Fall 2010
But Wait, There’s More!

This holiday season, when every sale can make the difference between being in the red or black, high-impact sales techniques can help. Find out how upselling and add-on sales can make every customer transaction a blockbuster.

As a specialty retailer, you are fully aware of the impact add-on sales and upselling can make to your bottom line. Here are some tricks to make both work this
holiday season and beyond.

Upsell and add-on

Even if they are sometimes used interchangeably, upselling and add-on sales are not one and the same thing. Each one sells product differently so it helps to revisit the basics:

Upselling essentially is moving the customer “up” to a larger item (in terms of weight or volume) or to a more upscale version of an everyday item. Examples include:

  • Pointing the customer to the 14-K gold jewelry in your kiosk as opposed to the lower-priced gold-plated ones
  • Directing the customer to a larger sized bottle of lotion or other cosmetic product

Add-on sales means just that—you add on to what the customer has already bought by offering complementary (or simply more of the same item) items that might go together.

Examples include:

  • Selling crystal hair accessories along with hair extensions
  • Selling batteries with toys
  • Selling three pairs of socks as a set as opposed to just one

Some salespeople mistakenly think that add-on selling and upselling techniques are designed to manipulate customers into buying items they don’t want or need. Like any retail sales technique, add-on selling and upselling can be used to manipulate the customer. But when properly used, these tools can keep the customer happy (when they can get a bargain, for example, or a higher-quality product that will serve them better) and enhance the overall shopping experience. If both strategies are used with the customer’s best interests in mind, you can deliver attentive and responsive customer service while landing sales and increasing profits.

Don’t assume that the customer is well educated about all your products and services. Salespeople often think that, “If the customer wants something or has a question, they’ll ask.” Not so! This is a reactive selling strategy that does not drive sales—nor does it do anything to make customers feel like they are receiving superior customer service. According to a shopper survey by workforce-management company Kronos Incorporated (kronos.com) and market researcher Harris Interactive (harrisinteractive.com), 85 percent of consumers said they were more likely to purchase additional products if they interacted with a knowledgeable sales associate. It helps to recognize that when it comes to product knowledge, customers don’t know what they don’t know. Adopt a proactive approach that involves educating customers, making them aware of product benefits and suggesting additional buying options.

What works (and what doesn’t)

Here are a few do’s and don’ts when it comes to add-on sales and upselling:

Ask questions. Rather than simply showing the best (or highest-margin) merchandise first, begin by asking targeted questions to determine customers’ wants and needs. Asking questions not only helps determine buying motives, but will also make customers feel understood. When that happens, customers are more inclined to listen to a salesperson explain other buying options, including higher-priced merchandise that might serve their needs better.

Educate staff. Make sure all your salespeople have in-depth product knowledge and information about the upselling or add-on options for each product. Every salesperson should know what additional products “go with” a certain item for add-on sales, and what the higher-priced options are for upselling. A lack of training in these areas will result in lost sales. Smart salespeople are always eager for opportunities to remind customers about additional purchasing options or to explain why a higher-priced item may make a more suitable purchase.

Define value. Remember that upselling leads to increased satisfaction. In general, consumers are more satisfied with higher-quality merchandise than they are with “value” merchandise. When sales associates upsell customers to higher-priced merchandise, retailers not only increase their sales but customer satisfaction as well. Over time, increased customer satisfaction means customer loyalty, repeat business and great word-of-mouth advertising.

Look at every interaction as an opportunity to win over a customer not just for today but for tomorrow, too. Happy and satisfied customers are likely to remember their positive experiences at your store, and think of you the next time they go shopping. The more positive the experiences they have at your store, the more likely they’ll return. Remember, it costs more to land a new customer than it does to ring up a repeat one!

Test the transition. Make statements that will allow a smooth transition to showing additional merchandise. If the customer is not interested in hearing about additional merchandise or higher-priced options, that’s fine, but don’t decide not to show a product just because the customer did not bring it up first. Take the lead and suggest products and services to your customers. Examples include: “I’ve got something great to show you,” or “Let’s take a look at [product X] to go with your new [product Y],” or “Let me show you the accessories you’ll need to operate and take care of your new [product].”

‘Tis the season to give. Remember that during the holidays, customers are shopping for many people—including themselves. Once a customer has chosen a product for someone on their holiday shopping list, a simple question such as, “Is there anyone else on your holiday list that would enjoy this [product] too?” or “Would you also like to get one of these for yourself this year?” can increase sales tremendously with very little effort. The Kronos/Harris study revealed that 45 percent of survey respondents said that they shop for themselves during the holiday season. The more that salespeople can help customers fulfill all of their holiday shopping needs, the better the customer will feel—and the fuller the cash register will be.

Get a head start. Don’t start the upselling process when the customer reaches the register. Effective upselling should start long before customers reach the cash wrap. Customers appreciate advice and recommendations while they’re shopping, not paying. When customers are at your register, they want a smooth and prompt end to the transaction. They are no longer in a frame of mind to appreciate additional buying options. In the customer’s mind, upselling at the register demonstrates you care only about selling to them rather than serving them. Upselling at the register is not proactive, customer-focused behavior; it’s simply annoying. And that means that the last feeling that your customer will have before leaving your store will be negative—the opposite of what you’re aiming for.

That said, there’s nothing wrong with limited add-on selling at the register, such as offering, “We also have the batteries you’ll need for your new [product].” For common items such as batteries, keep in mind that the stock should be at the register, so the customer doesn’t have to wait for you to retrieve additional items.

Looks don’t matter. Don’t judge customers based on appearance when it comes to upselling. Ask any veteran salesperson and they’ll surely have a story about a customer in a grubby T-shirt and sweat pants who spent more money in one shopping trip than most customers do all year. Judging based on appearance is a fundamental “don’t” in all customer interactions, and if not followed can be detrimental to potential sales and customer relationships.

Avoid overworked sales clichés. The most popular (and ill-advised) way of ending a sale is by asking, “Would you like anything else today?” This question will almost always elicit a quick “No” and bring an abrupt end to your customer interactions. In fact, salespeople should never be the ones to end the sale. Only the customer should end the sale. The customer will always signal when they are finished shopping and if they seem unsure, it’s better to ask, “What else can I help you find?”

Train sales techniques. When it comes to maximizing sales, owners and managers tend to say, “We need to increase sales,” but then fail to train their people on how to accomplish that goal. Salespeople need to be taught what upselling and add-on selling is—serving the customer—and what it is not—blindly suggesting more merchandise. Try on-the-floor coaching or role-playing customer interactions to help your salespeople learn the difference, practice their skills and gain some confidence. Your training efforts will be rewarded with increased sales.

Customer service counts

Upselling and add-on sales aren’t just about getting customers to buy more product. These techniques are designed to fulfill customers’ needs, whether those are getting a bargain, buying a higher-quality product, receiving excellent customer service, or merely having a positive, productive interaction with sales staff. The bottom line benefit is increased sales, but the focus is really on fulfilling customer wants, needs and desires.

Andrea Waltz

The co-author of four books and hundreds of published articles on sales and management topics, Andrea is also the editor of the Courage Crafters e-zine "ROAR!" which is read by thousands of business professionals every month.
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