Upselling

Upselling is a sales technique where a seller induces the customer to purchase more expensive items, upgrades or other add-ons in an attempt to make a more profitable sale. While it usually involves marketing more profitable services or products, it can be simply exposing the customer to other options that were perhaps not considered. (A different technique is cross-selling in which a seller tries to sell something else.) In practice, large businesses usually combine upselling and cross-selling to maximize profit.

Upselling is the practice in which a business tries to persuade customers to purchase a higher-end product, an upgrade, or an additional item in order to make a more rewarding sale. For instance a salesperson may influence a customer into purchasing an iPhone 5S, instead of an iPhone 5, by pointing out its additional features. "And this over here is our super deluxe model." A similar marketing technique is cross-selling, where the salesperson suggests the purchase of additional products for sale. For example, he might say "Would you like some ice cream to go with that cake?" It is beneficial for businesses to use both techniques in order to boost revenue and provide a valued consumer experience. However, research has shown that upselling is generally more effective than cross-selling (Lazazzera, R.,2015, March 4).

Many companies teach their employees to upsell products and services and offer incentives and bonuses to the most successful personnel.

A common technique for successful upsellers is becoming aware of a customer's background, budget and other budgets, allowing the upsellers to understand better what that particular purchaser values, or may come to value.

Another way of upselling is creating fear over the durability of the purchase, particularly effective on expensive items such as electronics, where an extended warranty can offer peace of mind.

It can be hard to divorce all three techniques from each other, given that the difference in each technique is minor. All techniques adopted and effectively practiced within firms are important strategies that are used for increasing revenues among current customers.

An add on sale can simply be defined as a sale of additional goods or services to a buyer. In practice an add-on sale can be seen in a retail scenario; a customer could be buying a suit for a new job, after the sizes and colours are to the customers satisfaction the seller would assume that they would also need shoes, socks, a waistcoat and a belt to go with. This is a sales technique where by the seller is trying to encourage or persuade the customer to buy something extra, that may or may not be more expensive, but will still bring up the total amount of the sale. An add on sale is much more simpler than a cross sell or an up sell, this is because the new item that the seller is exposing the buyer to may cost less than the product they are purchasing, however the downfall of this technique is that saying “no” to the product being presented is more frequent. Usually two for one deals or “buy one pair and get the second pair half price” deals are the most common ways to transition your sale to that of an add on. From a customers point of view, adding on can be seen as the seller trying to make the buyer spend more money to bring up the point of the sale. This is why adding on can be difficult, familiarity and relevance of suggestions is important, you want to make sure that the items being shown still match the customers’ initial thoughts and ideas. If they do not there is a high chance of losing the sale.

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Wikipedia