Your Business: Upselling Strategies

Be sure your sales team understands the “why” and “how” of your customers’ decisions


I frequently have discussions with business owners and CEOs who are frustrated with the effectiveness of their sales teams. They generally have two complaints, either that their sales team just sells the quick and easy thing (and usually at a discount) or they don’t know how to close effectively. The former concern is commonly known as not being able to upsell.

It is no secret that the ability of a salesperson to effectively upsell can dramatically impact a company’s bottom line. For example, increasing your average RMR per location by just $1.00 can substantially impact the value of your company. Let’s say you have 10,000 customers and your average RMR is $35 — by selling something to every single customer at an increment of just $1 more, you have increased the value of your company by $400,000 to $500,000, assuming a valuation of between 40x and 50x RMR. With impact like that, it is critical to look at the sales team’s ability to sell more services when they have the opportunity.

 

No One Likes Being Sold More Than They Need

From a long-term perspective, it is damaging to strong-arm customers into buying what the salesperson wants them to buy just to increase the sale; in fact, if a salesperson follows a process intending to sell every single customer something more, he or she will likely have higher attrition rates and lower referral rates. The customer won’t feel great about all the bells and whistles they bought and won’t feel as if they are getting appropriate value for what they are paying. And why should they — the salesperson sold them on something they do not truly need.

Everyone benefits when salespeople refrain from selling a set base package, and then upselling additional services. Weak and lazy salespeople like to have a standard “go-to” package, because it makes them comfortable. They can describe everything in the package, and frankly they don’t have to think too much. They can just say “This is our most popular package,” and hope that the prospect buys. Often, companies are successful with this model, but when owners want increased RMR per location they require salespeople to upsell which can be counterproductive. The word alone seems to signify that it is outside the norm.

 

Why The Upsell is Difficult

There are several reasons why it is difficult for salespeople to upsell effectively. Here are three of the most common causes:

1. Need for Approval: This weakness causes salespeople to be reluctant to push a prospect and say or do anything that might make the prospect uncomfortable for fear they will lose the deal. So when they get the prospect to say “yes” to something, they take it and run, regardless of how much the prospect might actually need additional services. They are fearful of being pushy, offensive, or overtly “salesy.” These people will miss out on a tremendous amount of business.

2. Lack of Emotional Control: In a selling situation, a salesperson that lacks emotional control can get off track or easily derailed. When they hear that the prospect will actually buy something, they get excited, lose focus on the prospect and sales situation, and frequently do not stay in the moment long enough to ask questions that will enable them to “upsell” additional products and services.

3. Money Issues: Salespeople that are frugal, or very cost-conscious themselves may not be able to sell based on value, because they are always concerned with price. When salespeople suffer from these money issues, they have a tendency to sell the cheapest thing — the base package. They have difficulty selling anything but the base package because they themselves are always looking for the cheapest deal. They therefore believe everyone else buys the same way.

These three weaknesses cause salespeople to operate less effectively across the board and not only miss out on upselling opportunities, but also be less effective closing business in general.

So, what can you do?

 

Overcoming the Difficulties

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