The secrets of successful CLM implementations
The secrets of successful CLM implementations
While most companies invest a lot of marketing and sales enablement dollars into increasing lead flow or close rates, driving upsell and cross-sell rates is often overlooked. Which is a huge miss, because increasing the dollar amount of your deals is actually one of the easiest ways to grow revenue.
Did you know that up to 60% of customers who’ve committed to a sale will make another last-minute purchase when offered?
“When offered” is a key part of these statistics; you can’t expect your customers to know the benefit from the additional item or product upgrade if you don’t inform them. That’s why systematic upselling and cross-selling should be a part of your sales playbook.
In upselling, the sales representative is trying to add value to the current product or service that the customer is already using or engaged in. Upselling isn't concerned with the customer purchasing an additional product, but to provide a higher-end version. With cross-selling, a sales rep may want to pitch another product that compliment the current offering at hand, so recommending another product an additional product is needed. Besides from the obvious benefits of a larger sale – profit generation or greater product or service value – upselling and cross-selling both have their unique benefits.
Upselling provides higher quality to the overall purchase. For example, while a hamburger might be delicious, a Big Mac comprised of a double layer of beef will keep you feeling fuller longer and hit the spot more so than a simple hamburger can. For your reps, efficiency is one of the greatest benefits of upsell. It’s easier to get someone to buy something more once they’re already in the mindset. Now, your reps are spending less time on low yield activities, such as prospecting, and more time on creating bigger deals, thereby increasing profit margin.
Cross-selling provides additional quality to the original order too. A classic example is that Big Mac might taste even better with a side of fries to go along with it. If your reps can pair a high-margin product, such as a cell phone, with a low-margin offering, such as a phone case or charger, they easily increase the overall profit margin of the deal.
Remember what the customer wants.
Your customers are looking for a core set of features to make their lives better; sell them these key features, and then an upgrade of some sort, but don’t forget the essential capabilities your customers are looking for.
Push for the small difference.
Upselling works best when the price comparisons between the original product and the “value-added” product aren’t too drastically different in price. When there’s only a small price difference between the item your customer is looking at and the product you’re suggesting, they will be more inclined to upgrade.
Know your customer.
Make it easy for your reps to understand which products are best for upselling. Give them the resources to know what types of prospects can be upsold to or what types of products are more likely to be purchased in the upgraded edition; there are even tools out there to automatically provide this information to your team. By utilizing your purchase data, your reps can easily and more effectively upsell!
Know your customer, even more.
Like upselling, it’s important for your reps to be equipped in order to create the optimum cross-sell product or service package. Inform your reps on which products are more likely to be sold together so there’s no questions about it. You can even take the next step and, if there are some cross-sell combinations that customers always buy, formalize the cross-sell by making a bundle for your reps to sell. Or, offer a discount for buying products together to encourage customers to buy more.
Watch the price.
Like upselling, price is a factor with cross-selling. Cross-selling tends to be more successful when suggested products or services are half-price or lower than the item being purchased.
Achieve the optimal upsell and cross-sell.
No matter if you’re upselling or cross-selling or both, remember to track data. When is the best time in the purchasing decision process to suggest a cross-sell or upsell? What products pair well for cross-selling? What features drive your upsells? How do these techniques affect your revenue? With the efficient and automated tools out there, it’s easy to track these metrics in order to refine your selling techniques and have the most profitable sales cycle yet!
If the upselling and cross-selling methods have got you confused about which products to start with or you have little confidence your Sales reps are capable of making the correct recommendations, guided selling solutions exist to get you upselling and cross-selling in no time.
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