What is Upselling?
Upselling is a sales technique that encourages customers to spend more money by buying an upgraded or premium version of a product being purchased. Upselling results in a business increasing their average order value and making more revenue.
Upselling vs. Cross-Selling
The main difference between upselling and cross-selling is that upselling is getting a customer to purchase a more expensive version of a product and cross-selling is encouraging a customer to purchase a related product.
Upselling is a common practice in both business-to-business and business-to-consumer selling situations. Here are a few examples:
- An airline prompts the passenger flying coach to upgrade to a first-class seat as part of the airline check-in process.
- A restaurant menu gives diners the option of adding chicken or shrimp to a salad for an additional cost.
- The check-out process for an online book retailer offers the audio version of a printed or e-book for a discounted price.
- An auto salesperson recommends that a driver purchase a vehicle with a more expensive trim package that includes amenities such as leather seats.
- An online tool or resource is available in its most basic version for free, but unlocking premium, desired features involves paying a fee.
Upselling Best Practices
Upselling can help a business generate additional income when done properly. Best practices include:
- Avoid recommending a product or service that is significantly more expensive than the product being purchased.
- Don’t be too pushy or aggressive. Accept “no thank you” as a response.
- Focus on the customer’s needs and how the value-added offer will help meet those needs.
- Upsell when possible and appropriate so no opportunity is missed.
- Offer side-by-side comparisons so the customer can see the value in the premium version.
- Educate the customer as part of the upsell so the customer understands the risk of not taking advantage of the offer.
- Offer an in-the-moment-only discounted price to encourage the customer to make an immediate decision.
Successful in-person upselling might require training or coaching in appropriate techniques. Understanding how to upsell effectively can generate additional income, but doing it the wrong way could alienate the customer.