Experts' CornerNews and Events

Increase Bottom Line Profits by Cross-selling and Upselling

Salespeople are trained to assist customers and direct them to the products they come to the store to buy. However, even the best employees miss sales opportunities by failing to introduce customers to new products they may prefer or that would be helpful for a project. Whereas Amazon and other giant e-commerce operations are adept at Upselling and Cross-selling, owners of physical stores may not practice these profit-generating sales tactics. 

Research indicates that companies gain 77 percent of sales from existing customers who are encouraged to buy additional merchandise that meets their personalized needs or more expensive products they had not previously considered. Additionally, shoppers who already patronize an establishment are 60 percent to 70 percent more likely to purchase. The odds of selling to a new customer range from 5 percent to 20 percent.

The Value of Cross-selling and Upselling 
Online retailers are persuasive at convincing shoppers to make unplanned purchases. Imagine someone who goes online to buy a bread maker, but before they check out, suggested products related to their selection scroll across the screen. These could be bread mixes, mixing bowls, cooking utensils, or cookbooksCross-selling offers customers add-ons to the merchandise they purchase and extends the product’s capability.

In a physical hardware store, the salesperson suggests additional products customers will need for the project. For example, if someone plans to paint, they may also need rollers, brushes, tape, tarps, or cleaning solvents. Although painting is a common project, shoppers appreciate the assistance of a knowledgeable salesperson who can offer helpful advice. 

There are instances when shoppers intend to buy a specific product and then decide it’s wiser to buy a more expensive version with similar qualities. Smartphone manufacturers constantly upsell consumers by introducing more costly versions with enhanced features. Extended warranties on big-ticket items are another example of upselling. Sometimes, the long-term warranty cost may be more expensive than the product it covers. However, the customer is reassured that the merchandise will be promptly repaired if anything goes wrong, and the store generates higher sales.

Techniques for Cross-selling and Upselling
There are techniques independent retailers can implement with their teams to help them feel more confident about upselling and cross-selling. The number one rule is to ask questions to understand what customers want and need regarding products and assistance. Knowing about the projects they’re working on will help the salesperson anticipate which items will be most helpful in completing the job.

It’s essential to select products that offer both the customer and your business the best value. Shoppers trust you to provide them with options that solve their problems or enhance their lifestyles. Hardware stores have a reputation for providing excellent service and knowledgeable advice. Customers who plan to paint are usually unfamiliar with selecting the paint for specific rooms or wall conditions. They have questions about the project’s finishes, rollers, and brushes or need to realize what additional paint sundries they require. The average person comes in and asks for one or two gallons of paint in a particular color. A brief conversation can help them leave with everything they need to solve potential problems and avoid making an unnecessary trip back to the store. 

Customers who have a positive experience based on your suggested products will share their experience with family and friends, bringing the store more referrals and business. It can take time for your salespeople to get a knack for upselling and cross-selling since they may think it is being “pushy,” but if they feel their approach is a service customers will appreciate, they will be more effective selling.

Changing behavior takes time. However, consistently practicing upselling and cross-selling techniques will improve the bottom line and keep customers happy.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.