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A Guide To Upselling & Cross-selling In Retail

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The retail industry has very tight margins. In order to boost your bottom line and end your year in the black, you need to ensure that you are maximising each and every transaction. Are you letting your customers walk out of the door without equipping them with everything they need?

Some of the best ways to increase your retail profits are cross-selling and upselling. Cross-selling and upselling aren’t just about making more money for your shop – they are most effective when you put time, effort and thought into what you are suggesting. By cross-selling and upselling effectively, you can provide your customers with items that will make their lives easier and more enjoyable.


 

What is upselling?

Upselling means offering a customer a more expensive version of the item they are already committed to buying.[1] You already have the customer in your shop, so why not leverage their presence into a bigger sale? By offering an upgraded version of the object, you can boost your bottom line.

Lush Cosmetics is particularly good at this technique. They make many larger sizes of many of their best selling products. When a customer is heading to the till with a small tub of their Dream Cream or shower gel, they always point out that the larger sizes are a better value.

In order for this to be a successful strategy, your suggestions need to be genuine – you can’t come off as ‘pushy’ or desperate. If you come on too strong, you’ll lose all of the rapport you have built. You don’t just risk losing your upsell, you risk losing the original sale as well.


 

What is cross-selling?

Similar to upselling, cross-selling (sometimes also called suggestive selling) is also about boosting the profits you can make from your existing foot traffic.[2] Cross-selling involves offering your customers additional, often complementary, items in addition to what they have already committed to buying.

The most classic example of cross-selling occurs when a server offers you a scoop of ice cream or a side of custard with your pudding. It a perfect, sensible pairing – the two dishes go extremely well together. You wouldn’t think of a server as trying to ‘trick’ you into spending more money. Instead, you would likely think of them as helping you out. You have already decided to spend the money on a treat, and you are willing to splurge on a high-calorie pud. That’s why this is the perfect time for the restaurant to make more money, and for you to get something nice.


 

Tips to help you cross-sell and upsell in retail

Remember – selling your customers additional items isn’t ‘tricking them’ – you are genuinely giving them better customer service. Here are some smart tips to help you start upselling and cross-selling in your retail shop.

Understand your customers

The first step to successful upselling is understanding your customer. You need to think about what they are looking for, and the pain points and problems they are hoping to solve. Do they want softer skin? Louder music? A formal suit to wear to a wedding? By understanding their problem, you can become a part of the solution. In addition to learning about what they want, it also helps to know what they need.

Your camera shop might sell a telephoto lens that can capture animals hundreds of metres away on safari, and it might go brilliantly with the camera your customer just bought. However, if they are planning a safari, the lens will do them no good. Suggesting it could erode the confidence they have in your relationship.[3]

Listen to your customers

The best way to understand your customers is to carefully listen to what they have to say.[4] You initiate your rapport by being friendly and knowledgeable, but you will really cement your good relationship by carefully listening to what they have to say. Ask them targeted and thoughtful questions. If you actively listen to them and repeat their most important points back, you can glean the knowledge you need to upsell and cross-sell them what they want and need.

Be sensible about budget

While we all want to ring in that massive sale at the register, you could lose the sale completely if you don’t think about your customer’s budget. While you might be able to push their spend to the upper limits of their budget, you shouldn’t attempt to go too much beyond a reasonable spending limit.[5]

The best way to gauge this is to look at the items they have already selected. Are they perusing the sale section, and planning to buy a discounted pair of trainers for £30? If so, don’t suggest that they add on the most expensive sport socks in the shop. Instead, consider suggesting a reasonably priced weather protectant spray, as it will prolong the life of the shoes and help them get an even better value.

Map your customer’s journey through the shop

The psychology of retail shop design is fascinating. [6] People are more likely to buy additional items if they are placed in a convenient place in the shop. This is why so many ‘impulse buys’ are placed directly in front of the register.[7] At Superdrug and Sports Direct, the clerk always suggests specific items that are strategically placed right at the point of sale. Think carefully about your customer’s journey through your shop.  Any complementary items and commonly paired categories should be close together, i.e. socks displayed next to shoes, and flatware next to dinner plates. These are easy cross-sales that you can make quickly and seamlessly as you close the initial sale.

Know which items you can seamlessly pair together

Even before a customer enters your shop, you should already have a whole host of cross-selling and upselling suggestions in mind. You know your stock inside and out, and so you should also have some ideas about what pairs well together. Some common cross-selling examples include suggesting cufflinks to someone buying a watch. Same for socks with trainers, wholesale greeting cards with wrapping paper, handbags with shoes, ties with a blazer, and earrings with a necklace. What would pair well in your shop?

Make sure that you suggest products that are relevant to the customer

Cross-selling and upselling will only feel natural and seamless when you recommend products and services that provide your customers with value. Make sure that your suggestions are useful and relevant to what they are already buying, and what they have already told you.

Paint a picture for your customers to sell intangible value

While it is easier to make a sale when the customer sees inherent value in the product, you can help them to gain an understanding of how it can benefit them. Use storytelling techniques to paint a vivid picture of the benefits that the product or service could have in the customer’s life.

Rattling off the product’s specs and features might convert the rare customer, but most people will be captivated by how the product might improve their lives. Paint a verbal picture to help them see the true value in what you are trying to sell.

Follow the “Rule of 3” and offer 3 options

Another time-honoured cross-selling method is to follow the ‘rule of 3.’ This entails offering a customer three different items.[8] One of the items should be in the middle of their stated budget, while another should be right at the top. The third should be slightly extravagant and above what they are expecting to pay, but should entice and allure them. Ideally, they will settle on the second or third option.


Cross-selling and upselling will increase your bottom line

These techniques are some of the simplest ways to boost your sales and raise your per transaction total. By listening to your customers, providing them with value, and making additional suggestions, you will build rapport and earn loyal repeat clientele. Happy sales!


 

Reference list

Bernazzani, S. (2018). 6 Tips to Learn How to Upsell and Cross-Sell. [online] Hubspot.com. Available at: https://blog.hubspot.com/service/upsell-and-cross-sell [Accessed 27 Jan. 2020].

Chang, G. (2017). 5 Ways Retailers can Add Value to their Customers. [online] Multichannel Merchant. Available at: https://multichannelmerchant.com/blog/5-ways-retailers-can-add-value-to-their-customers/ [Accessed 14 Nov. 2019].

Dooley, K. (2018). 4 ways to find out what your customers want. [online] Customerexperienceinsight.com. Available at: https://www.customerexperienceinsight.com/4-ways-to-find-out-what-your-customers-want/ [Accessed 27 Jan. 2020].

Hayes, A. (2019). Suggestive Selling. [online] Investopedia. Available at: https://www.investopedia.com/terms/s/suggestive-selling.asp.

Murphy, T. (2015). The Psychology of Retail Store... [online] StoreBest Shopfitting Co. Available at: https://www.storebest.ie/the-psychology-of-retail-store-design/ [Accessed 27 Jan. 2020].

Nicasio, F. (2018). How to Encourage Impulse Buys and Unplanned Purchases in Your Retail Store - Vend Retail Blog. [online] Vend Retail Blog. Available at: https://www.vendhq.com/blog/encourage-impulse-buys-store-deeper-look-unplanned-purchases/.

Nicasio, F. (2019). How to Upsell and Cross-Sell in Retail: 6 Pointers to Implement in your Store - Vend Retail Blog. [online] Vend Retail Blog. Available at: https://www.vendhq.com/blog/cross-sell-upsell-retail/ [Accessed 27 Jan. 2020].

Renner, D. (2019). 3 Easy Ways to Upsell (Without Being a Pushy Salesman!) | Peek Pro. [online] Peek Pro. Available at: https://www.peek.com/pro/featured/3-easy-ways-to-upsell-without-being-a-pushy-salesman [Accessed 27 Jan. 2020].


‌Resources

[1] https://blog.hubspot.com/service/upsell-and-cross-sell

[2] https://www.investopedia.com/terms/s/suggestive-selling.asp

[3] https://www.peek.com/pro/featured/3-easy-ways-to-upsell-without-being-a-pushy-salesman

[4] https://www.customerexperienceinsight.com/4-ways-to-find-out-what-your-customers-want/

[5] https://multichannelmerchant.com/blog/5-ways-retailers-can-add-value-to-their-customers/

[6] https://www.storebest.ie/the-psychology-of-retail-store-design/

[7] https://www.vendhq.com/blog/encourage-impulse-buys-store-deeper-look-unplanned-purchases/

[8] https://www.vendhq.com/blog/cross-sell-upsell-retail/

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