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Upselling is a sales method that aims to offer a customer not the product they chose but a better and more expensive option.
How upselling works: a customer has chosen a laptop of 2020, a salesperson offers them an upgraded laptop from the same company but released in 2022. The 2022 laptop is faster, quieter, it has a softer keyboard but it also costs more. The customer compares the offers and chooses to buy a more expensive model. But if the salesperson's offer costs too much, they may leave because they feel forced to make an expensive purchase. If the offer is really profitable, the customer perceives it as help and decides to buy other things in this store.
How upselling works: a customer has chosen a laptop of 2020, a salesperson offers them an upgraded laptop from the same company but released in 2022. The 2022 laptop is faster, quieter, it has a softer keyboard but it also costs more. The customer compares the offers and chooses to buy a more expensive model. But if the salesperson's offer costs too much, they may leave because they feel forced to make an expensive purchase. If the offer is really profitable, the customer perceives it as help and decides to buy other things in this store.
What upselling is and how it works
How upselling works
Olga Tkacheva
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Upselling techniques can be used in many areas of sales when dealing with individuals or companies. Here are examples of what this sales technique looks like.
In SaaS system. SaaS is a subscription service, most often referred to as a model working with software. For example, when customers pay monthly or yearly to use CRM instead of investing in the development of their own. Upselling here is aimed to increase the tariff. For instance, you can immediately buy an annual subscription instead of a monthly one or get more perks for a larger payment.
A client uses CRM and pays for the number of contacts in it. As they accumulate, every next check becomes larger. And as the business grows, the client buys new contacts or functions. Profits grow because the customer base and receipts from every customer increase as well.
In online learning. On an educational portal for schoolchildren in the free version, you can study for a limited time. But if you buy a simple package of services, then you can study at any time. The packages are also different — in the simplest one there is access to classes at any time but the set of lessons is limited. You can only complete tasks in four subjects: Russian, mathematics, reading and English. The more expensive the package is, the more items there is access to.
In services. A cleaning company offers general cleaning, deep cleaning and post-renovation cleaning. If a client chooses the general one, then the idea of upselling here will be to offer them deep cleaning. For example, to show that even though the cost is higher this option is more effective because the result will last for a longer time.
A client uses CRM and pays for the number of contacts in it. As they accumulate, every next check becomes larger. And as the business grows, the client buys new contacts or functions. Profits grow because the customer base and receipts from every customer increase as well.
In online learning. On an educational portal for schoolchildren in the free version, you can study for a limited time. But if you buy a simple package of services, then you can study at any time. The packages are also different — in the simplest one there is access to classes at any time but the set of lessons is limited. You can only complete tasks in four subjects: Russian, mathematics, reading and English. The more expensive the package is, the more items there is access to.
In services. A cleaning company offers general cleaning, deep cleaning and post-renovation cleaning. If a client chooses the general one, then the idea of upselling here will be to offer them deep cleaning. For example, to show that even though the cost is higher this option is more effective because the result will last for a longer time.
It does not matter in what field the upselling technique is used, it is important that it takes into account interests of a client.
How upselling differs from cross-selling
Cross-selling is also a sales method which, like upselling, is aimed to increase profits and customer growth. They are different because upselling convinces a customer to buy a more expensive and upgraded version of a product that they have already chosen. With cross-selling, a salesperson adds other goods to a purchase, thus increasing sales.
For example, a customer buys a gaming laptop. With upselling, a salesperson will offer a new version of this laptop or this brand of laptops with better specifications. When it comes to cross-selling, a salesperson sells the laptop that a client has chosen and offers them a protective case, a gaming mouse and a keyboard. Both techniques can be used together: both to offer a more expensive laptop and a protective case.
For example, a customer buys a gaming laptop. With upselling, a salesperson will offer a new version of this laptop or this brand of laptops with better specifications. When it comes to cross-selling, a salesperson sells the laptop that a client has chosen and offers them a protective case, a gaming mouse and a keyboard. Both techniques can be used together: both to offer a more expensive laptop and a protective case.
How best to apply upselling
You can use upselling at different times of communication with customers: before purchase, during purchase or after purchase.
Before purchase. You can use upselling as soon as a customer enters an online or offline store. In an online shop next to simple laptop models, display more expensive ones, add comparison tables and demonstrate the benefits of buying a more expensive option. In a physical store, salespeople take this responsibility. Here one should be cautious: not to impose too much, be delicate and want to help genuinely. It is important not only for upselling but for customer relations as well.
During purchase. In this case, cross-sell is more suitable but you can also apply upselling. Along with cases and mousepads, you can also show more expensive laptop models. Some customers have goods in the cart for several days, because they are thinking about purchasing and an offer of another model may change their decision.
After purchase. This type of upselling is more suitable for selling software or digital services. After purchase, a salesperson offers updates, additional functions to programs. In a store after purchase, a salesperson can offer, for example, extended support.
Successful upselling is based on understanding customers’ needs and making the shopping experience more enjoyable. Then customers will more often get offered products that are of interest to them, which is an opportunity to increase income by 20-30%.
Before purchase. You can use upselling as soon as a customer enters an online or offline store. In an online shop next to simple laptop models, display more expensive ones, add comparison tables and demonstrate the benefits of buying a more expensive option. In a physical store, salespeople take this responsibility. Here one should be cautious: not to impose too much, be delicate and want to help genuinely. It is important not only for upselling but for customer relations as well.
During purchase. In this case, cross-sell is more suitable but you can also apply upselling. Along with cases and mousepads, you can also show more expensive laptop models. Some customers have goods in the cart for several days, because they are thinking about purchasing and an offer of another model may change their decision.
After purchase. This type of upselling is more suitable for selling software or digital services. After purchase, a salesperson offers updates, additional functions to programs. In a store after purchase, a salesperson can offer, for example, extended support.
Successful upselling is based on understanding customers’ needs and making the shopping experience more enjoyable. Then customers will more often get offered products that are of interest to them, which is an opportunity to increase income by 20-30%.