A waiter at a restaurant suggests his customers order a pitcher of lemonade instead of individual glasses. A bookstore manager recommends a sequel title when a shopper purchases a popular novel. An airline agent offers an upgrade from coach to first class for a fraction of the usual cost. These are all real-world examples of upselling.
The importance of integrating upselling opportunities at every transaction is well known among small business owners. If you can get your customers to purchase a larger size of French fries every time they place an order, then every order becomes an opportunity to increase your revenue. Those little increases can result in a huge difference to your bottom line. And your customers reap benefits, as well, because the upsell enables them to receive a cheaper cost-per-volume.
Upselling is not to be confused with cross-selling. Though cross-selling is also effective, it is not the same and often proves to be slightly more challenging. You can differentiate the two by remembering that upselling refers to increasing the size, volume, or quantity of the product or service the customer already wants to buy. For example, when a customer orders a cup of soup, their waiter mentions that a bowl of the same soup, which is double that of a cup, only increases the price by a third, making it a good deal for the customer. Contrastingly, an example of cross-selling would be if a waiter suggested their customer also order a salad to go with their cup of soup.
Focusing your sales staff on upselling, rather than cross-selling, tends to yield more successful results because when you alert customers to the opportunity to get more bang for their buck on items they know they want, they're likely to act on the deal. No one in their right mind is going to turn down a second free bar of soap or protein shake or lipgloss if a 2-for-1 sale is presented to them. A customer will, however, say "no thanks" if a second item, that they have no interest in, is offered at a discount, meaning that if they weren't planning on buying a protein shake in the first place, then why would they buy it at half off just because they're already purchasing a protein bar?
This isn't to suggest that there's no benefit to cross-selling. In the future, the FTx blog might dedicate a whole article to that topic. But for today, we want to delve into the benefits and best practices of upselling at your retail store.
UPSELLING & YOUR POS
Chances are, no matter what specific retail industry your store belongs to, you have a digital point of sale system installed at your checkout registers. Even if you own a dine-in restaurant, you may have equipped your wait staff with handheld POS devices to take customer orders. If this is the case, then you have a leg up in terms of implementing upselling tactics at the point of sale. When your POS is digital, you can utilize add-on features that will prompt your sales staff with the exact pre-written scripts to read to your customers.
These upselling features can be easily programmed to pop-up on the employee-facing POS screen when certain eligible items have been selected. When a pop-up bubble appears, your employee will simply read the offer out loud to the customer and if the customer decides to act on the upsell, then your employee can easily make the adjustment right there in the POS.
FTx Uplift is an example of a straightforward upselling add-on feature that's fast and easy to program. Once you, as the retailer, know the ongoing deals you would like to offer, then simply type in the scripts that will pop-up, associating those pre-written scripts to their corresponding items. For example, you can program your POS to upsell a 50-cent donut whenever a customer orders a coffee. The upselling pop-up might look something like this:
The real power in upselling at the point of sale is that your sales staff will never miss an opportunity to alert customers to chances to increase their order for even more savings, because the software itself will make it impossible to miss out on deals and discounts. Though the customer's total order will go up in cost, so will the quantity, which means they'll save both time and money in the long run.
PRODUCT, PRICE, AND TIMING
If you're going to use a feature like FTx Uplift in your POS, then you're going to have to first figure out which products will be eligible, what those upgraded prices will be, and finally how to time the offer so that it's impossible to turn down. Your sales staff will also need to understand the particulars of this information if you want them to upsell while they're working on the sales floor independent of a POS device, though it would be worthwhile to equip them with FTx Handheld devices, which can be programmed with Uplift, as well.
Not every product you sell or service you provide will have an associated upsell offer, and that's okay. Since you want to make the most out of upselling and you want to upsell with success, concentrate on your best-sellers, popular products, and personalized customer favorites--a POS that records customer purchase histories or a customer loyalty rewards program can greatly help with tailoring upselling opportunities to personalized customer favorites!
Once you have your list of products and services, you'll need to set the upsell price, and doing so is easier said than done. You aren't going to get away with offering a blanket 2-for-1 deal across the board, especially if you own an electronics store, for example. Instead, when the upsell involves an increased quantity, focus on discounting a percentage off the second--or third, or fourth--quantity. A good rule of thumb that marketing guru Neil Patel suggests is setting the upsell offer at no more than half the cost of the original purchase. As a savvy business owner, you'll have to work the math out and make sure the upsell is win-win, but see how close to 50% of the cost of the original purchase you can get. For instance, if a customer is already spending $35 on organic non-GMO dog food for the month, they'll likely jump at the chance to buy a second large bag of the same dog food for $17.50, especially if it will save them a trip at the pet supply store next month.
Lastly, you'll have to consider the particular timing of each product upsell that you've decided to offer. This can take some finessing and you may have to play around with the precise timing in order to find the sweet spot, but it will be worth it. For example, if a party of five has just approached the hostess stand at your restaurant, this is not the right moment to mention that there is a 2-for-1 dessert special happening. Likewise, if a customer knows exactly which laptop they want to check out at your computer & electronics store, trying to immediately upsell them to a different computer isn't going to go over very well. Upsell timing is especially critical on e-commerce sites, too, where shopping cart abandonment rates can be high if the website interface isn't streamlined.
OFFER PERSONALIZED PRODUCT RECOMMENDATIONS
Analyzing and using customer data to tailor personalized recommendations to your shoppers has never been easier than now in the age of digital commerce. Whether customers are shopping in-store using a digital POS at the counter or shopping from home on their computers, your systems can accrue an incredible amount of information about each individual shopper. When customer analytics are then leveraged to aim personalized promotional campaigns at targeted customer segments, the average business revenue increases by 10% - 30%, according to Forrester Research Analysis.
The upselling tactic we're about to recommend edges into the territory of cross-selling, but if done correctly, your customers will not only appreciate it, they'll act on the offers, too. Because your digital POS, and also your e-commerce site, is capable of recording customer purchase histories, you can program specific triggers for customer-preferred items and favored products and services. For example, let's say a particular shopper has bought a specific brand of chewing gum multiple times, which is recorded in her purchase history. You can enter in a pop-up upsell script if that customer hasn't bought gum in a few weeks. When she is at the register and once again has not included her favorite gum in her order, the POS will prompt the sales clerk to mention that if she buys a pack of her preferred gum today, it will be at a discount.
When you integrate a customer loyalty rewards program into your POS, there's really no limit to what you can do in terms of upselling. FTx offers Loyalty, a rewards program that is designed to help retailers personalize every sales promotion for the highest success rate. Loyalty programs are a great tool for increasing customer satisfaction and retention. A good loyalty program not only rewards customers for their purchases, but effectively entices them to spend more because they feel they are saving more, which is the essence of upselling. When retailers integrate upselling strategies into their rewards program in addition to equipping their sales staff to mention deals and discounts at the POS, then customer satisfaction, as well as business revenue, shoots through the roof.
UPSELLING PRACTICAL TIPS & STRATEGIES TO HELP YOU SELL MORE
- • Include upselling as part of your customer support services
- • Use upselling during customer service interactions to boost satisfaction
- • Integrate automated upselling into your loyalty rewards program
As we wrap up this article, we hope you're convinced of the importance of implementing a strong upselling strategy as part of your sales efforts. FTx POS includes Uplift, a user-friendly and highly effective upselling feature that will empower your staff to make the most out of every customer interaction. Our solutions also include Handheld, Loyalty, Digital Signage, and so much more, so check us out at FTx Total Enterprise Solutions!