Cross Selling: Increase Your Average Purchase
Do you want to dramatically increase your profits? Would you like an actionable, easy, effortless business growth strategy that is no-cost? Then this article on cross-selling is perfect for you. In fact, you will be able to apply this strategy in your business right way.
Let’s first be clear about the strategy I will share, which is cross selling. What is cross selling? Cross-selling is a way to get a customer to invest more money than the original purchase they were making by offering them an additional product/products or service/services that are related to what they are purchasing. Let me give you a few of my cross selling examples to have you begin to open your mind to what is possible in your business.
The one that comes to my mind first is McDonald’s where they have asked for years, “Do you want fries with that?”. That question is used to upsell you from your original order to an order that offers you a like-minded product and that increases the revenue and profit per order. Another example is from one of my client family members who provides coaching services to corporations and when a company is making a decision to invest in coaching for one leader, the coach asks, “Would you like to also have one of your team members coached?”.
Think about how many times in your life you have been asked if you wanted to add something to your purchase and have said, “yes”. Maybe with an extended warranty for your car or for a wax with a car wash.
Most of us say “yes” pretty quick to cross sell offers at the time of purchase because we are in buying mode and agreeable. If the cross sell item goes with our original purchase about 30% of the people asked at the point of sale will agree to the cross-sell. That can add 30% or more profits to your business right away.
Another tactic, somewhat similar is upselling. Cross selling and upselling are both designed to give an incentive to a buyer at the point of sale and increase the average purchase. There is a difference between cross selling vs. upselling.
Upselling is like cross-selling and is used at the point of purchase. The difference here is that the upsell offers the buyer more of what they are purchasing and the cross-sell offers an additional product or service that goes with the original purchase.
Here are a few upsell examples. One is what recently happened to me when buying some leggings online. At check out, I was offered a second pair for half price. I had an incentive at the time of purchase to get a pair for half off and grabbed it. So, I was upsold from one pair to two pairs by use of an incentive offered at the point of sale.
Another example is from one of my client family members who is a health coach and was offering a 2-day coaching event and when people enrolled offered the enroll to come to a 4-day event instead for only 25% more investment. Half of the people she offered this to said, “yes” so she increased her sales.
How To Determine Cross Sell Or Upsell
I want to personalize and customize this information for you, just as I do for my client family members who I consult with. Take a moment and consider what else your buyers might need or want when they are purchasing from you.
If you are a spa and someone just had a facial are there products that will be good for them to use at home after their facial? If you are a salon and you have just colored someone’s hair are their products they can use to maintain their hair color? If you are a consultant is their a tool or assessment that would be helpful for your clients to access?
Instead of thinking about offering a discount on the primary product or service that you offer, these strategies actually get your customers to purchase additional products/services they normally would not have purchased at the point of the sale. The advice I want you to hear with this strategy is that you are not just offering something the customer doesn’t want or doesn’t need. You are helping them purchase something that will actually make sense with their original purchase.
Your goal with up-sell and cross-sell is to have your customer think about adding something to their original purchase that they would not normally have thought of purchasing. They are in a buying state and ready for more. I suggest to my client family members that they offer an incentive for the upsell or cross-sell to have even more customers say, “yes”.
Take a moment and think about your business. What can you provide at the point of purchase? Maybe you can offer a better deal if the customer purchases a greater quantity. Think of McDonald’s when they used to ask if we wanted to super-size our orders. I have a client family member who sells life coaching services in 3-month increments and at the time of purchase offers 6 months with the second set of 3 months discounted 20%. Over 50% of her new clients sign on for the 6 months and she has more cash in her hand and spends less time hunting for new clients with this strategy.
You can also think of offering a complimentary service or product instead of upselling a greater quantity of products/services. Where I get my haircut they always have a discount on some products if I buy them at the time I get my hair cut. Instead of me paying $75 for a haircut I usually spend $100 and I am certain the spa is making at least $5.00 more profit on me. Imagine if half their customers each day put an extra $5.00 profit in their pocket each day, every day.
Don’t forget to also consider what services/products you can offer that are related to your original product. Last week I brought my car in for an oil change. While I was there they asked if I wanted a discounted car wash. I said, “yes” and was happy to add that service on. They made money on a car wash that I would not have considered having.
Another way you can use the concept of upselling and cross-sell is to offer a higher priced and higher-level service or product. I am not telling you to sell anyone what they do not want or do not need. I am suggesting you really listen to their needs and see what will have them become a happier customer because you have more fully met their desires.
I had this experience recently. I was shopping with my nephew and he needed a new suit for work. He liked one suit and was considering buying it. The sales person asked what the suit was for and when he heard how important the event was that my nephew needed the suit for he suggested a better suit that would make a much better impression in front of the audience my nephew was speaking to. My nephew (who doesn’t like to spend money) understood the value of making a better impression and having a higher quality suit that fits better and agreed to purchase the more expensive suit. I might add, he was happy to do so!
Ideas And Actions
When I write articles or speak to audiences I do this to be helpful and not to be self-help that is forgotten and put on a bookshelf. I truly do care about business owners and want to help you have a more profitable and sustainable business. If you can not see how to apply the upselling and cross-selling in your business then you won’t be taking actions that will make you more revenue and profits.
So, let’s look at how to apply what I have taught in this article.
If you have a business that is a repeat business in nature like an accountant, massage therapist, coach, consultant, etc, then I want you to consider offering additional products/services at the point of purchase.
If you are a business that has infrequent or random repeat business like a doctor, realtor, attorney, etc, then I want you to offer a discount on a product/service that can be offered in addition to what the customer is purchasing.
If your business is a single purchase type of a business like a car dealer or home remodeler then think what can be added to the original purchase to satisfy the customer even more.
The possibilities are there if you are willing to look for them. In my experience, consulting with over 5,000 businesses of all types all over the world, every business can upsell and cross sell and achieve an immediate increase in profits.
Questions To Help You
Let me help you identify upsell and cross-sell opportunities for your business. I will give you some of the questions I use with my own client family members so you can see the logical choices of upselling and cross-selling in your business.
What product/service can you offer when someone is making an original purchase that is a higher level product or service?
What product/service can you offer when someone is making an original purchase that is a greater quantity of products/services?
What are the benefits of making these purchases for the customer?
Why do they need or want this additional investment?
What is the profitability of the original product/service that people buy from you?
What is the marginal profitability of the upsell/cross-sell?
What price will you offer the upsell for?
What price will you offer your cross sell for?
What are your out-of-pocket costs for providing the upsell/cross-sell?
What is the increased profit per transaction?
What percentage of people per month might say “yes” to the upsell/cross-sell?
What profit per month will you expect with the additional sales?
What profit per year will you expect with the additional sales?
What profit per year will you expect with the additional sales?
What price will you offer your upsell/cross sell?
Will you offer an additional bonus or incentive if they purchase more?
How might you eliminate risk when you make the upsell/cross sell offer?
How will you measure the response rate to your upsell/cross sell?
There is a massive impact on your business financially IF you actually implement these strategies. Both of these strategies cost you nothing to implement and give you a great financial return. All you need to do is to create and then implement the strategy.
Imagine that you apply upselling and cross selling to all the different products and services that you provide. The few hours you invest to create this strategy can have massive financial returns for your business.
Take a moment and think about your business and your current revenue and profits. What would it be worth to your business if 20% or so of your buyers over the past years you have been in business, at the time of their purchase, had said “yes” to your upsell/cross-sell offers? You would have higher revenue and profits with zero marketing costs.
Unless you implement this strategy and take action on it, you will not get measurable results and increases to your bottom line. Ideas are just ideas until and unless you decide to take action and implement them. For you to have success in your business and to increase your revenues and profits and get measurable results, you need to take action.
If you have questions or need any help implementing this strategy, I am here to help you. I provide a service that will help you learn strategies to grow your business, and income while having more freedom and more fun. I help you quickly clarify how to best implement strategies like this and tons of other no and no lost business growth strategies that are proven to work and I even guarantee results.
Are you serious and ready to go for it?
If so, I look forward to helping you.