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Do You Want Fries With That?

Today’s economy has left many business owners scrambling to find new and better ways to increase their profits without increasing their marketing budget. As consumers continue to tighten their spending, it is still possible to increase your sales revenue without spending more money on advertising. Marketing experts agree that cross-selling and upselling are two great methods to try for any business, large or small.

Cross-selling is the practice of promoting complimentary products or services in addition to the item being sold. Upselling is the practice of offering customers an upgraded or premium version of a product or service. Using these two techniques can provide more value to your customers while increasing your sales volume. It’s a win-win for you and your consumer.

Amazon.com was one of the first online retailers to implement consistent use of cross-selling. Each page listing on Amazon.com showcases similar products that consumers purchased together. Amazon.com literally tells their customers, “If you bought this product, you might also like products this and that.” Fast food giant McDonald’s is regarded among marketers as the perfector of the cross-sell and upsell. Asking “Would you like fries with that?” is a classic use of the cross-sell. Likewise, asking if you’d like to “super size” your Big Mac meal would be an upsell.

Marketing research shows that shoppers will buy impulse items at the point of purchase when presented with relevant options. Showcasing your related products will remind your customer of other things they were not looking for but still might need or want. Simply put, you should market those products that naturally go together. For instance, when purchasing a new camera, the customer often has a need for batteries or a camera bag. When purchasing a cell phone, consumers usually want a car charger or a sturdy case. Think about those products or services you already offer that may naturally flow together, and start from there.

However, when used incorrectly, cross-selling and upselling can hurt your business. Improper use will damage your credibility with your customer base. With that in mind, here are a few recommended tips for the effective use of cross-selling and upselling:

Always be relevant. Attempting to cross sell unrelated items is a no-no. Unrelated product suggestions are just not helpful for your customers. They can be distracting and could cause the customer to abandon the entire transaction. Keep your suggestions as relevant as possible. Likewise, resist the temptation to try and cross-sell too many products at one time. Badly paired items are nothing more than clutter.

Free Shipping. One of the most common upselling techniques is the offer of free shipping on a specified purchase amount. If a customer’s order totals $40 and shipping is free on orders over $50, they’ll have much more incentive to find an additional item to purchase to take advantage of your free shipping offer. But be careful; make sure that your bottom line isn’t injured in the free shipping. Only use this technique when it really equals an increased profit.

Timing is Critical. Where and when you offer corresponding products or a premium product is of great importance. Research shows that one of the best times to utilize the practice is just prior to checkout, either online or at the cash register. Electronics and appliance salesmen are pros at this when they offer you an extended warranty at checkout.

Don’t attempt to upsell too early in the transaction. Cross-sell when you know you’ve got a potentially committed customer. My best advice is to try out several different strategies and then implement what works best for your customer and your business niche.

Provide Visual Details. If you’re running a brick-and-mortar business, make sure to display your complementary items together. This lets the customer see a natural connection from the start of the sale. If you’re selling online, make sure to provide enough detail information for any of your add-on items such as price, brief description, and picture. Make sure the customer knows exactly what they’re getting with the cross-sell or upsell. If you don’t provide enough information, the customer may feel bothered or harassed, and simply abandon the entire sale altogether.

Bundle It Up. Bundling is a common way to entice your shoppers to buy not just a single item, but a whole set of complimentary items that can go together. Offering a price break on bundled items implies a sense of value to the consumer. Every penny counts to a value-conscious or frugal customer. Make them feel like they’re really getting a deal, and you’ll increase your bundled sales.

It’s All In the Wording. Use a personalized approach. Choose smart phrases such as “you might also like this” instead of the phrase “we recommend.” Keep it personal, and keep it friendly. Emotionally charged words like “need” or “want” are also very effective when offering upgrades and relevant products.

Urgent! Carefully creating a sense of urgency can be a great tactic for a seasoned salesman. You want the customer to feel a need to act quickly, without going so far as to make them feel boxed in. Providing limited, exact dates for an offer or using phrases such as “offer ends soon” are good practices. Amazon.com does a great job of this by listing product availability data. “Only 2 left in stock – order soon!”

A final word: Always put your customer first, no matter what strategy you employ. Always providing excellent customer service is the best way to encourage repeat sales. Cross selling and upselling will be much easier when your customers feel respected and valued.

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