In this eBook, we discuss two strategies that can help you improve profit margins and increase sales across your product range.
This is an excerpt from our most recent eBook: How to make the most of cross-selling and upselling opportunities. To download the full eBook, click here.
It starts with understanding your customers’ buying habits. By understanding what your customers are buying – and more importantly what they are not – you will be able to spoon-feed opportunities to your sales team so they can identify where there is potential profit through effective cross-selling and upselling. Cross-selling and upselling are techniques that can have a positive impact on your bottom line. Unfortunately, people often confuse the two and fail to capitalize on opportunities.
Cross-selling is when your sales team makes additional solutions available to the customer, while upselling is converting an initial offer into a more profitable order by the way of additional units, or a premium version. Both techniques are effective ways of increasing revenue within your existing customer base.
The benefits of cross-selling and upselling
Cross-selling and upselling allows you to generate additional sales revenue by incentivizing existing customers to purchase more of what they need.
The benefits of cross-selling and upselling to your business are plentiful. They can include increasing the average transactional value, thus increasing average invoice value; introducing new products, increasing the range of products sold and increasing revenue per customer. Other benefits include:
- Low cost - You might assume that to increase sales revenue, you must increase your customer base, but that’s not the case. A cross-selling strategy focuses on increasing sales to existing customers, saving you the time and money involved with new customer acquisition. According to Forbes, “it’s a lot less expensive to keep current customers than to acquire new ones.”
- Better customer retention – Customers stay with you when they are happy. When they see value in what you offer them it builds trust and loyalty. Getting the most value out of a transaction with an existing customer not only makes you more money at the time of transaction, it also saves you money by maximizing an existing customer relationship.
- Immediate sales – A cross-sell opportunity is identified during a transaction, and if successful, becomes part of that transaction. In other words, it’s an immediate increase in revenue during a single sales cycle.
Despite the clear benefits, not many businesses make cross-selling a routine practice. As a rule, a cross-sell offer should tie in with relevant products and services, offer real value, and is simple and direct.
This was an excerpt from our most recent eBook about cross-selling and upselling. To learn more about the steps to successful cross-selling and upselling, as well as how to identify bulk discount opportunities, click here, or on the button below.