Unlock Business Growth with Powerful Upselling Techniques
As a business, your bottom line is the one truth that tells you exactly where and how you are. It defines your company's performance, product success, and employee effectiveness, which reflects on your balance sheet at the end of every month, quarter, and year.
Numerous ways exist to improve those numbers by combining product and service upgrades or offering additional products and related services.
One of businesses' most commonly used tactics is the art of upselling. Defined as a sales technique to persuade your customers to purchase a higher-priced product than the one they initially intended to buy. Almost all online products or service providers widely use this technique due to its high conversion rates.
A basic example is when you purchase a hosting plan for your website. You may see up to three or more plans that offer various features. In this instance, the company wants to show you the benefits of an option that may be higher in price but provides more value for your money.
The Cost of a Customer
Before we discuss some of the tried and tested methods for upsell conversions, it's essential to discuss the cost of Customer Acquisition (CA) and Customer Retention (CR).
Your CA cost refers to the money you spend on advertising and marketing before a customer signs up. This cost should be lower than the price of your actual product. On the other hand, your CR cost represents the expenses incurred on support and maintenance to retain that customer.
Did you know? It costs five times more to attract a new customer than to keep an existing one.
Another noteworthy statistic is that it is about 60% easier to sell to an existing customer, while the probability of signing up a new customer ranges from 5 - 20%.
Upselling to Your Most Active Customers
You might wonder, "If a customer has already bought into my business, do I need to bother them to purchase something else?"
Considering the statistic mentioned above (60% of the time, it works), the answer is yes. Now, let's learn how to achieve that same metric for yourself.
1. Checking In with Present Customers
The most effective way to encourage your current customers to buy a product you know they will appreciate, regardless of the price, is by maintaining an open communication channel through email, phone calls, or even regular mail.
While they may be satisfied with their current purchase, they may still need to be made aware of any new products you may have.
By sharing information, you empower them to conduct their research. Following up with a more personalized approach allows you to seal the deal.
2. Offer discounts for Renewals or New Product Launches
Everyone likes a bargain, even when being upsold. Utilizing your communication channels and sending seasonal or anniversary-oriented discounts can motivate active customers to consider renewing their subscriptions or purchasing the next level of your offering.
New product launches present the best opportunity to maximize active client conversions. Since your product already has their investment, you can put in little effort to convince them to consider purchasing.
3. Limited Deals
Scarcity and exclusivity create a sense of urgency in the human psyche. Think back to Facebook's early days when they restricted access to students of select colleges, leveraging our natural inclination towards things that appear limited in quantity or are time-bound.
By tapping into the urgency for your product offer, you can incentivize customers to act. Examples include offering a service plan with extended warranties, customized functionalities, or a discount code that expires within a specific timeframe.
4. Share Customer Stories
Finding new ways to convince an existing customer to upgrade may seem challenging. Numerous marketing studies have shown that sharing customer reviews and stories about the product can effectively persuade current and potential buyers to increase their commitment to the business.
Social media mentions customer communications, reviews, and ratings all contribute to the success of your product.
Some customers may need to be made aware of how the product has positively impacted another person's life; the influence of social confirmation plays a vital role for active customers.
5. Impactful Customer Service
This point may sound similar to the first one, but it carries a distinct difference. Customer service ensures that not only are your clients informed about your product, but your support staff is also.
Imagine a scenario where your client calls in regarding their subscription with your company, but the customer representative was unaware of a recent upgrade. In such a case, the trust between you and your client diminishes.
Consistently keeping your support staff updated with training about your product helps your current clientele feel confident about their purchase. Areas like product functionality training, making them familiar with common error scenarios, and documenting user requests are instances where you should always be a step ahead.
In conclusion, effective upselling involves identifying opportunities for your customers and presenting them at the right time based on their personalized profile.
Livedocs can give you clear insights into your customers and what is working. Try it out today.
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