Tips for Upselling: A Lesson from McDonald’s
Upselling exists in many forms but the principle remains the same: offer customers the opportunity to purchase additional items to benefit, enhance, supplement or otherwise improve upon their current purchase or experience. Strategic entrepreneurs understand that customers are far more likely to increase their purchase while already in “buying mode.” These incremental gains can be key to generating profits.
The simple phrase heard at just about every McDonald’s—“Would you like fries with that?”—is an example of an upsell that has sold millions more fries each year. Other examples of upselling that can spark ideas for your business include:
- An incentive to purchase more product at a greater value (Note the miniscule price gap between the medium and large popcorn next time you go to the movie theater, or the free coffee refills you get when you buy a special cup at a coffee shop or convenience store.)
- A complimentary accessory to the main purchase (When you bought your last smartphone did you also by a case, screen protector and car charger?)
- Peace of mind to protect the customer’s investment (These include waterproofing spray for expensive boots and service plans for expensive electronics.)
- The promise of improving the chance for a successful outcome or result (Tele-coaching for an information product or access to a special “members’ area” which provides advanced tools and training for a software product.)
- Convenience products strategically placed for impulse buys. (The batteries at the electronics store, socks at the shoe store, small snacks or magazines at the grocery store, etc.)
Sometimes called “Point of Sale” (POS) Promotion or impulse buying, there could be great value in making small ticket items available right at the point of purchase, be it online or in a brick and mortar store. Unlike other upselling techniques, Point of Sale Promotion has more to do with the placement of the item than the action of the salesperson. As an online retailer, you can place links to small ticket items right on your check out page, with the same effect as the “impulse rack” at your local drug store.
For the other techniques of upselling, however, sales skills (whether online or in person) becomes more important. Effective upselling involves careful timing, keen observation and a great deal of restraint and resilience. Take these tips into account next time you are upselling a customer.
1. Wait for it
Wait until your customer has decided to purchase, then offer additional products. If you try to upsell an item before you close on the original item, you may scare off your customer.
2. Get information
If a customer is unsure of what they are looking for, take the opportunity to investigate the real benefit they’re after. Once you discover the desired benefit, be sure to offer them additional products and services they might not have thought of on their own, but that directly meet the needs or wants the customer is looking to fulfill.
3. Be reasonable
Consider your customer’s budget when making an upsell. As a general rule, upsold products should not increase the purchase total by more than 25 percent. Beyond that, the additional product may start to seem like a second major purchase instead of a supplement to the first.
4. Always add value
Perhaps most importantly: Don’t just upsell for the sake of profit or getting rid of unwanted inventory. Customers will see right through this tactic. For each upsell, have your selling points prepared. Get to know which products go well together and make a point to match well-suited items when upselling. If you can identify the perceived value in the upsell, your customers will be more likely to see it too.
Upselling is a great practice for any business. By developing complimentary products and designing your sales process with the upsell in mind, you can create an environment where additional profits can be made. When in doubt, remember the McDonald’s model: from Super-Size to cherry pies, there is potential for an upsell with every product.
What upselling techniques have you found success with for your company? Please leave a comment below.
OPEN Cardmember Charles Gaudet is a provocative marketing expert providing business and marketing strategies for entrepreneurs and small business owners wanting to out-think, out-market and out-earn their competition. He can be found at PredictableProfits.com.
Image credit: NÃ¤ystin via flickr