Upselling is a sales tactic trying to get customers to purchase an upgraded version of the item that they are already considering purchasing.
“Would you like to supersize that?”
A seemingly innocuous phrase - one that you have probably heard most times you placed an order at any McDonald’s – the majority of times in which you probably ended up getting the larger size, right?
However, this phrase is more than what it appears to be – in fact, what it is, is an example of a loaded sales tactic known as upselling. But what does upselling mean?
By definition, upselling is a sales tactic that tries to get customers to purchase an upgraded, more expensive, or premium version of the item that they are already considering purchasing.
It is often considered a risky technique, since it can come off as being pushy or demanding too much from a customer. The last thing you want is to either jeopardize the chance of closing the sale or lose the opportunity to create a long-term customer. However, upselling, if done right, can be an extremely valuable tool in the marketer’s arsenal.
Many companies successfully incorporate upselling into their sales strategy. For instance, offering a customer buying a flight ticket the chance to upgrade to Business Class, selling them a premium version of a software vs. the basic package, or suggesting that they buy a higher model mobile phone with increased storage – these are all examples of upselling in action.
The objective of upselling is to increase the order value and bring in more revenue for your business. There are a few reasons why upselling is so important for marketers:
While both, upselling and cross-selling aim to achieve the same objectives, i.e. helping customers get more value from your business, and helping your business to increase revenue, the main difference is that upselling tries to convince customers to buy an upgraded version of the same product, while cross-selling focuses on selling related products or services.
So, with respect to the McDonald’s situation – “Would you like to supersize that?” would be considered upselling, while “Would you like some fries with that?” is an example of cross-selling.
The terms are often used interchangeably, but in reality, upselling is actually considered the easier of the two tactics to pull off, since it is easier to sell something related to what the customer is already considering buying, versus something related, but still different to what they are buying.
To increase your chances of upselling, you can incorporate meaningful product recommendations at every step of the purchase funnel.