Tips for encouraging cross-selling and upselling in your small business

Cross-selling and upselling are distinct business strategies, but they share the same goal: to increase the value of individual customers by conducting further business with them. In essence, you’re aiming to sell more to every person that makes a purchase from you.

Cross-selling is promoting items and services complementary to your main product based on what that customer may need to go with it. Someone purchasing a laptop could well require software so that they have the capabilities to do whatever it is they’re buying the laptop for. They might need software packages for writing, photo editing, or music production. Someone looking to hire a caterer for a party may also be interested in entertainment, serving staff, or even a marquee.

Upselling retains a focus on the main product or service, but the aim is to get the purchaser to spend a little more on a superior product. This could be anything from an upgraded service package to the chance to watch a film at the cinema in a “VIP” screen or in 3D.

In both instances, the process must be managed carefully. Maintaining customer relations, especially trust, is very important. Customers that feel sold to are more likely to leave, and small cross-selling and upselling gains can be completely offset and undone by customer attrition. In fact, businesses that reduce their customer defection rate by just 5% can expect to increase profitability by 25 to 125 percent. This shows pretty clearly that cross-selling and upselling must be done well in order to be worthwhile.

Happily, the research also shows that helpful cross-selling and upselling will increase customer loyalty. If you can show customers that you’ve thought about their needs and your relationship with them, they are far more likely to stay with you. Businesses have been shown to lose around 20% of their customers each year by failing to maintain customer relationships. Putting in the time to find the right solutions for your customers can be not only kind, but profitable.

So how can you ensure that your business is cross-selling and upselling effectively? We’ve compiled some tips to make both of these strategies part of your day-to-day business activities so that you and your customers can reap the rewards. These are tips you can implement yourself from the top or disseminate down to customer-facing employees to make use of.

Put customer needs first

The most important thing to remember is that you are not aiming to make a quick extra by exploiting your customers. Every alternative you offer them should add real value. They may not take you up on every offer that could benefit them, but they won’t resent your attempts as long as you’re not trying to swindle them for something they don’t need.

The best way to know what will offer value is to know your customer! The better you understand them, their position and situation, and their needs, the more likely you are to be able to find the right product for them and demonstrate its worth.

Imagine you’re a gym negotiating a corporate membership with a local business. You’ve taken the time to learn that the business is running a “get active” campaign for people who don’t normally get enough exercise. Are they more likely to be interested in your group-rate beginners cardio classes or your discounted professional bodybuilding supplements? By understanding the customer, you will be best placed to make relevant recommendations.

Know your offering

Equally, when the time is right, it’s important to come up with the best offer for the situation. If you have a large range of products and services, great! Be sure to know the ins and outs of them and you’re likely to have something of interest to more customers. But which ones? Not all of your products will be of interest to all of your customers. Select a few that are most relevant and focus your sales efforts on them rather than confounding customers with dozens of different deals.

This will mean that on occasions, you don’t have any suitable offers. That’s fine! Not forcing cross-selling or upselling will mean that you won’t try your customers’ patience. Accept that not every sale is an opportunity to profit. Equally, you may find it worthwhile to empower your sales employees to customise offers as they see fit. If they believe there’s an opportunity to add value with a custom bundle or free shipping, you can easily personalise the deals you offer.

Stay informed

Your job doesn’t finish when you close a sale, even when you have incorporated upselling or cross-selling. It’s important to continue to maintain the customer relationship into the future. Have employees follow up to see how customers are getting on. If they’re having difficulty, you’ve been proactive in addressing their problems. If they need extra products or upgrades, you’ve found yourself another sales opportunity!

It’s also worth gathering as much information as you can about your target market. What are competitors offering? What are the other needs of people who buy your products? All this can inform your strategy going forwards. Reviews and feedback, gathered formally by yourself or informally through social media, word of mouth, or the web can offer useful information as well as valuable social proof to show future potential customers.

With these tips in mind, you can expect to improve your customer satisfaction and your bottom line at the same time—it’s a win-win!

About the author

Jake Waller is a wordsmith who plies his trade here at Findmyshift. He uses his background in engineering to simplify complex topics for a variety of tech firms. When not writing for Findmyshift he blogs under a pseudonym at My Name is Skylance and has a passion for creative writing and editing, about which he's always talking on Twitter.