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How to Create an Up selling Advantage for your Business
By Abe Cherian
? 2005
Up selling your customers is simply providing the next
logical solution to your customer”s next logical need. It”s
your job to always create that next logical need and
continually sell and sell. There”s always one more thing to
sell.
One of the major mistakes I find in dealing with small
businesses is that they believe once their business has
provided their product to the customer, that”s the end of
the process. There”s nothing that can be more wrong with
your business.
Every sale needs another sale because every need that”s
satisfied will create still another need sometime in the
future. The conclusion that you should draw is that you
must create the up sell and continue creating up sells as a
never ending logical step in the launching of an effective
marketing mission.
You might say, I don”t have any product or service to sell
as an up sell. My answer to that is, develop one.
Even if you don”t produce the product or service, someone
else does and that someone else gladly will pay you for
allowing them to get at your client base so they can up sell
your customers. There”s always something else to sell them.
The practical implications to up selling will most likely
result in forming joint venture relationships. Businesses
today operate differently than it ever has.
Another good example can be seen in the mail order flowers.
On the average, there”s actually 6-10 days from the cutting
of a flower before a customer receives it and puts it in a
vase in their home, whether as a gift or simply to brighten
up their home. The lag time is caused by the traditional
distribution system of wholesalers distributors and
retailers. A real entrepreneur working literally years on
an idea for flower delivery up to 9 days, created a direct
from the grower to the customer via Federal Express. Today
that generates $10,0,000 in sales. What was the
entrepreneur”s product? It was an idea worth $10,0,000.
That business is merely a series of relationships between a
catalogue company, Federal Express, and several independent
flower growers throughout the United Slates. It”s a
business of joint ventures. Even though this guy didn”t
actually have the product or service, he created one.
This leads to find Your Business Within Your Business. A
real powerful concept is to challenge yourself, your
clients, vendors and employees to constantly search for new
businesses within your business.
There are an unlimited number of offshoot businesses you
can create. You could have an offshoot of consulting to
those people that you sell to. You could then communicate
and market and also do seminars and workshops.
For car dealers, they would provide extended warranties and
insurance to new car owners. For a contractor, whether it”s
heating and cooling, pools, pest control or whatever, they
can also provide annual service contracts.
An example would also be a pool contractor for instance
might use up selling through the offering of an annual
service contract to clean and service a pool four times a
year. This can dramatically improve his bottom line. In
fact, this can actually double the value of the customers
by added income of 40% to you while they sign an annual
contract.
Let”s say the service call for a pest control or a pool
service call is $100 and there are 100 customers per year.
There”s a gross of $10,0, which is $100 per customer. The
Up sell strategy is an annual contract where you”re going to
visit four times a year. The cost for each visit to the
customer is $100, so the total cost at this point is $400
(before giving a discount).
If they buy today, you give them a discount of $150, of
which $250 is the cost to the customer. If you close just
40% of these people, your new revenue is $10,000. 40% of
100 is 40 people times $250 which is the cost of the annual
contract.
So, the new value of these 100 customers is $20,000 $10,000
for the service call ($100 x 100 customers) and another
$10,000 for the 40 people who paid $250 for the annual
contract. The value per customer is now $200. You made
$20,000. You still have the same 100 customers. They”re now
worth $200. That”s double the value.
What service can you up sell to your clients? Virtually
every business can add a newsletter or an extra month of a
diet plan for half the original price. Maybe a consulting
service could be provided. The possibilities are endless.
Let your creative mind work for your business instead of
limiting to just one product or service.
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