Effective upselling and cross-selling

For some, finalising a sale or signing a contract means success. More and more often, however, managers and business owners are paying more attention to how many products a client purchases in each transaction and aren’t satisfied if it’s just one.

The easiest way to illustrate the differences between cross-selling and upselling is the well-known example of companies that have used these two tools for years and have achieved measurable results. When we drive up to the window of one of the recognizable fast-food chains and order a meal, we hear either “would you like a large meal?” or “would you like fries with that?”.

Sales, though not easy, is based on simple solutions. The same is also true in the above case. It was thought that just asking one of these questions would increase profits. The famous “would you like fries with that?”, which was so often the subject of jokes (which McDonald’s then used in a campaign to recruit employees), has made the golden arches into a global brand that sells nearly 4 million kilograms of fries every day¹ . The questions above have built a $20 trillion hamburger empire² and yet we would rather laugh at it than imitate it. How many companies have used similar solutions? From my observations and experiences, I can’t give many examples. Petrol stations certainly come to mind, since they don’t earn much on the petrol itself, but on additional products and questions such as: “need washer fluid?” and “perhaps you’d like a coffee?” These are examples of simple and yet effective cross-selling, i.e., selling additional products on top of the customer’s original order. So why don’t other companies use it? Perhaps we think, we’re not in fast food, we do serious sales... We also often like to say that our industry is specific, so such simple tools just won’t work. The situation is similar in the case of upselling, i.e., increasing the customer’s not by selling additional products, but by suggesting that the customer buy a larger quantity or a higher-value product. To do this effectively, you have to several conditions, which we’ll discuss in a moment. At the beginning, however, it’s worth considering why cross-selling and upselling may not work.

Why upselling and cross-selling may not work

1] Because we aren’t using them - this is the simplest answer that managers often find hard to believe. I was an example of this myself and to this day I remember the situation when I worked at a chain of stores selling air rifles. I was helping a middle-aged man who was looking for an air rifle that he and his 11-year-old son could use for target practice. When I went to the back room to get the chosen model, the manager came up to me and told me that he was listening to the conversation. He asked me to try to sell the man some goggles for himself and his son. I replied that I was sure that as a father he had thought of that, and that I doubted they would want to buy goggles for $10. The manager smiled and just asked me to ask anyway, and that was it. He smiled again when the customer asked for two pairs of goggles in response to my question and thanked me for reminding him about them. As salespeople, we often feel that we know best what the customer needs, and we often refrain from asking questions or offering products or services because we think we know what the answer will be. This is one of the sins of cross-selling and upselling that we don’t realise or don’t want to realise.

2] We ask the wrong questions, or we ask them at the wrong time. The most common mistake is to try to negotiate: “Wouldn’t you like to ...?” A negative question automatically suggests a negative answer. Another version of this mistake is giving the client a backdoor to refuse: “Would you like to ... or not?” Sometimes we offer something completely pointless, as in the example of a petrol station employee asking a customer who’s buying an energy drink if they’d like a coffee.

3] We aren’t prepared for it - in B2C sales I most often encounter a lack of clear strategy and standards in this area. The truth is that if a company doesn’t require or monitor something, that tells the salesperson that it’s not important. Every company cares about bundled transactions, but not every company has checked what stages of the client purchase path can be improved. On the other hand, in B2B sales there is also the question of preparing for a meeting and the salesperson’s negotiation skills. An example would be a manufacturing company salesman meeting with a potential distributor which has agreed to purchase the company’s basic product. They could also get free delivery if they ordered an additional bundled product, but the salesman didn’t check whether they were already getting the additional product from a competitor for a better price (though, as it turned out, in that case the client had to arrange their own transport, so saving them time and offering free delivery would have changed their decision). There was no cross-selling, which would have been very easy if the salesman had been prepared for the meeting.

These are a few basic issues that explain why cross-selling and upselling can be ineffective and why these tools seem to be quite rarely implemented. This is partly due to sales strategies and partly due to mental blocks that salespeople themselves create (because the client won’t take it, because the competition has better offers, etc.). So, what can we do and what actions can our sales teams take to improve these processes?