Upselling is a common sales approach, intended to increase the value of sales by encouraging customers to either opt for a different product or service or to add additional features to their current choice. This article explores different approaches to upselling – from adding features after initial commitment, steering the customer towards more premium offerings, and bundling of services together.
Approach 1: Upselling after commitment to the initial purchase
The classic approach to upselling is to offer additional services and features after the commitment has been gained to the original purchase. For example, after you have agreed to purchase many electronic items, you are presented with the option to buy warranty extensions for the products. Similarly, after choosing to book a flight, it is common to be presented with the option to pay an additional fee to choose your seat.
The specific time at which the upselling occurs can also vary. Sometimes it happens after you have paid for the original item. You may for example receive an email after the purchase offering additional features. The alternative is to add additional features prior to the purchase actually being finalized. The advantage of offering additional features after the product has been sold is that it avoids the risk that encouraging upselling will reduce the likelihood of the initial purchase – the increasing costs may cause customers to abandon the purchase. The flip side is that while upselling after the fact is less likely to cause the initial sale to fall through, the upselling may be less likely – at the time of purchase, customers may be less likely to scrutinize the addition of extra services.
Approach 2: Suggesting an alternative product or service
An alternative approach to upselling is to steer customers towards certain products rather than others. Rather than offering additional features after the purchase has been agreed to, this approach involves highlighting additional benefits of alternative offerings, in an attempt to encourage potential customers to buy a more premium item rather than a more basic model.
Approach 3: Bundling of the products in one package
Another approach to upselling is to bundle the items together – selling a package of separate components for one price. This package deal can potentially be presented as an alternative to the individual items, with a discount for buying multiple items together rather than individually (in turn encouraging individuals to opt for the bundled of items).
Bundling of various different products and services together in one quotation is common with a lot of service and construction work. Given there are many different components of such arrangements, it is not unusual for a quote to be put together, combining various feature choices in an overall proposal (sometimes with several different arrangements presented as alternative options). Bundling items again may facilitate upselling, by selling the customer an overall package containing several components.
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