There are two main ways to drive sales.
1. Through the acquiring of new customers.
2. Or through up-selling or cross-selling to existing customers.
It won't surprise you that this article takes you through the meaning of upselling and cross selling, but it might come as a surprise to know that the majority of shop owners today concentrate most of their efforts on finding ways to acquire new customers rather than coming up with ways to squeeze more sales out of their existing ones.
So to help shop owners increase sales value during the check out process, I have listed some of the best upselling techniques and cross selling tips that won't cost you a penny.
But, before we dive in, let's first break down the meaning of upselling and cross selling.
What is upselling and cross selling?
Cross selling means recommending a product relevant to the one that’s already being purchased. An example would be recommending a tie with the purchase of a suit.
The meaning of upselling, on the other hand, means offering a pricier version of the item. Think of it as asking the shopper if they want to upgrade their purchase.
If executed correct, both techniques enable you to increase sales, and therefore, increase your revenue.
Now, let's get into the nitty-gritty details of the steps towards greater revenue success.
Upselling techniques in retail.
1. Review your business before you start with these sales techniques.
Take a look at your average transaction value (ATV), to get an idea of the average amount that your customers spend per transaction at your store. Once you know your ATV, you can begin to set realistic upselling or cross selling sales goals for your team. This information is crucial in finding your customers total purchasing power sweet spot.
It's worth mentioning that it is easier to upsell than to cross-sell. For upselling, a customer is already on the lookout for a particular product, so it's easier to persuade this customer to opt for an 'upgraded' version of the original product. Harder is incentivising the customer to make an additional purchase, of a different product, alongside the original buy.
2. Find the right time to upsell and cross sell.
The key to upselling or cross selling success is all about the right type of delivery, at the right time, at the right place. Upselling an irrelevant product to the customer or selling in a way that comes across as pushy leads to not only failure, but you might also actually lose the original sale.
3. Use the rule of 3.
Just as you don’t want to let your customers walk out of your store with a single-item purchase, you also don’t want to overwhelm them with options when making your cross-selling or upselling pitch.
This is where the “Rule of 3” comes in.
The “Rule of 3” is the practice of showing customers three items during the upselling stage:
The one they asked for, which is your “baseline” item
An alternative version of the item that’s a little pricier
And, finally, a “dream” version of the item that’s likely out of your customers’ budget.
Here, your objective is to get the customer to pick the highest-priced item, though the mid-range option would also be an upsell compared to the item the customers originally requested.
4. Make customers see the benefit that they’re getting.
Persuading someone to pay more for 'a better product' or to buy an additional item will benefit you, but the deal must also be beneficial to the existing customer.
Upsells and cross sells only work when they’re relevant to the original purchase. When you’re upselling or cross selling an item, make sure it’s;
a) a better version of what they’re buying or
b) a product that goes with their purchase.
Listing out features or specs is rarely a dealbreaker in sales. This is because the human mind is more responsive toward stories or images. To effectively up-sell or cross-sell something, you need to make people see the value or benefit of the purchase.
If you’re a brick and mortar clothing store, and you like to cross-sell an item with a purchase that your customer is buying, a good idea could be to show them additional items that would truly complete the outfit.
5. Don’t oversell!
As effective as upselling and cross selling are in generating higher revenue from the customers who are already in your store, there will be instances where it’s inappropriate to try either.
If a customer makes it clear to you that he or she is on a budget and cannot afford additional buys or a pricier version of the requested item, the best thing to do is respect your customer’s wishes and refrain from insisting.
When cross-selling, remember to refer back to your store's ATV. The items you suggest should be cheaper than the original item.
Dor, a company that specializes in providing retail traffic counting solutions recommends that an item should not exceed the price of the original item by more than 25%. That means if a customer comes into your store looking for a $50 pair of sneakers, the price of your up-sell sneakers shouldn’t exceed $62.50 (since 50 x 0.25 = 12.5 and 50 + 12.5 = 62.50).
Upselling tips, ideas and examples.
1. Reward customers for the added purchase.
Giving away a reward or incentive can increase your upsell and cross sell conversion rate. Consider what many eCommerce sites are doing. To encourage people to buy more, they often throw in free shipping if the shopper spends above a particular amount.
If you’re a brick-and-mortar store or if you’re not keen on giving away discounts when you upsell, perhaps you can incentivise shoppers with a free gift instead.
2. Pair your items.
Complementary items should be kept near each other. It's easier to cross-sell to customers from a display when they can clearly see how the pairings work together. If you have to walk across the store to find a blazer to match a tie, you'll likely miss out on an up-sell along the way.
3. Use the POS area to your advantage
Easily forgotten, afterthought items make great opportunities for cross-selling, so why not place these items close to your point of sale (POS) system? Just look at how effective it is at supermarkets, where impulse purchases happen with almost every checkout.
Whether you’re a large shop or a small store, test small items with low-profit margins as your POS merchandise. Monitor which products sell best over a period of time and then refine your product selection to ensure that customers are offered effectively items that draw their attention.
4. Know your pairings.
Before opening your store, you and your sales staff need to have a great understanding of your selection of complementary, additional, pair-able products.
Examples of upselling could include shoes and handbags, ties and blazers, watches and cufflinks, and more. When somebody makes a purchase from one category, you should already be thinking about cross selling all the complementary categories for that item. If you are the shop owner, you can create dream scenarios and have your employees suggest their pairing of products. Do make sure they explain their thoughts behind their decisions though so it does not come off as random hard selling.
Final words on upselling and cross selling.
Why implement an upselling strategy?
A customer who says Yes to buying your product is already willing to spend money at your store, so why not fully utilise the situation?
If done right, the two sales techniques offer complementary products that naturally completes the shopping journey. The customer should leave your store feeling like they got everything they need, not just what they asked for. Which results in greater customer loyalty and increased customer satisfaction. However, if your store is constantly faced with being unable to offer customers what they want, eg. fabric colour change or something different on the garment design, I truly recommend you to check out RJ MTM.
Their goal is to switch from pushing set styles and fixed sizes to customers, to customers having control over exactly what they buy from your store.
With RJ MTM's simple to use in-store and on-the-go system, clothing shop owners and their sales staff can easily offer customers the option to adjust garment designs, colours, fabric weights, sizing and much more.
So, interested in doubling or tripling your monthly gross revenue? Then now is the time to start teaching your salespeople these upselling and cross selling tips and techniques. You will be amazed at the direct and immediate affect this will have on your brand's bottom line.
Cheers,
READ MORE
Comentarios