What is Up sale? Principles for effective Up sale application

What is Up sale? This is one of the familiar strategies that appears in all business models today, helping businesses increase sales efficiency and improve sales. In the article below, let's learn about the concept, role and principles to successfully implement Up sale with 1C Vietnam!

1. What is up sale?

Upselling is a sales strategy in which a seller tries to persuade a customer to buy a higher priced or more premium product than the one they originally selected. Additionally, the seller may offer additional benefits along with the product to achieve higher sales targets.

When implementing the Up sale strategy, the seller will communicate directly with customers to understand their desires and expectations for the product. This helps businesses maximize profits and build close relationships with customers.

Here are some examples of Up sale techniques:

• A customer is looking to buy a new phone, and the salesperson will know that they need a phone to take pictures of family trips, so they will suggest a phone with a higher-end camera and more storage than the customer originally decided.
• When going to a coffee shop, instead of buying a size M cup of water, the sales staff will suggest customers buy size L because there is a discount.
• Online music platform Spotify offers Premium plans based on streaming quality, ad-free music listening on all devices… This will encourage customers to subscribe.

2. The importance of the art of Up sale

Up sale is widely applied in the business environment, especially in today's fierce competition, businesses need effective Up sale strategies to retain customers and increase profits. From this tactic, businesses will gain many benefits such as:

2.1 Building customer relationships

Upselling focuses on helping customers satisfy their needs by suggesting upgrades or additional features. This provides value and makes customers feel like they are getting a better deal, which in turn improves sales.

2.2 Retaining old customers

Finding new customers will cost a lot if it takes a long time. According to statistics, the probability of selling to existing customers is 60-70%, while the probability of selling to new customers is 4-20%. Therefore, businesses often choose to optimize sales to customers who have trusted and used the product in the past to promote growth and improve the bottom line in Up sale.

2.3 Increase customer lifetime value

Customer lifetime value is the net profit contribution that a customer generates over a long period of time. Businesses can divide customers into three main groups: Unprofitable, Profitable, and Very Profitable. The higher the lifetime value, the more revenue the customer generates for the business without additional investment. Upselling is an effective solution for businesses to turn buyers into profitable and loyal customers.

2.4 Increase the likelihood of old customers returning

Up sale strategy creates some utility to solve the problem of customers, ensuring that they will come back in the future. Therefore, businesses need to provide excellent services and sales policies to ensure customer satisfaction in all situations.

3. Principles of applying Up sale

Up sale is considered a method that brings many outstanding benefits to businesses. Therefore, to apply Up sale effectively, businesses need to pay attention to the following principles:

• Choose the right time: Sales staff need to carefully observe the customer's attitude to choose the time to consult Up sale, this ensures that the customer does not feel uncomfortable and increases the chance of success.
• Don't put pressure on customers: Forcing customers to buy products only has the opposite effect. Sales staff should always make customers feel listened to and respected to increase their trust in the brand.
• Always put the customer's interests first: If you only focus on profit, the Up sale strategy will hardly succeed. Businesses should always put the customer's interests first, put themselves in the buyer's position to understand the customer's wishes and advise the best products.
• Measurement and control: Sales staff need to measure and control sales continuously, to promptly adjust effective sales consulting strategies.

4. Some methods to help businesses Up sale effectively

In addition to understanding the nature of Up sale, businesses also need to have effective Up sale sales strategies to increase sales, increase customer conversion and build close relationships with potential customers:

4.1 Up sell related products or services

Instead of focusing solely on selling the initial product/service, businesses should suggest related products/services to optimize value and create opportunities to increase sales. This also helps businesses improve and complement customer needs, thereby increasing the average value per transaction.

For example: If a business is in the mobile phone business. Instead of just selling phones, the business can offer additional accessories such as headphones, cases, tempered glass, etc. to increase sales.

4.2 Limited Time Offer

Creating limited-time offers will help stimulate customers' purchasing decisions. Additionally, notifying customers of the limited time frame for each offer is also a way to encourage customers to make quick decisions.

For example, an offer that is only valid for 5 days will make customers make a quick purchase decision because they don't want to miss out on the savings.

4.3 Create incentive packages

Businesses can create higher value add-on packages or products, including discounts, freebies, or more upgrades to drive customer desire to purchase.

For example, a bundle offer that includes a set of related products at a discounted price and a unique freebie will make customers feel like they are getting greater value from the deal, motivating them to make a quick purchase decision.

4.4 Discount for next purchase

After customers choose to buy a product/service, businesses can offer discount codes for future purchases. This encourages customers to buy more products in the same transaction.

For example, if a customer buys a pair of sneakers, the store can discount the second pair to motivate the customer to return and increase the value of each transaction.

4.5 Free gifts

Businesses can include a small gift when customers decide to upgrade their products/services. This helps encourage customers to make more upgrades in the future.

For example, if a customer wants to upgrade their phone line, the salesperson can give them a set of wireless headphones to show gratitude for the customer's purchase decision.

4.6 Provide useful values

Providing complete useful information and professional advice on products/services will help customers have a more comprehensive view. Salespeople should always be ready to answer questions or resolve problems after the transaction and provide instructions for use to help customers make effective use of the product. In addition, listening to customer feedback on products/services will also help businesses implement better solutions, helping customers feel more secure about the quality of service.

4.7 Give shopping vouchers

When customers upgrade their selection or purchase a higher-end product, businesses can offer gift cards to encourage customers to return to shop.

For example, if a customer upgrades a standard outfit to a premium one, the business can offer a shopping voucher that they can use on future purchases. This will create a strong relationship with the customer and earn them positive reviews.

5. Distinguish between Up sale and Cross sell

Up sale and Cross sell are sales strategies that share the same goal of increasing business profits. However, these two terms are completely different in nature. If Up sale is a strategy to encourage customers to buy products with a greater value than the original product, Cross sell encourages customers to buy other related products/services based on the buyer's needs and the seller's reviews.

Below is a specific analysis table of the differences between the two concepts Up sale and Cross sell:

Overall, both of these business strategies are great solutions for businesses to strengthen customer relationships, improve sales, and retain loyal customers.

6. Skills to successfully perform Up sale

In addition to mastering the knowledge of what Up sale is, sellers need to supplement many skills to convince customers and increase sales. So what are the necessary skills to help sellers Up sale effectively? Please refer to the suggestions below:

6.1 Identify potential customers

Potential customers are those who have a need to use the business's products/services and are in the research phase. Through conversations with customers, salespeople will determine whether they are potential customers or not. This is an important skill in the Up sale process that any salesperson needs to cultivate.

6.2 Questioning skills

Knowing how to ask the right and sufficient questions is a skill that determines success when performing the Up sale technique, helping sellers suggest and identify customers' shopping needs.

There are two common types of questions: Open-ended questions and closed-ended questions. Sellers need to use them flexibly to determine customer needs. Using closed-ended questions helps sellers limit their goals, exploit basic information, etc. Meanwhile, using open-ended questions is a way for customers to share feedback and contribute opinions based on their perspectives on the product.

6.3 Customer listening skills

As one of the important factors in the Up sale strategy, customer listening skills help businesses improve customer experience and sales. Salespeople can listen to customers through body language and actions as follows:

• Make eye contact with customers and be friendly.
• Focus on the customer's demeanor and tone.
• Avoid interrupting while the customer is speaking.
• Use yes and yes to show that you are listening to the story.
• Respect customers, do not do personal work such as playing on the phone, handling personal work...

6.4 Skills to handle customer rejection

Customer rejection is a situation that any salesperson has to go through. To handle this professionally, the salesperson needs to exploit the reasons for the customer's rejection, then flexibly apply the following handling methods:

• Adjust presentation style according to customer attitude: Salespeople need to use a presentation style that is more expert-like or a soft approach.
• Acknowledge the objection: The seller should acknowledge the customer's objection, then provide accurate information tactfully, do not try to appear to dismiss the customer's point of view, this will make things worse.
• Offer a compensation plan: Don't try to cover up the error, sellers should frankly acknowledge the error and offer a reasonable compensation plan to score points with customers.

In addition to following the principles when implementing Up sale, businesses can apply additional solutions to help manage customers and partners to improve business performance and establish close relationships with customers. 1C:ERP is a comprehensive business management solution, providing tools to help businesses monitor and plan business, helping to save time and effort of administrators. Therefore, if a business is looking for a management solution with a global technology platform, 1C:ERP is a top choice.

1C:ERP solution stands out with its CRM subsystem that helps businesses manage customer relationships, deploy effective Up sale campaigns, attract and retain customers. Some outstanding features of this subsystem include:

• Maintain contact information of potential customers and partners.
• Track customer interactions through notification systems.
• Clearly divide customer segments, collect data for business analysis, and thereby determine appropriate sales strategies.
• Create and control marketing programs and events.
• Track important metrics during the Up sale and sales process, such as revenue, sales, customer retention rate, customer support time per transaction, etc.
• Store contracts, sales documents, and manage discounts flexibly for each customer.
• Monitor and analyze customer complaints based on each order…

It can be seen that Up sale is a sales technique that allows sellers to learn about customer needs and advise on the best products/services, thereby helping to increase revenue and sales for the business. Hopefully, with the information about what Up sale is and the important principles for implementing an effective Up sale strategy, businesses will learn a lot of useful knowledge about this important topic! For more detailed advice on the 1C:ERP solution that supports businesses in implementing an Upsale strategy suitable for each customer segment, please contact the hotline: 0247.108.8887 for the fastest support.