Up-selling
Encyclopedia
Upselling is a sales technique
whereby a seller induces the customer
to purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale. Upselling usually involves marketing more profitable services or product
s but can also be simply exposing the customer to other options that were perhaps not considered previously. Upselling implies selling something that is more profitable or otherwise preferable for the seller instead of, or in addition to, the original sale. A different technique is cross-selling
in which a seller tries to sell something else. A recent study concluded that it is 70% easier to get an additional 3% in sales from an existing customer than it is to get more customers in the door to equal the same dollar volume in sales.
In practice, large businesses usually combine upselling and cross-selling
techniques to enhance the value that the client or clients get from the organization in addition to maximizing the profit that the business gets from the client. In doing so, the organization must ensure that the relationship with the client is not disrupted. In a restaurant and other similar settings, upselling is commonplace and an accepted form of business. In other businesses, such as car sales, the customer’s perception of the attempted upsell can be viewed negatively and thereby affect the desired result.
A common technique for successful upsellers is becoming aware of a customer's background and budget, allowing the upsellers to understand better what that particular purchaser might need.
Another way of upselling is creating fear over the durability of the purchase, particularly effective on expensive items such as electronics, where an extended warranty
can offer peace of mind. Upselling also works with things like expensive leather shoes, where the seller suggests to buy the waterproofing
spray as well "to make the shoes last."
Selling technique
Selling technique is the body of methods used in the profession of sales, also often called personal selling.Techniques in use in selling interviews vary from the highly customer centric consultative selling to the heavily pressured "hard close"....
whereby a seller induces the customer
Customer
A customer is usually used to refer to a current or potential buyer or user of the products of an individual or organization, called the supplier, seller, or vendor. This is typically through purchasing or renting goods or services...
to purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale. Upselling usually involves marketing more profitable services or product
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
s but can also be simply exposing the customer to other options that were perhaps not considered previously. Upselling implies selling something that is more profitable or otherwise preferable for the seller instead of, or in addition to, the original sale. A different technique is cross-selling
Cross-selling
Cross-selling is the action or practice of selling among or between established clients, markets, traders, etc. or the action or practice of selling an additional product or service to an existing customer. This article deals exclusively with the latter meaning. In practice, businesses define...
in which a seller tries to sell something else. A recent study concluded that it is 70% easier to get an additional 3% in sales from an existing customer than it is to get more customers in the door to equal the same dollar volume in sales.
In practice, large businesses usually combine upselling and cross-selling
Cross-selling
Cross-selling is the action or practice of selling among or between established clients, markets, traders, etc. or the action or practice of selling an additional product or service to an existing customer. This article deals exclusively with the latter meaning. In practice, businesses define...
techniques to enhance the value that the client or clients get from the organization in addition to maximizing the profit that the business gets from the client. In doing so, the organization must ensure that the relationship with the client is not disrupted. In a restaurant and other similar settings, upselling is commonplace and an accepted form of business. In other businesses, such as car sales, the customer’s perception of the attempted upsell can be viewed negatively and thereby affect the desired result.
Examples
Some examples of upsales include:- suggesting a premium brandBrandThe American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
of alcoholAlcoholic beverageAn alcoholic beverage is a drink containing ethanol, commonly known as alcohol. Alcoholic beverages are divided into three general classes: beers, wines, and spirits. They are legally consumed in most countries, and over 100 countries have laws regulating their production, sale, and consumption...
when a brand is not specified by a customer (such as if a customer simply requests a "rumRumRum is a distilled alcoholic beverage made from sugarcane by-products such as molasses, or directly from sugarcane juice, by a process of fermentation and distillation. The distillate, a clear liquid, is then usually aged in oak barrels...
and CokeCoca-ColaCoca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke...
"). - selling an extended service contractExtended warrantyAn extended warranty, sometimes called a service agreement, a service contract, or a maintenance agreement, is a prolonged warranty offered to consumers. The extended warranty may be offered by the warranty administrator, the retailer or the manufacturer. Extended warranties cost extra and for a...
for an appliance - suggesting a customer purchase more RAMRam-Animals:*Ram, an uncastrated male sheep*Ram cichlid, a species of freshwater fish endemic to Colombia and Venezuela-Military:*Battering ram*Ramming, a military tactic in which one vehicle runs into another...
or a larger hard drive when servicing his or her computerComputerA computer is a programmable machine designed to sequentially and automatically carry out a sequence of arithmetic or logical operations. The particular sequence of operations can be changed readily, allowing the computer to solve more than one kind of problem... - selling luxury finishing on a vehicle
- suggesting a brand of watchWatchA watch is a small timepiece, typically worn either on the wrist or attached on a chain and carried in a pocket, with wristwatches being the most common type of watch used today. They evolved in the 17th century from spring powered clocks, which appeared in the 15th century. The first watches were...
that the customer hasn't previously heard of as an alternative to the one being considered. - suggesting a customer purchase a more extensive car wash package.
- Asking the customer to super size a meal or add cheese at a fast food restaurant.
Techniques
Many companies teach their employees to upsell products and services and offer incentives and bonuses to the most successful personnel. Care must be taken in this type environment to thoroughly train employees. A poorly trained employee can let slip the incentive program and thus offend a regular and loyal customer. There is a level of trust between the customer and employee and once broken it may never be reestablished.A common technique for successful upsellers is becoming aware of a customer's background and budget, allowing the upsellers to understand better what that particular purchaser might need.
Another way of upselling is creating fear over the durability of the purchase, particularly effective on expensive items such as electronics, where an extended warranty
Extended warranty
An extended warranty, sometimes called a service agreement, a service contract, or a maintenance agreement, is a prolonged warranty offered to consumers. The extended warranty may be offered by the warranty administrator, the retailer or the manufacturer. Extended warranties cost extra and for a...
can offer peace of mind. Upselling also works with things like expensive leather shoes, where the seller suggests to buy the waterproofing
Waterproofing
Waterproof or water-resistant describes objects relatively unaffected by water or resisting the ingress of water under specified conditions. Such items may be used in wet environments or under water to specified depths...
spray as well "to make the shoes last."
See also
- AIDAAIDA (marketing)AIDA is an acronym used in marketing that describes a common list of events that may be undergone when a person is selling a product or service. The term and approach are attributed to American advertising and sales pioneer, E. St. Elmo Lewis. In 1898 Lewis created his AIDA funnel model on...
- Bait and switchBait and switchBait-and-switch is a form of fraud, most commonly used in retail sales but also applicable to other contexts. First, customers are "baited" by advertising for a product or service at a low price; second, the customers discover that the advertised good is not available and are "switched" to a...
- Choice architectureChoice architectureChoice architecture describes the way in which decisions are influenced by how the choices are presented , and is a term used by Cass Sunstein and economist Richard Thaler in the 2008 book Nudge: Improving Decisions about Health, Wealth, and Happiness...
- Contract of saleContract of saleA contract of sale is a legal contract an exchange of goods, services or property to be exchanged from seller to buyer for an agreed upon value in money paid or the promise to pay same...
- Cross-sellingCross-sellingCross-selling is the action or practice of selling among or between established clients, markets, traders, etc. or the action or practice of selling an additional product or service to an existing customer. This article deals exclusively with the latter meaning. In practice, businesses define...
- List of marketing topics
- MarketingMarketingMarketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
- Permission marketingPermission marketingPermission marketing is a term popularized by Seth Godin used in marketing in general and e-marketing specifically. The undesirable opposite of permission marketing is interruption marketing. Marketers obtain permission before advancing to the next step in the purchasing process. For example, they...
- PromotionPromotion (marketing)Promotion is one of the four elements of marketing mix . It is the communication link between sellers and buyers for the purpose of influencing, informing, or persuading a potential buyer's purchasing decision....
- SalesSalesA sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....
- Selling techniqueSelling techniqueSelling technique is the body of methods used in the profession of sales, also often called personal selling.Techniques in use in selling interviews vary from the highly customer centric consultative selling to the heavily pressured "hard close"....
- Value added sellingValue added sellingValue added selling is one of several sales techniques that relies on building on the inherent value of a product or service. By its nature the value add technique is a more flexible and customized selling approach that requires input from a defined range of average customers...