Big Ideas Blog

I was browsing the internet and I ran across a great article on Inc.com that relates to small business upselling. The opening paragraph of the article read this:

“If you’ve ever tried to explain the concept of “make new friends but keep your old ones” to a five-year-old, you have a pretty good perspective on how many high-growth businesses approach customer acquisition and retention.  Growing businesses tend to spend so much of their time and money acquiring new customers that they often overlook their best source of growth: retaining and growing their existing customer base.”

Aside from the hilarious picture that popped into my head of me trying to explain the concept of “make new friends but keep your old ones” to a five-year-old, the last sentence in the excerpt really stuck out to me. The fact that growing businesses tend to spend much more time focusing on getting new customers versus delivering satisfaction to their current customers inspired me to write this post.

According to KISSmetrics, a leading web analytics solution, companies focus on acquisition more than customer retention, even though it can cost 7 times more to acquire a new customer. KISSmetrics also pointed out that 63 percent of marketers felt that new customer acquisition is the most important advertising goal.

Although a major piece of a thriving business is driving new business, offering personable, reliable and consistent customer service while encouraging your customers to make larger purchases every time they buy and to keep coming back for more will be big (less expensive) wins for your company.

Let’s talk about why doing what you say you will do when it comes to your customers is crucial to an effective upsell strategy.

Always Strive to Deliver and Satisfy

Your customers want to know that when they email you or send you a tweet or pick up the phone to call you with a problem that you are going to do three things: be personable, reliable and consistent. Each individual customer wants you to understand their issue, give them the right answer to solve their problem and always be there to help them. And frankly, not a lot of businesses do that well. Back to some statistics from KISSmetrics, 71% of consumers have ended their relationship with a company due to poor customer service and 61% of consumers take their business to a competitor when they end a business relationship. It’s like a real relationship and if you aren’t a personable, reliable and consistent partner, you are going to get dumped and left for your archival.

Customer service is not about throwing around a discount here and there, either. People want to feel a personal connection to your brand. I research the heck out of anything new I’m considering buying. I ask co-workers, friends and family, a read reviews on Amazon, I go to a company’s website and read about their purpose, values and mission (bad news if they don’t have that). When I find a company I have a personal connection with, a majority of the time, I buy from that business – which might not always result in getting the cheapest price or the most popular item.

Apple does a phenomenal job of this. I’m married to all my Apple products and I’d shout from the roof tops about how personable, reliable and consistent their customer service is. And being a pragmatist, you’d think I wouldn’t just go out and upgrade to every new version of the iPhone without thinking practically about it, but I do. I don’t even shop around. They are the ultimate champions in customer relationship loyalty with over 60% of their current customer base recommending Apple products to others.

Next, let’s talk about how you get your customers to buy more now.

By More Now = Increase Transaction Size

Small business upselling is really broken into two parts. This first component is focused around growing the amount your customers spend with you per purchase now – also known as increasing transaction size or what I like to call the “Would you like fries with that shake?” model.

If you sell products or services online, you can facilitate this process really easily right in the shopping cart (in-cart upsell). After someone has selected to buy and is ready to pay, ask them if they’d like to add-on a product or service to their purchase that is relevant to the initial product. Keep in mind, lower priced items work more effectively. So, if you sell jewelry and a customer is ready to buy a necklace from you, offer them a pair of earrings that matches at a discount if they them buy now.  If you are brick and mortar, you can do this at the register.

Online, you can also take another approach called the 1-click upsell. This model displays the add-on option on the success page of the cart versus before they have entered their form of payment. Just before they confirm their order, you can ask them if they’d like to add on relevant products or services. Sometimes this model can be more effective because they are a step closer – more committed to the sale because they have already submitted their payment information.

By More Later = Increase Sales Frequency

The second component of small business upselling is targeting future purchases from your customers – getting them to spend money more often. But, after they have already purchased your product or service once, how to do you get them to buy it again?

Whether you sell products or services online or out of a storefront, you can set up upsell follow-up sequences. This means, you can put an email marketing strategy powered by automation in place to follow up with customers at a certain amount of time after their first purchase. Even if you are increasing the size of each of your transactions, you are missing out if you haven’t implemented a strategy into your follow-up marketing that keeps people engaged and encourages repeat sales.

In a follow-up upsell strategy, because the buyer is not in the cart area or in your store purchasing at that moment and may not be in the buying mode, you have to tailor your copy to bring people back and remind them why they purchased in the first place.

The way to start this process is to make sure that you create a very easy and clear way for people to opt in to receiving your offers.

Once you have that information and they have made a purchase, you call follow up with emails to them that offer them products or services that are relevant to their most recent purchase. Same concept at increasing the transaction size but, you are just pushing the messages out over time.

Rewards programs can be effective, too. The more someone buys from you, the more you reward them. Set up a loyalty system where customers can keep track of how much they have spent with you and how many rewards points they have available to use.

Remember, two ways to add money to your bottom line besides getting new business is getting your customer to pay more at the time of sale and by getting them to buy more later on.

Download Infusionsoft’s e-book “Deliver. Satisfy. Repeat.” for getting customers not just to buy, but to keep coming back for more!