Does your home service business feel like it’s always in survival mode? Are you tired of feeling like you’re just getting by? Or, is your business doing pretty well, but your progress has gone stagnant?
These are normal, and totally common issues for any business owner. To increase sales again, you’re going to have to do something you haven’t done before. What got you where you are won’t get you where you want to go.
It’s time to upsell.
Upselling is just one of the many sales tactics you can use to instantly boost revenue in your business. When done confidently, you will see a significant increase in sales and profit.
So, what is upselling? And how exactly can you use upselling techniques to boost your business? Keep on reading to find out!
What does Upselling Mean?
Upselling generally refers to the practice of encouraging a customer to purchase a more expensive or upgraded version of a product or service than they were originally intending.
For example, in retail when you buy a new car, the salesperson may try to upsell you to a fancier model. Then in the Business Office, they’ll look to cross-sell you the extended warranty, rust-proofing, and additional insurance.
In the residential home service industry, upselling might take the form of convincing a customer to upgrade their system from a 14 SEER, single stage motor to a 19 SEER variable, and then you may look to cross-sell a duct cleaning, AeroSeal®, and surge protector into the complete package.
Upselling is an effective way to increase revenue and boost profits, but it’s important to do it in a way that is not perceived as pushy or salesy.
The goal of upselling is to increase revenue for the business by selling higher-priced items or services. With proper execution, it can also lead to happier customers who feel like they’re getting more value for their money.
Interested in upselling, but don’t know where to begin?
At Wizard of Sales®, we have a team of experts who can help you create an upsell strategy tailored to your business. We’ll work with you to identify opportunities and develop a plan to increase sales and grow your business.
Book a demo with us today to learn more about our services.
10 Most Effective Upselling Strategies and Techniques
As for any type of sales tactic, upselling has various alternative strategies and techniques that can be used to achieve the results you want. But not every technique will work for every business or every customer. You’ll have to tailor your approach depending on what you’re selling, who your customer is, and what they need.
That being said, here are ten of the most effective eCommerce and brick-and-mortar upsell techniques and strategies that you can use for your business.
Understand Your Customers
This may seem like a no-brainer, but many businesses fool themselves into thinking they understand their customers when they really don’t.
Take the time to get to know your customers on a personal level and you’ll be better equipped to upsell them effectively. Find out what motivates them, what their pain points are, and what they hope to achieve by doing business with you.
Here are some upsell examples to paint a better picture:
Say you’re an HVAC company and you know that your customer is motivated by saving money, you could upsell them on a more energy-efficient unit that will ultimately save them money on their utility bills.
On the other hand, if you sell and install pools and you know that your customer’s motivation is to increase their home’s value, you could upsell them by adding features like a waterfall or lighting that will make their pool more valuable and appealing.
The key is to really understand what motivates your customers and then offer them products or services that will help them achieve their goals. By taking the time to understand your customers, you’ll be able to provide them with the best possible upselling experience.
Offer Substitutes to Products/Services
Another upselling strategy is to offer substitutes for products or services. This means finding a better or more expensive product that the customer may be interested in. It can also mean offering an upgraded version of the product or service the customer is already buying.
But how do you do this without coming off as pushy?
You can start by simply offering the substitute and giving the customer the option to choose it. If they’re interested, great! If not, no harm done.
You can also refer to the first strategy we mentioned and try to get to know your customers better so that you can make more personalized recommendations.
The goal is to give the customer more options, not to force them into something they don’t want or need.
Remember the Rule of 25
As a general rule, you should never upsell a customer by more than 25 percent. This means that if a customer is buying an air conditioning unit for $20,000, you shouldn’t try to sell them a $55,000 unit.
You could, however, upsell them on a $25,000 unit. This rule is effective because it allows you to offer your customers more expensive products without seeming like you’re trying to take advantage of them.
If you follow the Rule of 25, you will be able to upsell your customers without alienating them. People are only willing to spend so much money on a given purchase, and if you go too far over that amount they’ll simply walk away.
Of course, there are always exceptions to this rule depending on the customer’s circumstances, but in general, you should always stick to the 25 percent rule when upselling to avoid turning off potential buyers.
The Rule of 3
Another rule to live by when it comes to upselling customers is the rule of three. The rule of three is based on the scientific fact that people respond to patterns, and three seems to be the magic number.
Multiple studies have shown that when there are three price levels to choose from, people are more likely to purchase the middle option. So when using this technique, make sure that the middle option is the one you want customers to choose.
Typically, the middle option is the median price point, but it doesn’t have to be. The key is to ensure that all three options offer value and that the middle option is the optimal choice.
When using the rule of three upselling technique, it’s important to present the three options in a way that makes sense. For example, if you’re selling roofing, you should present three different types of roofing materials, each with its own set of benefits. Don’t try to upsell a customer on different shingles. Show them 3 different possabilities, and let them decide what works best for them.
Like most things in marketing and sales, consistency is key. If you’re not consistent with your upselling strategy, you won’t see consistent results either.
That’s why it’s important to have a plan and stick to it. Figure out what works and what doesn’t. Whatever seems to perform the best, keep doing it! Of course, that’s not to say that you shouldn’t be flexible. If something isn’t working, don’t be afraid to change it. Follow the data and you’ll be on the straight and narrow path to upselling mastery.
It can be tempting to give up on upselling if you don’t see results right away. But if you’re consistent, you’ll eventually start to see a difference in your bottom line.
Do Not Sell!
Wait a minute — are you saying not to sell when you’re upselling? Yes. Yes we did. And let us explain…
People don’t like to be sold to. When you try to sell someone on something, it puts them on the defensive and they’re immediately less likely to listen to what you have to say.
If you’re trying to sell a product, instead of selling, try simply giving your customer options and let them know that they can keep or eliminate any options they want. Tell them about the features and benefits of the more expensive model, but remember it’s the advantages that the features and benefits provide that the customer is going to create an emotional bond with.
If you’re selling a service, give your customer a taste of what they could experience when they upgrade to a better package. For example, if you’re a garage door company, offer to show them a digital visualization of what their home could look like with the new a new garage door.
The key is to give your customer enough information that they can make an informed decision. The goal is not to make a sale, but to facilitate a buy. That’s how you manifest a loyal customer for life.
Offer a Lower Price
This is a selling strategy known as dollarization. When you provide a more robust product you are actually offering a lower price on a purchase that costs more than it’s cheaper alternative.
For example, let’s say you sell a customer a new shingle roof for $12,000 and they will need to replace it on average every 10 years. That works out to $100 a month for the price of the roof. Alternatively, the customer can buy a $30,000 metal roof that lasts 50 years (non-prorated). This roof costs the customer less ($50 a month) to own, while having a larger upfront investment.
For those looking for a premium look and feel, while having a lower cost of ownership in both time, money, and effort, the metal roof is a no brainer.
Personalize Your Upselling
Would you rather just feel like another number for a sales rep’s commission, or would you rather feel like you are getting a product recommended to you by a close friend? If you’re like most people, you would prefer the latter.
This is why personalizing your upselling strategy can be so effective. By taking the time to get to know your customers on a more personal level, you can make recommendations for products and services that they are more likely to be interested in.
Accenture’s latest research has shown that 75 percent of consumers are more likely to buy if the seller:
- Addresses them by their name.
- Knows their purchase history.
- Recommends purchases based on said history.
This not only increases the chances of them making a purchase, but also makes them more likely to come back in the future and recommend your business to others.
Look for Signs
It’s important to pay close attention to your customers before you upsell them on anything. By looking for signs of customer happiness and satisfaction, you’ll be able to gauge whether or not they’re likely to be receptive to an upsell.
If they’re already happy with what they’ve purchased, they’re much more likely to be interested in upgrading to a better version or buying additional products/services. On the other hand, if they seem unhappy, unsatisfied, or simply apathetic, it’s probably best to hold off on trying to upsell them.
A lot of damage can be done by upselling to a disinterested customer – they may feel like they’re being pressured into buying something they don’t want or need, and this could damage your relationship with them. It’s always best to err on the side of caution and only upsell to customers who you’re confident will be interested.
Use Social Proof to Persuade People
Social proof refers to the psychological phenomenon where people conform to the actions of others to feel like they belong. This often manifests itself in people buying products because their friends or family have also bought them.
In the home service industry, social proof can be used by creating a word-of-mouth marketing campaign. This can be done by giving existing customers a discount or freebie for referring new customers. You can also create social media posts or even videos featuring satisfied customers.
When potential customers see that others are happy with your services, they’ll be more likely to use your company themselves. And, once they’ve had a positive experience, they’re likely to refer you to their own friends and family.
Is it Ethical to Upsell?
Some may view upselling as an ethical dilemma, while others believe that it is a perfectly acceptable business practice. It all depends on how you go about it. If you’re upselling in a way that is helpful and informative, then there’s no problem. However, if you’re being pushy or deceitful, then it is unethical.
The best way to avoid any ethical issues is to be upfront and honest with your customers. Let them know what they’re getting into before they make a purchase. Be clear about the benefits of upgrading, and be sure to offer a fair price. As long as you’re not trying to take advantage of anyone, upselling can be a great way to boost your sales and earn more repeat business.
Upsell Well and You’ll Excel
The last thing any business owner with an ounce of empathy wants is their customer to feel like they are doing business with a greedy money goblin looking to take advantage of their next victim.
With this article, you have the proper tools and techniques to upsell confidently without coming off as the bad guy, but rather as an authentic and reliable friend looking out for the customer’s best interests.
After all, isn’t that what it’s all about?
At Wizard of Sales®, we specialize in helping businesses just like yours increase their upsell rates without sacrificing customer satisfaction. Book a demo with us today and let us show you how easy (and profitable) upselling can be!