The upsell is a simple yet massively potent sales technique that boosts revenue by 10-30% on average.
Upselling is also nearly 70% more affordable than acquiring a new customer.
Here’s a rundown on what an upsell is and how to perform it like a boss.
Simply put, to upsell is to offer a customer a more expensive alternative of a product or an add-on.
Not to be confused with cross-selling, which involves trying to sell an additional product, upselling focuses on generating more revenue by convincing a customer to buy a higher-end product that they might not be aware of.
An Upsell Example
In the SaaS world, this might be encouraging someone to purchase an upgraded or premium version of a software.
Say for example, a Chili Piper customer was about to purchase our Meetings platform with Concierge, which helps convert more leads into meetings with inbound scheduling automation.
If they had 10 users and bought Concierge with scheduling only, it would cost $450 per month.
But, if they upgraded to Concierge with scheduling + live calls — a feature that helps companies instantly connect with hot leads — it would cost $600 per month.
By making an upsell, Chili Piper would be able to increase the order value by $150 per month, totaling $1,800 per year.
When done at scale, this can have a huge impact on profits.
What I really love about upselling is that it doesn’t require you to hunt down more leads.
You’re simply capitalizing on existing customers and increasing your average order value (AOV).
And this is important, given there’s a 60-70% chance of selling to an existing customer and only a 5-20% chance of selling to a new prospect.
How to Upsell
Now that we know exactly what upselling is and have seen a real-life example in action, let’s jump right into the meat of this post.
Here are some ultra powerful techniques to help your sales team get the most out of upselling.
Upsell Tip #1: Make Sure the Upsell Fits the Customer’s Specific Needs
Let’s start from the top. Relevancy is essential here.
You can’t expect a customer to be interested in something that’s completely irrelevant to what they’re buying, so you need to ensure that it fits their specific needs.
Let’s go back to my Chili Piper example for a second.
If someone is already buying Concierge with scheduling only, it’s not a stretch to think that they would be interested in adding scheduling + live calls.
That would be a logical upsell and one that a rep could seamlessly slide into the conversation or could be added to the sales page.
What you wouldn’t want to do is try to upsell a product that’s completely irrelevant to what a customer is buying in an attempt to make a cash grab.
That’s only going to create friction that not only kills the upsell but can make a customer rethink their initial purchase.
But as long as the upsell is relevant, you should be in good shape.
Upsell Tip #2: Don’t Go Crazy with the Price Increase
Another big part of closing the deal is being reasonable with the upsell amount.
By this I mean not jacking up the price to an astronomical number that’s going to send a customer running.
With the Chili Piper example, the price of the original Concierge product with scheduling only was $450.
The suggested upsell of Concierge with scheduling + live calls was $600 — a 25% increase, which is a number most customers would find reasonable.
In fact, Bob Phibbs of The Retail Doctor, recommends keeping an upsell at 25% or under.
In turn, a decent chunk of them should be interested in paying for the upgrade.
But if we cranked the upsell up to a much higher number like $900, the conversion rate is going to plummet because it’s too big of a jump from the initial $450.
The point here is that you shouldn’t go crazy with the price increase and keep it to a reasonable limit.
Of course the word “reasonable” is inherently subjective, and some experts like Ben Brown of Bitcatcha say that you can realistically increase the price by as much as 40%.
That’s why I suggest doing some testing with your upselling to find the sweet spot.
This will allow you to refine your offerings so that you find the perfect balance to maximize your AOV without scaring anyone off.
Upsell Tip #3: Upsell over email
Some sales professionals shy away from using email when conducting upselling.
In reality, email is where most upsells happen.
The sales team at Chili Piper uses a combination of Zoom calls, Slack messages, and emails to conduct cross-selling and emailing.
Again, it’s a customer-specific thing, but many people actually prefer to close sales over email.
Upsell Tip #4: Don’t Overwhelm Customers
Put yourself in the shoes of your average customer for a second.
They’re on board to buy from you and are still digesting the details.
Then, you hit them with an offer to buy a more expensive, alternative version of the product, and a sales rep barrages them with a laundry list of features, launching into a long-winded monologue.
This forces the customer to absorb even more information on a different product when they’re still trying to sift through information on the initial one.
Needless to say this can be overwhelming, which is going to lower the chances of a successful upsell.
That’s why you need to be careful not to throw too much at them at this critical point in time.
Instead, you should develop a framework that allows you to smoothly transition to discussing an upsell without information overload.
If a Chili Piper rep was trying to upsell Concierge from scheduling only to scheduling + live calls, they might say something like this.
“Scheduling is great for automatically distributing leads. But if you really want to increase your speed to lead time and heat up your inbound lead conversion, you should consider scheduling + live calls.”
“This allows you to instantly route live calls to a qualified rep, so you can connect with leads when they’re sizzling hot. You can even launch video chat for a virtual face-to-face conversation.”
Notice that this pitch doesn’t turn into a lengthy discussion that gets into a ton of gory details.
It simply lets the customer know about a more robust option and offers a quick overview of its capabilities.
In turn, this helps a rep get their foot in the door so they can segue into a deeper conversation if the customer is interested.
But it doesn’t overwhelm them with excessive information, which brings me to my next point.
Upsell Tip #5: Offer a Quick Comparison
I find that another effective way to break everything down so that it’s easily digestible is with a quick comparison.
This shows how the two versions of your product differ so the customer can get a bird’s eye view and make a well-informed decision.
If you’re doing this through a product page on your website, you could create a side-by-side comparison like this from SEO platform Ahrefs.
So, if Ahrefs was trying to persuade a customer to upgrade from their “Lite” package to their “Standard” package, they could direct them to this page for a quick rundown.
Or, if you’re upselling over the phone, you could create a script where reps explain the key differences based on a comparison like the one above.
The trick is to make the information digestible so customers have a clear understanding of the value they’re getting by opting for the more expensive option, while preventing any unnecessary confusion.
Upsell Tip #6: Have a Rapid Fire Response for FAQs
Any time you encourage a customer to buy a costlier version of a product or an add-on, questions will inevitably arise.
The better and more efficient you are at answering those questions, the stronger your chances of making an upsell become.
That’s why I suggest having a list of answers for FAQs on standby, so customers can have their questions answered without delay.
For instance, on the Chili Piper Pricing page, we have an FAQs section that succinctly tackles topics customers want to know about, such as how long it takes to set up the platform, info on training and support, how the number of licenses are calculated, and so on.
I suggest doing something similar on your product page and providing your reps with a list of answers for FAQs they can reference during conversations.
Upsell Tip #7: Anticipate Objections
In addition to questions, many customers will have some sort of objection in this scenario, with the most common simply being that it costs more than what their original purchase was.
Besides that, customers may:
- Want to talk it over with their team before greenlighting the upsell
- Want to think about it before making their final decision
- Say they’re happy with their current product and don’t need the upsell
- Not want to deal with figuring out how the alternative works
Leslie Ye of HubSpot created a comprehensive list of 40 common sales objections that really shines light on this topic.
The key is to identify the main objections you’ll encounter when attempting to upsell and figure out specific techniques for overcoming them.
For example, if a customer says that it’s too expensive, Ye suggests focusing on the product’s value and succinctly explaining how they’re winning in the long run.
Knowing how to respond in these situations lowers the likelihood that your reps are caught like a deer in the headlights, allowing them to put any reservations a customer may have to rest.
For more on perfecting the art of overcoming objections, check out this video from Marc Wayshak of Sales Insights Lab.
Upsell Tip #8: Offer Social Proof
My final strategy for mastering the upsell is to validate the upgrade through social proof.
“92% of people will trust a recommendation from a peer,” so showing a customer that other brands have benefited from the product is huge for getting them over the buying hump.
There are a few ways to go about this.
- Point customers to ratings or reviews
- Use testimonials
- Let them know the number of people that are currently using the platform (e.g. 15,000 users)
But one of my personal favorites is to use case studies.
First, a case study shows firsthand the impact your product is having for other customers.
Take this example from Chili Piper involving online project and contact management platform Apollo.
It discusses how Apollo was failing to capitalize on their demo requests, which led to about 40% of those requests not converting into booked meetings.
But after using Concierge from Chili Piper, Apollo was able to greatly improve their sales funnel and “saw an immediate 50% increase in inbound meetings booked on their site.”
This instantly legitimizes the product and lets customers know that it works for other brands, so it can work for them as well.
Second, case studies are ideal for including concrete data to quantify a brand’s success.
Take these stats from Apollo, for example.
Knowing precisely how big of an impact Chili Piper has had for other companies is insanely helpful for upselling and makes customers take your upgrade suggestion more seriously.
Third, case studies help connect the dots.
For this particular case study, there’s a video featuring Krishan Patel, Director of Growth at Apollo, explaining what his sales pipeline was like before and after implementing Chili Piper.
He specifically mentions how Apollo was able to make their pipeline more efficient and convert far more inbound leads into meetings.
Providing information like this is often just what you need to take an existing customer from being slightly interested to completely on board.
And while it does take some time to put a case study together, I find that’s totally worth it, and it’s the perfect weapon for adding to your upselling arsenal.
Check out this guide from Braden Becker of HubSpot for everything you need to know about case studies and how to get started.
What’s the definition of upselling?
When you upsell, you offer a customer a more costly version of the product or an add-on.
How does it differ from cross-selling?
Cross-selling is where you offer a customer an additional product, whereas upselling is where you attempt to sell a more expensive alternative.
What are the main benefits of upselling?
- Increase your AOV
- Capitalize on existing customers, rather than having to generate new ones
- Existing customers are more likely to buy
- Boost profits
- Create more value for customers
How much can upselling increase revenue?
Most brands increase their revenue anywhere from 10-30% on average.
Putting Upselling to Work for Your Company
You’re far more likely to sell to an existing customer (there’s a 60-70% chance) than a new prospect (there’s only a 5-20% chance).
It’s simple mathematics
So learning to properly upsell is a no-brainer.
The tips listed here highlight the vital techniques needed to get more customers on board, raise your AOV, and send profits soaring.