Weekly Business Tip #3 from Snap Finance: Upselling, Your Key to Growth
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When customers walk into your store, they probably know what they want and how much they’re willing to spend. The internet has empowered consumers to easily compare products, read reviews, and even negotiate prices. According to a Pew survey, 65% of online shoppers would buy in-store if offered the best price.[i]
How can you boost sales in a highly competitive market? Start upselling!
Upselling is a sales strategy intended to increase revenue by helping customers obtain more benefits by selecting a higher-price product. For example, after talking with a customer looking for a single-size mattress, you find out that he lives in a 1-bedroom apartment, his current couch is small and worn-out, and he needs a mattress to accommodate his son a couple of nights a week. For a few hundred more dollars, you help him find a sofa-bed. You solved his need for an extra bed, replaced his old sofa, AND made a bigger sale.
Upselling requires a solid business structure and continuous improvement. Following these steps will help you succeed.
- Become an Expert in Your Field
While customers might have access to product information online, only you have qualified knowledge developed over years of experience working in the industry. Take advantage of it! Stay up to date with specialized product training from your vendors. Customers will feel more comfortable trusting in your expert suggestions, increasing your chances of larger purchases and higher revenues.
- Know Your Customers
Your clients' age, gender, ethnicity, education, health, marital status, employment, and income level can all give a clearer idea of their needs and expectations. A customer relationship management software, or CRM, can help collect data about them. Learn more about CRM systems in this Inc.com article. Social media is also a great and inexpensive resource. Use this information to deliver personalized offers with the products your customers need at the price ranges they’re expecting. According to Small Biz Trends, 62% of shoppers expect customized discounts or offers based on past purchases.[ii]
- Excel at Customer Service
Remember, you’re in the business of helping people find what they need. Make shopping as easy, accessible, and friendly as possible, from their interaction with the sales consultant to the paying process, and throughout the post-purchase service. Focus on improving their whole experience! This will help increase your chances of repeat business or bigger purchases. According to CEB Research, 94% of customers who had a smooth experience will buy again from the same company.[iii]
But be careful! Not every customer is an upselling prospect. Actively listening to your customer to find the answers to the following questions will help you detect a genuine opportunity.
- Is there a way to improve the current offer?
- Can the customer afford a more expensive offer?
- What specific benefits will he gain?
If the answer to the first two questions is yes and the benefits are clear for the customer, you’re on the right track. Here are some upselling techniques and examples to try in your store.
- The Rule of Three. This technique presents customers three available options upfront: the basic, the upgrade, and the dream. Start explaining the features of the dream product all the way to the basic. This is a practical way to address a customer when he has an open budget.
- The +25% Upgrade. After showing the customer the product he originally asked for, introduce him to an upgraded version. Experts suggest that this upgrade should not cost over 25% more than the original request. Let’s say he wants the basic 2-door fridge for $1,000. You offer him the next model for $1,225 that includes a water and ice dispenser.
- Reward Upgrades. Convince the customer by adding value such as free shipping, maintenance, or personalized features to a higher-price model.
- Take Away the Risk. Maybe customers need some time to try out the higher-end model. Offer a testing period, after which they can return the product if it doesn’t fit their expectations.
- Time-Sensitive Offers. Holiday sales can help bring in customers, and once they’re in the store, you can upsell a high-end model with a special discount. Only today: get the high-end model for the price of the midsize!
- Merchandising. Arrange your store floor so customers can see their options next to each other. This goes hand in hand with the Rule of Three. When customers can see the difference between products, it’s easier to convince them to spend a bit more for a higher value product.
COVID-19 might have changed in-store buying, but when making big purchases like appliances, mattresses, or furniture, customers still need to touch, see, and even try products in person to decide. In-store experiences have unique advantages over online shopping - personalized service and the opportunity to develop stronger customer relationships. Use them wisely!
[i] “Online shopping and purchasing preferences”, Pew Research Center.
[ii] “60 Retail Statistics to Help You Build Your Business in 2020” Small Biz Genius.
[iii] “5 reasons to put customers at the centre of your business”, Sales Force.
About The Author: Monica Tucker is Sr. Marketing Content Writer at Snap Finance.
About Snap: Specially designed for the furniture industry, Snap Finance helps credit-challenged customers get what they need with fast, flexible, lease-to-own financing. Through our free EDGE program, we boost your secondary financing business by up to 30%. Contact us at 866-871-0311 or visit snapfinance.com/partner to learn how Snap can help your business.
Weekly Business Tips from Snap Finance
Articles in Weekly Business Tips from Snap Finance