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Running a successful small business requires enough cash flow to cover overhead while still making a healthy profit. While finding new customers is likely one of your top priorities, you may be missing out on a straightforward strategy — cross-selling and upselling to your current customers. Nurturing existing customers is the lowest-hanging fruit for any business, with the cost-to-acquire being low and the potential of increasing LTV (lifetime value) being high.
What are cross-selling and upselling?
While often used interchangeably, there is a difference between cross-selling and upselling. Upselling is when you offer a customer an upgrade to their current purchase, such as a better product or a higher-level service. Cross-selling involves selling something related to their new purchase, like a yoga mat to go with a monthly gym subscription or shampoo at the hair salon.
The key to cross-selling and upselling is knowing your customer and trying to solve their problems. If you seem to be pushing too hard for a sale, you might inadvertently scare potential customers away. For more information on how to better cross-sell or upsell, check out our tips below.
Focus on the buyer’s journey
The best way to understand your customers is to map out the buyer’s journey. Know how they learn about your company and why they choose you, as well as any roadblocks they face along the way. By understanding their motivations, you can identify potential opportunities for upselling or cross-selling that would apply to their particular stage in the buyer’s journey.
Most cross-selling or upselling opportunities happen either in the middle of the funnel or the bottom of the funnel, when customers are close to making their purchasing decision. Offering these options at the top of the funnel would be counterproductive and might actually deter the customer. It’s essential to understand the buyer’s journey to provide these opportunities at the right time.
Be helpful
Never put your desire for a sale above the needs of your customers. Your top priority should be to be helpful and solve your customers’ problems. When they are shopping in your store, wait until they start looking like they need someone and then approach them. Ask the customer how you can help them. When they present their problem, listen to it carefully and do everything you can to solve every aspect of the problem.
Be detail-oriented, friendly, light-hearted, and creative in problem-solving. Don't offer any product or service until that customer's problem is solved, or it will make you seem uncaring about the customer's needs and like their problems aren't heard.
Anticipate problems
After successfully fixing their problem and when rapport is high, it is an excellent time for upselling and cross-selling. Reiterate the problem that was just solved and practice predictive problem solving by offering the customer an additional service to help them solve a problem they haven't even identified yet.
Even if the customer isn’t ready to purchase right then, you will have planted the seed of what other offerings you have to help them.
Email marketing
Collect email addresses and phone numbers at the cash register and add customers to marketing email lists. With this information, you can keep customers informed about new offerings and keep your business top of mind. Don't pester customers with unwanted marketing emails every day, but do regularly send them coupons and sales information.
Use retargeting ads
One of the best ways to upsell or cross-sell to customers is through retargeting ads. Retargeting ads are digital ads that follow your customer around the Internet. Once they have been to your website, retargeting ads will redirect them back to you or remind them of the items they were considering purchasing. Retargeting has been successful for many businesses — one business even saw a 161% increase in conversions.
Bundle services
Bundle services into packages to make products or services more affordable and easier to try. If you have a product or service that you think is helpful but isn’t popular, bundle it with one of your best sellers and see if it gains traction. This strategy can also help you know if this offering is helpful to your customers and business.
Moving forward
Selling is an art and a science. The skills needed for upselling and cross-selling aren't much different than the skills required to make any sale. When customers feel helped, listened to, and fulfilled, they'll feel smart and lucky to be buying what you're upselling and cross-selling to them. Keep sales about the customers and their needs, and you will boost your profits every time.
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BBB of Southern Piedmont and Western N.C. contributed this article.