Up-sells are offers made to customers for larger, more expensive products and services.  Many business people think up-sells are bumps, but in reality an up-sell is the process of persuading buyers to purchase either a premium version of the same product or an additional premium package of products or services.

The key to effective up-selling is in the “value quotient”.

The value quotient states that:

Value = Perceived Benefits / Price.

When price stays the same and the perceived benefit goes up, value goes up.  The process of up-selling attempts to increase the perceived benefit more than the increase in price, resulting in an increase in value and hopefully a successful sell-up.

Let me give you a few examples.

Suppose your customer enters your hot tub store and wants to buy a $4,000 hot tub.  As an experienced up-seller your next move should be to introduce them to the $6,000 model and by explaining all the added benefits of the premium model and make an offer than includes better payment terms (i.e. for only $15 more a month you can own…) and a host of additional accessories as a free gift (stuff they would have purchased with the smaller hot tub).

The goal is to add so much value that your offer becomes irresistible.  But don’t get greedy.

Up-selling to a Package of Products

Perhaps you have a higher priced product or service package (and I hope you do).  Why not offer your customer the entire package?  The following are a few examples of single products and potential packages:

• Oil change> Total Engine Service Check-up Package
• One DVD> Monthly All-You-Can-View DVD Continuity Package
• Tax Return> Comprehensive Personal Financial Analysis
• Dinner> Multi-Item Coupon Sheet
• Hot Tub> Premium Hot Tub
• Holiday Package> Hotel Upgrade + Additional Activities

The idea is to create higher priced upgrade packages that are offered at a discount of what they would normally cost.

As with bumps, your up-sell strategy should be pre-planned by creative incentives for your salespeople to close the up-sell offer.  Put some thought to your incentive program because without it, your up-sell program will fail.

Other Ways to Offer Up-Sells

There are many ways to offer up-sells other than in person.  An interesting way to offer an up-sell on your website is to send your visitor to an up-sell webpage after they have clicked on the “Buy” link.  On this page you can place a short sales letter upgrading them to the premium version of what you’re selling or simply selling an additional but complimentary product.

If you’re using direct mail you can put an up-sell offer in a second envelope that goes inside the main envelope.  This creates intrigue and separates the main offer from the up-sell offer.

Every time someone buys from you, why not include a sell sheet or catalogue inside the product package that you are sending to your customer?  (In a retail shop, it is commonly called a bag stuffer!)  This allows your customer to look over and purchase even more products from you.  If they’ve bought from you once they are likely to do it again.

Once your customer has purchased from you, put them on a scheduled follow up direct mail program that triggers a direct mail letter to be sent at preset time intervals.  So let’s suppose your customer purchased a lawnmower from you.   After the purchase they will get an offer for an additional bag one week after the sale, an engine cleaner the second week, a mower cover the third week – you get the idea.

Can you afford not to upsell?