How to upsell: 5 techniques for small businesses
- Upselling encourages customers to purchase upgrades or add-ons that make their chosen product or service more valuable
- Learning how to upsell customers can increase your average purchase value and improve your bottom line
- Offer limited-time discounts or rewards for a minimum purchase value to make your upsell offer feel more valuable
Customers might come to your business with an idea of what they want, but many are still open to suggestions. In a 2020 survey, 43% of consumers said they welcome in-store advertising that guides their browsing. To encourage them to make a purchase, you or your sales team can try upselling—a reliable technique that increases the value of your sales by encouraging customers to buy a more expensive item or service that satisfies their needs while improving your bottom line.
Learn everything you need to know about upselling, as well as five upselling techniques you can use to boost your sales before the checkout process.
What is upselling?
Upselling is when a salesperson encourages a customer to buy a more expensive version of a product or service. This sales technique motivates shoppers to spend more without necessarily buying additional products or services. Instead, you can upsell customers on upgrades (like choosing an iPhone 13 Pro over an iPhone 13) or purchase add-ons (like an extended warranty or alarm system for a new car) that improve their customer experience.
Upselling vs. cross-selling
Upselling is often confused with cross-selling, or selling related items to shoppers. While effective cross-selling ends with the purchase of at least two products or services—the one your customer intended to buy and a complementary one—successful upselling can end with a single purchase.
For example, encouraging a customer to buy fries along with their drink is cross-selling, and selling them a large drink instead of a small one is upselling.
Why is upselling useful for small businesses?
When customers visit your business, they may gravitate toward your most affordable options. For example, a trip to the shoe store might end in $5 sandals off the rack—that is, unless salespeople step in to upsell.
Upselling is a low-cost sales tactic that uses thoughtful recommendations to lead customers toward higher-price options. Upselling efforts can greatly increase your average purchase value, or the average dollar amount shoppers spend on each trip.
Learning how to upsell is also key to maximizing revenue from existing customers, who are 23% more likely to spend with you than new ones. Many businesses focus on gaining new customers through digital advertising—but if you’re competing with larger corporations, the advertising investment might become higher than expected. Aside from (or in conjunction with) advertising, small businesses can achieve a comparable level of growth by engaging current customers with upsell offers.
How to upsell: 5 upselling techniques
Whether you own a brick-and-mortar store or run an ecommerce site, learning how to upsell can help you maximize the amount that customers spend. These five upselling tips will help you to tap into your full sales potential and grow your small business.
1. Suggest relevant products or services
Upselling doesn’t have to be pushy to be effective. While aggressive salespeople have given the practice a bad name, suggesting upgrades and add-ons that genuinely support customer needs is the best way to upsell.
For example, a nail artist could suggest an upgrade to more durable, acrylic nails to clients who frequently chip their regular nail polish at work. For a client whose biggest concern is dry skin, a paraffin wax treatment add-on might be a better upsell.
When you personalize your suggestions, you can successfully upsell shoppers with a one-sentence suggestion or a pop-up after they add a product to their shopping carts.
2. Position your upsell as a special offer
If you want to make your upsell a little more exciting, consider positioning it as a limited-time offer. For example, if a client expresses interest in a twice-per-week personal training service, a trainer could offer a 20% discount to upgrade to three days per week on the spot.
Make sure to explain why your upsell offer can benefit your customer specifically. Turning your upsell into an offer creates a sense of urgency, which speeds up decision-making.
3. Offer rewards for higher purchase values
You can also consider offering rewards to customers who make large purchases. By giving the customer incentive to spend more, you make the upgrade feel more valuable.
For example, if customers typically spend $30 at a cosmetics store, the owner might offer high-end makeup samples with every purchase over $35. This entices shoppers to make small upgrades and add-ons to reach this minimum purchase value.
If you sell products through an ecommerce store, free shipping is one of the best rewards you can offer. In a 2019 survey, 84% of shoppers said they have added an item to their cart in order to meet a free shipping threshold.
Amazon models this upselling technique particularly well: In addition to offering higher-cost product recommendations on its product pages, the ecommerce giant offers free shipping for purchases over $25 to users who aren’t already Amazon Prime members.
4. Use social proof
Over 90% of consumers say they trust friends, families, and online reviewers more than advertising or other information from a brand. That’s the power of social proof—when customers take their cues from the actions of others, such as online reviewers or experts. To maximize your upsell opportunities, demonstrate social proof by showing that other customers choose and approve of the same upgrades and add-ons.
For instance, a software as a service (SaaS) brand could highlight a mid-level membership as the option preferred by most subscribers on its pricing page. Similarly, a jewelry store owner could state that a costlier, sterling silver ring is more popular than its silver-plated version.
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5. Create detailed comparisons
Consumers are unlikely to upgrade unless they have clear evidence that a more expensive option is worth the price. With a detailed and well-organized product or service comparison, you can highlight features that are only available with more expensive options.
Provide comparisons when shoppers are in the decision-making phase and still seeking information about their options. Place them right next to products in-store or directly on product pages on ecommerce sites.
Grow your revenue with effective upselling strategies
If you want to encourage customers to spend more money with each visit, learning how to upsell is a worthwhile strategy. Effective upselling gives clients more value from products or services they already need. As a result, they may be more willing to spend more than their original purchase price—especially if you pair upselling efforts with special deals or rewards.
Once you put these five upselling techniques into action, learn how to close a sale to ensure your customers follow through with their purchase.
The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.