One of the best small business marketing tips is part of the basic “how to sell” strategy: the importance of upselling to existing customers. A Gallup Global Management study concluded that it costs five times more to win a new client than it does to serve an existing client.
If you apply Pareto’s Principle to business, 80% of your business comes from 20% of your customers. Upselling to your existing customers is the most cost-effective way to boost your revenue.
When you focus on how to sell to your existing customers, you eliminate the high cost of growing new clients and you establish a relationship with your existing customers that makes it easier to upsell in the future and helps you retain customers longer-term.
Top Strategies for Upselling to Customers
- Know what they need
Put some thought into what your customers need when they make a purchase. Are there any accessories you can offer? A warranty? Something that other people commonly purchase at the same time? After selling once to your customers, you know what they need – use this data to make a useful combination of products or services that appeals to the specific customer you’re attempting to upsell.
- Offer solutions or make emotional appeals
Depending on the type of product or service you offer, you’ll need to offer solutions or make emotional appeals to your customers to upsell effectively. Offering solutions is the simplest, most logical way to upsell. However, you can also use an emotional appeal to upsell – particularly if you time it right, and with certain customers. Learn what works best for your customers and product, and then do it.
- Educate your customers
In some cases, how to sell more to your customers all comes down to educating your customers. Maybe your customer doesn’t know that he also needs Y to go along with X. Or that to achieve his goal, Y will serve him better, even if he thinks he needs X. Educating can go hand-in-hand with upselling to customers.
- Provide cost vs. benefit analysis
If your upsell provides a benefit, you should make that clear to your customer. This is a particularly helpful strategy in high-cost upselling. If your product costs $2,500, for example, but your customer is losing $5,000 per month that your product could address, presenting both those numbers is a simple and effective small business marketing strategy. If you can stretch the timeline out longer – say your client is losing roughly $60,000 per year, and your $2,500 product can reduce that number – the benefit shows the product literally paying for itself.
- Follow through
Follow through with your customers after the sale. Provide support and training (training is a great upsell) when needed. This builds an additional level of trust with the client, which can lead to new upselling opportunities in the future. Think of the lifetime value of your customer – not transactional value – and the follow through pays for itself.
The high cost of acquiring new customers means that upselling to customers you already have is your most cost-effective way to boost revenue. If you want to boost your small business marketing success, learn how to sell more effectively to your existing client base.