Up-selling: The key to increased profits

Small business coach Hannah McNamara from SME Academy (http://www.smeacademy.co.uk) in London talks about ways that you can increase sales amongst your existing customers and clients.

Liked this video tip?

We publish tips like this on a regular basis, so make sure you’re on our mailing list and you’ll be told when we add new video tips and articles to the site. You are automatically added to our mailing list when you download a copy of our FREE e-book ‘10 Ways to Sabotage Your Own Business: Are you making these mistakes?’ Claim your copy now here.

Transcript

They say that it costs something like 10 times as much to sell to a new customer than to sell more to an existing customer. So why are so many people only focusing on new leads? Shouldn’t we be turning our attention to the best prospects of all – our customers?

When it comes to customers, when do you think is the right time to sell to them? When they’ve already got their wallets out! I’m serious. When they’re already in the frame of mind where they’re happy to buy from you, that’s the point at which you ask them to buy something else.

In the same way that when you buy a book from Amazon they’ll suggest some other books you might be interested in, you can suggest extra products and services to your customers.

In negotiations, this technique is referred to as ‘nibbling’. As soon as you’ve got their agreement on one thing, get their agreement on something else and then see how far you can go.

Of course this assumes that you’ve got something else to sell to your customers and when you do make them an offer, it does need to be relevant to what they’ve bought.

It happens in retail all the time, for example you buy a pair of shoes and the assistant will ask if you will need some polish or in-soles. You buy a new washing machine and you’re asked if you’d like to buy an extended warranty. There are some products and services which are clearly back-end products, in order words you’d only sell them once someone has bought something else from you, such as an extended warranty or a support contract or an advanced version of what you sell. This said, I do see some businesses trying to sell back-end products at the front end and it doesn’t always make sense.

So, think about the products and services you sell. Which are the front end products and which are the back-end products? Which items are usually bought together? Is there a pattern to how people buy from you?

Once you understand this, it becomes much easier to up-sell to your customers. Not just in person, but when you’re planning your marketing activities. Your website can suggest extra products when someone is in your shopping cart or say to them, I noticed you bought X – product Y goes very well with it, shall we add it to your order?

Ultimately, up-selling is the most profitable way to do business because the costs involved in marketing to existing customers decreases at the same time as their responsiveness goes up.

For more video tips and articles go to: www.smeacademy.co.uk

[END TRANSCRIPTION – 00:02:29]