Upselling and cross-selling have obvious benefits for any firm, no matter the industry. The problem is, most clients can see right through the typical "You may also like… " or “Wait, there’s more...” lines, and hesitate to expand their working relationship with you even if it’s beneficial for them to do so. Even initiating a conversation with a client about other services can be even more challenging if the client generates significant revenues, you are responsible for the client relationship.
Upsell vs. Cross Sell: What’s the Difference?
Cross-selling and upselling are often used interchangeably, but different scenarios with different clients often call for one specific approach over the other. The word "upsell" generally refers to a service that enhances or expands the current services being delivered. Cross-sell, on the other hand, refers to services that are beneficial to the client, but may not be related to the current services.
Here are five things to keep in mind as you initiate cross-sell / upsell opportunities.
Tips for a Successful Cross-Sell / Upsell Initiative1. Focus on the outcomes.
You don't want to overwhelm your clients with service suggestions - after all, they are already buying your services. The objectives with any cross-sell / upsell effort is to expand the relationship through the addition of services that they find of value. With limited opportunities to upsell or cross-sell, it is important to maximize your opportunities in order to drive revenue.
Several research studies have proven that upselling works 20x better than cross-selling. Once buyers have experienced a certain relationship with your firm, they often don't want that relationship to change. However, when the option is a product or service that enhances the relationship without adding complexity, that is what really captures their attention.
Sometimes upselling isn't an option like when a client is already utilizing the maximum capabilities of your firm within a particular area. The key is to think about the future needs of the client based on their goals and challenges, as well as economic and industry changes.
If you've ever waited on the phone for a customer service rep to help you solve a simple problem, only for them to offer a million "opportunities" before asking for your information, you can understand the frustrations your clients might feel. Suggestions of a cross-sell or upsell service that is irrelevant will only serve to create frustration, ultimately endangering the relationship with your company – which is why cross-selling and upselling are often avoided in professional service firms.
Any discussion of additional or supplemental services must meet the client’s needs at that point in time. Use a healthy dose of common sense. Is this the right time to have this particular conversation or is the client consumed with another issue at the moment? Will this service help the client achieve their goals? Will it make their lives or businesses better, faster, more effective, more efficient, etc? The first step is to hone your active listening skills.
If clients feel at any point that you are just trying to sell them something, they'll retreat or, worse yet, bolt. The more open, honest and transparent the conversations during the process and the longer you remain in a mindset of helping them determine the best next step – whatever that might be – the greater the trust and loyalty. If what you wanted to offer isn’t the best solution, say so. Nothing undermines a relationship faster than the lack of trust.
4. Demonstrate value.
Once it’s determined that an upsell or cross-sell opportunity exists and makes sense for your client, you must demonstrate the value. Information such as case studies or an analysis can be helpful in demonstrating value. If you have data about the increases in KPIs, share it. Make sure the value is clear and the information is as unbiased as possible to give your client ample opportunity to make a solid business decision – without too much pressure.
Once a client has decided to add products or services to the mix, support the decision with data. This is particularly important if you presented potential KPIs during the decision making process. Doing so reinforces that they made a solid decision and that they can trust your consultative guidance.
Just like any other business development effort, a little strategy goes a long way. While few firms actively venture down this revenue road less travelled, those that do reap the (revenue) benefits.