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Master the Art of Upselling, Upgrades, and Add-ons

Written by Julie Dietz on May 3, 2016 at 8:30 AM

Learn the best ways to pitch upsell, upgrade, and add-on offers to your customers.

If you were brainstorming a business plan, what would it include? An exceptional product? A killer design? A team that runs like a well-oiled machine? If you're a savvy business person these things popped into mind, but so did marketing, sales, and revenue goals as well.

The importance of sales and revenue cannot be overstated, and for many businesses sales goals are right at the top of the list. In fact, according to HubSpot 73% of executives and 80% of non-executive directors and VPs said that growing sales and closing deals was their top priority.

With such a large emphasis placed on revenue, it's important for sales people and account managers to make use of all sales offers, including upsells, upgrades, and add-ons for current customers. While companies spend most of their resources on bringing in new customers, most companies have a significant opportunity to increase revenue by selling to people that already have a relationship with your organization. According to some studies, these customers can generate up to 67% more revenue than new customers.

Unfortunately, even loyal customers aren't likely to make repeat purchases if you shower them with general marketing messages and bothersome sales calls. Customized upsell, upgrade, and add-on offers based on customer interests and activity data from online community platforms, emails, and support conversations are more effective in getting customers to respond to calls to action.

To help you master the art of crafting customized sales offers for existing customers, let's take a look at each type of offer, when to use it, and how to pitch it.

Offer 1) Upselling

Upselling is when you offer a more expensive product from the same product line as what your customer already owns or has decided to purchase. For example, an appliance company could upsell a customer that purchased a miniature refrigerator by offering a full-size refrigerator-freezer combo. Both items are in the same product line, but the upsell offer provides additional value and generates more revenue for the company.

When used at the right time upselling can be incredibly effective in increasing revenue per customer. To make the most use of upsells, focus on customers who have already purchased one item and love it. Customers who post positive reviews about your products on your website or in your online community are good candidates.

Once you've identified your best upsell opportunities, make sure to pitch the offer correctly. Start by focusing on your customer's past purchase, reminding them of what they love about it. Explain how the upsell product builds on those features, is more efficient, or adds new functionality.

By choosing the correct customer, highlighting what they love about the old product, and then explaining how they can get more value by making an additional purchase, you'll have the best chance at successfully upselling them.

Offer 2) Upgrades

Unlike upselling, upgrades do not focus on a different product, they focus on an updated version of the same product. You could upgrade from operating system 1, which was created in 2010, to operating system 2, which was created in 2015, for example. The product is the same, but the version is different.

The best times to offer upgrades are when they solve a problem or save your customer money. This often happens when products become obsolete. For customers in this situation who have a base product that doesn't need to be fully replaced, offer an upgrade at a discounted price to bring the original product up to date. The upgrade solves the problem of an obsolete product, and also saves money by providing a discount for the customer.

Other times to make upgrade offers are when your customers want increased functionality that upgrades can provide, or when you're running a promotion. Promotions are compelling deals that help customers decide to change or update their products, and are enticing because they save customers money.

In each of these situations, emphasize how an upgrade will solve your customer's problem or save money in the long-term. Using the product as a solution for your customer is the strongest pitch, but saving money can also be compelling, and both illustrate the value your organization provides.

Offer 3) Add-ons

As the name implies, add-ons are additions to current products. They're often labeled as accessories, and cannot stand alone. Plug-in credit card readers are a popular smartphone add-on, for instance.

The main purpose of add-ons is to provide supplementary functionality and increase the value of a product. When your customers' online activity indicates that a customer wants to use their current product for new purposes, such as using their smartphone to take credit card payments, then it's time to offer an add-on.

You can offer add-ons any time a customer asks about a function or use that their current product doesn't have. If an affordable add-on can provide what the customer needs, then it's likely that you'll make a sale.

You can also offer add-ons at the end of conversations between your team and your customer. In this case, after your customer has talked with support or sales, suggest an inexpensive add-on to improve their current product's value and functionality. In both types of pitch, emphasize the additional value the add-on provides, how easy it is to use, and affordability.

Upsells, Upgrades, and Add-ons Takeaway

Incorporating all three of these offers into your sales tactics helps to increase revenue per customer. Just don't pitch all three offers in one conversation. You need to specially tailor your offers to provide additional value and create win-win situations for your organization and your customers.

Start by crafting custom offers using customer activity data from your online community platform, email website, and other customer interactions. The better you understand your customers' interests, the easier it will be to choose the one offer that best suits each customer.

Explain how your offer solves the customer's problem or adds value, and remember that this is the most important part of your pitch. Only after this should you use affordability and price as the icing on the cake.

With this method, you'll set yourself and your organization up to successfully generate more upsell, upgrade, and add-on opportunities from your customers, leading to increased revenue.

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Topics: B2B Communities, Customer Success, Marketing Automation, Online Community

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