Upselling is a commercial technique or strategy that basically consists in offering a customer a product with better features than the one which he/she is considering purchasing. The goal, as in other techniques such as cross-selling, is better sales.
Upselling has been traditionally associated with selling a more expensive product than the one the customer originally intended to by, but this is not necessarily the case. Having a higher price is not the only way in which an item makes profits for a business. The final goal of this technique is to sell what is most profitable for the business, whether it’s more expensive or not.
Upselling: Increasing Profits
This is a strategy that is often used together with the typical “appealing bargains”. Shops often draw us in by means of spectacular product offers at very good prices, whose stock is generally low. Thus this is a way to attract visits (regardless of whether it’s an online business), in the hopes of “offering you a very similar product, slightly more expensive, which is just the same as what you are looking for”.
An essential point when planning an upselling strategy is not forcing customers to buy something that is convenient for you, the seller. A shopper should not leave with a product (or make an online purchase) and then have the feeling that he/she has been fooled. In this case, the purchase will almost certainly be returned, and it’s very likely that the customer not only will never return to your store, but he/she will also recommend his/her contacts not to visit you. Thus you should bear in mind that a strategy that’s too aggressive and even dishonest will not only lose you a customer, but also result in bad references. We already know that winning customers’ trust is very difficult (and earning a bad reputation is very easy). This is very important, but it’s even more important in e-commerce.
When upselling is properly executed, the result is a sale in which the customer is offered something that really adds value and falls within the customer’s possibilities and the use that will be given to the product. If you listen to the customer and meet his/her needs, you can recommend something that benefits both parties. For shoppers, mainly because it meets their expectations, and, even if they have paid a bit more, they know that they have got a better item. For the store, because it is selling something that is more profitable for them.
An example of upselling of items similar to those examined by the customer
In e-commerce, this technique can be applied with very good results. As we were saying, it’s as common as cross-sales, and they are usually combined to offer more and better product recommendations to users, and to help them to discover better purchase options.
This is the video of an interview with Tony Gattari about upselling and cross-selling. I hope that it will help you to better understand the concept of upselling and its benefits for a business.