Don't worry if you don't know what those terms mean. That's why I'm
here. And if you do know what they mean, I bet you're not using them all
in your business, so consider this ‘slapped wrists' time.
Up-selling, cross-selling, and bumping are all terms that describe different ways of extracting MORE money from a customer AFTER they've already committed to buy a basic item.
You see, it's important to understand that when people are in the mode of buying, they are highly open to suggestions to buy more! This is particularly the case when the offer is in some way related to the original purchase, AND even more so if the offer appears irresistible.
The best way of illustrating these marketing techniques for you is to refer you to McDonalds, the most ubiquitous fast food restaurant in the world. They've had plenty of time to perfect their sales process, and they sometimes manage to get all three techniques into a single transaction, which is very impressive.
Learning from ‘The Ronald'
So let's say you order a McDonalds meal. The aim of an upsell is to get you to expand your current purchase, to spend more money, so the server might suggest that you ‘upgrade' to the large size, ‘the biggie', or the ‘supersize,' for “just 50 cents more”. The upgrade fee seems small in comparison to the initial price, so it's a very persuasive offer. In other industries, anytime you're offered a choice of ‘bronze, silver, or gold' options, or any named packages, that's an upsell.
Starbucks has ‘Tall, Grande, and Venti' sizes of drinks. They've done a good job of positioning the ‘grande' as the ‘standard' option, which is actually an upsell from the ‘tall'.
A common trick with naming options is to refer to the lowest price package as ‘basic' or ‘standard'. In other words, very plain names. Then the upsell options are named much more exciting and appealing, such as ‘platinum' or ‘premium'. Few people want basic, we tend to want the best.
If the value proposition is a good one, then it's relatively easy to make a powerful case for an upsell. In other words, as a customer, if you see that you're getting twice the amount of ‘stuff' for just a 30% increase in price, then that's obviously a better deal.
Other examples of an upsell would be a faster computer than the one you initially selected, a gym membership with a personal trainer rather than just the ‘basic' plan which only includes the use of workout equipment. It could also be a cell phone plan with more minutes than you originally planned to buy.
Back to McDonalds. The employee then says to you, “would you like fries with that?” That's the cross-sell. By the way, when they ask me that, my natural instinct is to blurt out something like, “do I look like I have some disability that would prevent me from asking for fries if I wanted fries?” But I don't say that, I hold myself back…
So the question, ‘would you like fries with that' is a cross-sell. They're asking if we'd like to ADD another item to our purchase.
A cross-sell item is almost always at a lower price point than the original item, and that's deliberate. Why? The decision should seem easy.
Another example of a cross-sell is when someone offers you an extended warranty to go with a new household appliance. We've all been in an electronics store and been offered the opportunity to take advantage of ‘extended coverage or protection' at the time of purchase.
Amazon do a great job of the cross-sell. They always offer compatible items that other customers purchased. That's a cross-sell.
If the customer agrees to the cross-sell, the ‘bump' is where they're offered a special ‘upgrade' deal on what they've already committed to. For example, if a cross-sell is for an apple pie at McDonalds, the employee might offer ‘another dessert for just $1 more if you buy it now.' Or, ‘three apple pies for just $1 .50 more.'
Taking another example, if you had committed to, say a 2 year extended warranty on an electronics purchase, the bump would be to offer 5 years “for the price of the 3 year plan” or something similar.
The point is, a bump has to be perceived by the customer as an irresistible offer. They should reason to themselves, ‘I'd be a fool to pass this up.' In a way, it's the upsell to the cross-sell, if that makes sense.
Of all sales devices, the upsell is the most well known, but very few businesses employ it. The other two, the cross-sell and the ‘bump' rarely get a look in.
What about on eBay? Is it possible to utilize these clever techniques? The ‘other items from this seller' box that appears below many listings are really a cross-sell opportunity. The upsell can also be achieved by pointing out the benefits of a premium version. The bump is a little more difficult, but once the customer is yours, you can offer a special deal on future purchases. Hopefully the examples in this article will trigger some further thoughts for you.
Why employ these devices? Because they take very little effort, and they can substantially increase your profit. If a company offers a 1 dollar upsell and they get 120 customers a day to agree to it, that's an extra $31,200 a year! And what was the cost of offering the upsell? Zero. A few seconds of someone's time.
Coming back to the McDonalds example, ironically, despite the way their selling system has been tweaked and perfected over the years, it still falls down in one crucial (and basic) area in a BIG way.
Can you guess what it is?
One word. Employees. Even though they're trained to maximize every sale, the implementation is not consistent, as you've no doubt observed. You can't count on being asked EVERY time, can you? So the lesson there is, you can have the best sales system on the planet, but it's useless unless it's put into action consistently and reliably.
Another danger to be alert to is in overly pushy sales people. No one likes an obnoxious, forceful salesperson where you feel like you're having an arm twisted to ‘comply' with their wishes. Remember, in that kind of situation, the value of the offer should speak for itself. If you have to do a lot of selling then it's not a good enough offer.
Lastly, be sure that when an upsell is offered, that the customer has a great experience with your company. If the employee is half-hearted, just going through the motions, and seems as though they're simply reciting a script, then few customers will respond to that.
The secret key to using all of these techniques effectively is….
To assume.
What do I mean by that?
Assume that the customer will take advantage of your offer. Be confident. Try and convey that MOST customers take the upsell, cross-sell or bump. It's the normal course of action.
Present the offer in a low key, ‘by the way' type of fashion. Say something like, “I almost forgot to mention' so the customer feels like you're doing them a favor in getting a better deal for them.
By contrast, if you make it seem like a big decision, to be thought about carefully, guess what customers will tell you? They'll have doubts and won't respond positively to the offer.
I urge you to look at ways to implement these powerful selling options in your business. If necessary, phone your customers to offer them these options, or figure out a way to interrupt the usual sales process to make these important offers. And remember that lots of relatively small amounts DO add up, and they can be surprisingly profitable.
Up-selling, cross-selling, and bumping are all terms that describe different ways of extracting MORE money from a customer AFTER they've already committed to buy a basic item.
You see, it's important to understand that when people are in the mode of buying, they are highly open to suggestions to buy more! This is particularly the case when the offer is in some way related to the original purchase, AND even more so if the offer appears irresistible.
The best way of illustrating these marketing techniques for you is to refer you to McDonalds, the most ubiquitous fast food restaurant in the world. They've had plenty of time to perfect their sales process, and they sometimes manage to get all three techniques into a single transaction, which is very impressive.
Learning from ‘The Ronald'
So let's say you order a McDonalds meal. The aim of an upsell is to get you to expand your current purchase, to spend more money, so the server might suggest that you ‘upgrade' to the large size, ‘the biggie', or the ‘supersize,' for “just 50 cents more”. The upgrade fee seems small in comparison to the initial price, so it's a very persuasive offer. In other industries, anytime you're offered a choice of ‘bronze, silver, or gold' options, or any named packages, that's an upsell.
Starbucks has ‘Tall, Grande, and Venti' sizes of drinks. They've done a good job of positioning the ‘grande' as the ‘standard' option, which is actually an upsell from the ‘tall'.
A common trick with naming options is to refer to the lowest price package as ‘basic' or ‘standard'. In other words, very plain names. Then the upsell options are named much more exciting and appealing, such as ‘platinum' or ‘premium'. Few people want basic, we tend to want the best.
If the value proposition is a good one, then it's relatively easy to make a powerful case for an upsell. In other words, as a customer, if you see that you're getting twice the amount of ‘stuff' for just a 30% increase in price, then that's obviously a better deal.
Other examples of an upsell would be a faster computer than the one you initially selected, a gym membership with a personal trainer rather than just the ‘basic' plan which only includes the use of workout equipment. It could also be a cell phone plan with more minutes than you originally planned to buy.
Back to McDonalds. The employee then says to you, “would you like fries with that?” That's the cross-sell. By the way, when they ask me that, my natural instinct is to blurt out something like, “do I look like I have some disability that would prevent me from asking for fries if I wanted fries?” But I don't say that, I hold myself back…
So the question, ‘would you like fries with that' is a cross-sell. They're asking if we'd like to ADD another item to our purchase.
A cross-sell item is almost always at a lower price point than the original item, and that's deliberate. Why? The decision should seem easy.
Another example of a cross-sell is when someone offers you an extended warranty to go with a new household appliance. We've all been in an electronics store and been offered the opportunity to take advantage of ‘extended coverage or protection' at the time of purchase.
Amazon do a great job of the cross-sell. They always offer compatible items that other customers purchased. That's a cross-sell.
If the customer agrees to the cross-sell, the ‘bump' is where they're offered a special ‘upgrade' deal on what they've already committed to. For example, if a cross-sell is for an apple pie at McDonalds, the employee might offer ‘another dessert for just $1 more if you buy it now.' Or, ‘three apple pies for just $1 .50 more.'
Taking another example, if you had committed to, say a 2 year extended warranty on an electronics purchase, the bump would be to offer 5 years “for the price of the 3 year plan” or something similar.
The point is, a bump has to be perceived by the customer as an irresistible offer. They should reason to themselves, ‘I'd be a fool to pass this up.' In a way, it's the upsell to the cross-sell, if that makes sense.
Of all sales devices, the upsell is the most well known, but very few businesses employ it. The other two, the cross-sell and the ‘bump' rarely get a look in.
What about on eBay? Is it possible to utilize these clever techniques? The ‘other items from this seller' box that appears below many listings are really a cross-sell opportunity. The upsell can also be achieved by pointing out the benefits of a premium version. The bump is a little more difficult, but once the customer is yours, you can offer a special deal on future purchases. Hopefully the examples in this article will trigger some further thoughts for you.
Why employ these devices? Because they take very little effort, and they can substantially increase your profit. If a company offers a 1 dollar upsell and they get 120 customers a day to agree to it, that's an extra $31,200 a year! And what was the cost of offering the upsell? Zero. A few seconds of someone's time.
Coming back to the McDonalds example, ironically, despite the way their selling system has been tweaked and perfected over the years, it still falls down in one crucial (and basic) area in a BIG way.
Can you guess what it is?
One word. Employees. Even though they're trained to maximize every sale, the implementation is not consistent, as you've no doubt observed. You can't count on being asked EVERY time, can you? So the lesson there is, you can have the best sales system on the planet, but it's useless unless it's put into action consistently and reliably.
Another danger to be alert to is in overly pushy sales people. No one likes an obnoxious, forceful salesperson where you feel like you're having an arm twisted to ‘comply' with their wishes. Remember, in that kind of situation, the value of the offer should speak for itself. If you have to do a lot of selling then it's not a good enough offer.
Lastly, be sure that when an upsell is offered, that the customer has a great experience with your company. If the employee is half-hearted, just going through the motions, and seems as though they're simply reciting a script, then few customers will respond to that.
The secret key to using all of these techniques effectively is….
To assume.
What do I mean by that?
Assume that the customer will take advantage of your offer. Be confident. Try and convey that MOST customers take the upsell, cross-sell or bump. It's the normal course of action.
Present the offer in a low key, ‘by the way' type of fashion. Say something like, “I almost forgot to mention' so the customer feels like you're doing them a favor in getting a better deal for them.
By contrast, if you make it seem like a big decision, to be thought about carefully, guess what customers will tell you? They'll have doubts and won't respond positively to the offer.
I urge you to look at ways to implement these powerful selling options in your business. If necessary, phone your customers to offer them these options, or figure out a way to interrupt the usual sales process to make these important offers. And remember that lots of relatively small amounts DO add up, and they can be surprisingly profitable.
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