at first, when you look at the following benefits you’ll see that you get more for your money.” Then state the benefits. Here, as in any discussion, forget about touting merchandise features. Instead, translate those features into benefits that will better satisfy customer needs.
Bonus tip: To show how your suggestions revolve around your desire to better meet customer needs, paint a picture of the customer using the item: Tell stories of how the customer will get more out of a purchase of better quality product.
Moving the customer toward higher priced merchandise is one sales driver. Another is suggesting related add-on items that enhance the first item’s value. That’s called “cross selling.”
An item you suggest in cross selling should make it easier for the customer to enjoy the first product selected. “The additional item should make the first one more fun or efficient for the customer,” says Bob Phibbs, a retail consultant based in Coxsackie, NY (www.retaildoc.com).
You can promote related items with a statement such as this: “One thing most people often get is a [related item], since it helps them [describe the activity].” This emphasizes the benefit of the add-on item, and it implies a third party endorsement that you lack if you simply say “I suggest you also buy [the related item].”
You can also introduce the related item couched in service terms such as “How about saving yourself a trip back in a couple of weeks? Would it be convenient to purchase [related item]?”
Promote the add-on by asking questions about how the customer will be using the first item, then show how the additional item will make the experience better. Remember, though, that the best add-on item practically sells itself: Its benefit will be obvious in its description.
Become skilled at upselling and cross selling and customers will view your store as an exclusive source for their needs. Says Phibbs: “Make your store a ‘one stop shop’ so the customer does not have to look at a competitor.” Far from being upset that they purchase more than anticipated, customers will thank you for suggesting solutions that would obviate multiple shopping trips. Always remember that customers, even if they don’t realize it, are really looking for sales people to guide them.
Bonus tip: At the conclusion of your engagement with the customer don’t just say ‘anything else?’ Instead, say “what else is on your list?” Very often the customer will pause and say ’I’m sure you don’t have this’ but maybe you do. And often this will open the door to another sale.
Train the staff
You probably know that salesmanship doesn’t come naturally to many people. Just think of your frustrating experiences shopping at other retail stores. So the question arises: How can you train your own staff to upsell and cross sell?
Start with an understanding: Many sales people will resist upselling because they think it is too “pushy.” You must explain that you are not asking them to “make” the customer buy something. Instead, you are asking them to help customers get “more bang for the buck” spent on merchandise and services. Customers, in turn, will be pleased with the greater value received.
Train your employees in communication skills which engage customers in ways which inspire them to purchase more merchandise from your store. Some of these skills are described in the earlier sections of this article.
“Great sales training is not a matter of teaching fancy techniques for ‘closing’ a sale,” says John Tschohl, director the Service Quality Institute, Minneapolis (www.customer-service.com). “Instead, it’s teaching basic customer service skills which, taken together, can drastically increase sales.”
Practicing these skills is often easier said than done. “The hardest things for people to execute are the fundamentals,” says Tschohl. “Sales people need to smile, address people by their names, uncover needs, and communicate in terms that testify to deep product knowledge.”
Your employees cannot engage effectively if they lack that last item, says Tschohl. Employees, then, must learn everything possible about your store’s products. “I estimate that from 50 to 75 percent of people don’t know anything about the products they sell. A customer can tell that within seconds.”
Your employees must also feel as though their personal success is tied to that of your store. “No one goes to work asking ‘how can I make my company more money?’” says Tschohl. “So you have to uplift your employees’ hearts and show them how they benefit from your store’s success. Remember that the vast majority of people have personal problems, low self esteem and personal conflicts. So you have to focus on personal development and build people from within.”
Ongoing training should result in the creation of a dynamic, powerful sales team. “Try introducing a new and fresh training initiative every few months,” says Tschohl. “You cannot make a 25 year old perfect for life with a few hours work.” And include refresher sessions even for seasoned veterans. “People will slip back to their old habits pretty fast.”
It boils down to getting the best return possible from your investment in people. “Labor is your number one cost,” says Tschohl. “If the customer’s listening switch is turned off all your money is gone.”
Bonus tip: Set an example; employees will take their cue from you. “If the manager is not a role model it’s a problem,” says Tschohl. “The manager needs to be the best of the best.” That means knowing merchandise on the shelves and engaging well with customers.
How well are you doing on your campaign to upgrade your sales skills? Survey your customers several times a year. Ask them what they like and don’t like about your merchandise and services. What can you do that will make their store experience more satisfying?
Solicit employee feedback on new ways to engage customers and communicate your core goal to serve customer needs and exceed customer expectations. Encourage them to speak up and criticize if they see a policy is resulting in lost sales.
A concentrated campaign to train employees and solicit customer feedback will result in greater revenues. “Selling is not rocket science,” says Tschohl. “But when you become good at it you dramatically escalate sales.”
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