While many sellers struggle with cross-selling, just as many are struggling to “up-sell.” First, let’s level set on terms:
- Cross-selling is getting an existing customer to buy into an additional or new product or service. In other words, the seller is securing a new revenue stream.
- Up-selling is getting an existing customer to buy an upgraded or enhanced product or service. In this case, the seller is finding a new revenue stream that will cannibalize the previous revenue stream.
Both cross-selling and up-selling have their challenges. Commonly, cross-selling challenges exist because the seller must know multiple product lines and the buyers of each product may be different. Comparatively, up-selling challenges are a bit unique. Up-selling exists within the same product line and often attracts the same buying group. However, the challenge is the notion of selling change versus selling the status quo.
Cross-selling is similar to “new selling” as it’s about change. The seller is selling the notion of something better. An existing problem or new opportunity is better managed with this new product or service. Conversely, re-selling – or the process of getting a customer to buy more of the same – is selling the status quo. The up-selling challenge is that it’s a little bit of both. The seller needs to promote the idea of some change without diluting the merits of the existing product line. Undoubtedly, the seller wants to create demand for something new without putting the underlying re-sell opportunity at risk.
Up-selling Best Practices
So it may not need to be said, but up-selling has many upsides. Most notably, up-selling can strengthen relationships, increase customer retention and expand margins. Plus, the costs of securing up-sell revenue are typically much less than finding new- and cross-sell revenue. Here are some best practices to consider as you work to get your sellers to focus on this critical priority:
- Understand buyer needs and conduct joint account planning when it’s economically feasible
- Leverage tools and technology to improve guided-selling practices
- Develop skills to find and manage up-sell opportunities
- Include up-selling as a key part of seller coaching
- Reward and recognize success
- Leverage win/loss reviews and competitive intelligence to identify what’s working
Importantly, sellers must not get too pushy with up-selling as it can erode buyer confidence and damage the relationship. If and when buyers are not interested in the up-sell options, sellers can pre-showcase the value of enhanced features and identify criteria when these features may be more compelling – e.g., “the next version has some enhanced security features that will be more relevant when …”
Up-selling should be a key pillar to strategic sales planning and an excellent source for growth from the existing account base. Sales leaders should take a holistic approach to overcome the up-selling challenge and fully realize the up-sell potential.