Up-selling is a way for you to encourage your customers to buy additional items or spend more money on things they buy anyway — at the time of the original sale.
If you’ve been reading my past articles, you’ll see similarities to perpetual selling strategies and joint ventures — but up-selling is different.
There are four basic up-selling strategies.
The first is what we call packaging.
When you package things together that your customer would have to buy later, it’s more attractive. This is common at golf courses where green fees, cart rental and range balls are included at a discounted rate — some also offer a sandwich and drink included in the package. It can increase revenues significantly over letting golfers pick and choose the same items for retail.
The second strategy is offering compatible items at the point of sale.
This is an “add-on” to the sale and may represent a discount because it’s purchased early. When I bought my last car it did not include oil changes, tire rotation, replacing windshield wiper blades, checking fluid levels, battery acid and tire pressures — something I would have to do anyway.
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My dealer offered all those things every 5,000 miles for 50,000 miles or five years for an extra $500. All I had to do was make my appointment to drop off the car and all of it is done at no additional cost. Furthermore, every time I make a visit they ask me several questions that lead to additional up-selling opportunities. You also see this at many stores that sell electronic equipment — they offer an extended warranty at the point of sale.
The third strategy is selling bulk quantities at a discount.
Let’s say you sell trash compactors. You could offer one package of bags at the retail price of $8.99 or five packages at only $6.99 each. If your packages cost you $3, one bag is a profit of $5.99 while profit for five bags at the discounted price is a profit of almost $20.
The last strategy is offering a premium as an incentive.
An example for this is a relationship marketing opportunity that offers a starter package for $250 that gives three sample bottles of inventory — a $330 value. There are three additional packages — “Bronze” costs $500 and is an $825 value, “Silver” costs $1,000 and is a $1,980 value, and “Gold” costs $1,750 and is a $3,850 value. The volume of the samples only matters if the person understands how the product prospecting system works and wants to get more traction and get started in the business faster.
Each of the strategies is easily implemented by simply asking at the time of the sale. If only 50 percent of customers say yes, you make significantly more profit than if you don’t ask.