Learn the relative merits of upselling vs. value-added selling.
The woman behind the counter efficiently processed my car rental. The reservation had been made on the company credit card of one of my clients—a fact that emerged in our small talk.
As we were finalizing the details, she said, “I have a Mercedes on the lot that I think you’d like.”
“For the same price as the midsize?” I asked. “Oh, no,” she said with a smile. “It’s an additional $25 a day.” I politely declined the additional charge to my client’s card.
This failed attempt to increase the sale illustrates the differences between upselling and value-added selling. Upselling can be effective for increasing short-term revenue from one-time sales; value-added selling sets the stage for repeat sales and long-term commitments.
Offers You Can Refuse
Upselling is a price-based offer. For direct sales in mature industries, salespeople are often scripted to upsell with questions such as, “Would you like to upgrade your airline seat for $39?” Essentially, the decision is either “yes” or “no, thanks.” Upselling is a “push” technique for increasing sales by suggesting or recommending a more expensive version of what the customer is buying. It can be effective when
used skillfully, and when the customer is open to suggestions.
Added Value Is in the Eyes of the Buyer
Value is personal and different for each customer. What confuses both customers and salespeople is that the word “value” is used interchangeably with “price,” as in, “This is our deal of the day. It’s a good value.” The deal may be a lower price point, but the deal may or may not be a good value from the customer’s perspective.
Value-added selling is not limited to adding components to the product or the service after purchase. There are multiple ways to demonstrate pre-purchase added value to close a sale.
Provide expert advice // Your knowledge and expertise can have significant added value. Start by assessing your competitors. Are they selling based on product or service knowledge, or are they providing useful advice? What are they not delivering that customers need? Take your knowledge to the next level and provide your buyers with expert advice in these areas of unmet customer need.
Become the source of post-sale information // Information has a high value at the pre-purchase stage of the buying process. Go beyond the information about your product, service and business that prospects can find on their own, online or through word-of-mouth.
Become their source of insights and information on the value chain your business provides across customer service, logistics, training and technical support. Help them think beyond pre-sale information-gathering to active use of your product or service.
Tell your story // Research indicates that customers will pay a premium for a product or service that has a compelling story, context or origin that is meaningful to them. That’s added value. What’s the story behind your product, service or business? How well are you telling that story and making your prospects feel connected to it?
Not every prospect will respond to an upsell offer, and not every prospect is a good fit for a value-added approach. If it’s a one-time sale you’re after, an upsell can yield short-term revenue. If the prospect represents a long-term relationship and ongoing revenue, consider a value-added approach to the sale.
