Most retailers are fully aware of the terms add-on selling and up-selling, each used to describe the concept of maximizing each sale. These concepts are especially important during the short holiday selling season, when the right sales techniques can mean the difference from being in the red or the black.
Up-selling vs. add-on selling
Although up-selling and add-on selling are sometimes used as interchangeable terms, there are differences between the two selling techniques:
Up-selling includes:
Showing the customer the better-quality, higher-priced item
Example: a 14K-gold ring vs. a gold-plated ring
Showing the customer a larger or bigger version of the product
Example: a 16 oz. bottle of lotion vs. a 12 oz. bottle
Add-on selling includes:
Selling additional merchandise that relates to the initial product being purchased
Example: a handkerchief to go with a tie
Selling the customer more of the same item
Example: a set of three pairs of socks vs. a single pair
Some salespeople mistakenly think that add-on selling and up-selling techniques are designed to manipulate customers into buying items they don’t want or need. Like any retail sales technique, add-on selling and up-selling can be used to manipulate the customer. But when properly used, these tools can thrill the customer (when they can get a bargain, for example, or a higher-quality product that will serve them better) and enhance the overall shopping experience. If both strategies are used with the customer’s best interests in mind, salespeople can deliver attentive and responsive customer service while landing sales and increasing profits.
One of the biggest mistakes salespeople make is assuming that the customer is well educated about all of the retailer’s products and services. Salespeople often think that, “If the customer wants something or has a question, they’ll ask.” Not so! This is a reactive selling strategy that does not drive sales—nor does it do anything to make customers feel like they are receiving superior customer service. According to a December, 2005 shopper survey by workforce-management company Kronos Incorporated and market researcher Harris Interactive, 85 percent of consumers said they were more likely to purchase additional products if they interacted with a knowledgeable sales associate. Salespeople need to recognize that when it comes to product knowledge, customers don’t know what they don’t know. Salespeople must adopt a proactive approach that involves educating customers, making them aware of product benefits and suggesting additional buying options.
Do’s and don’ts
Here are a few Do’s and Don’ts when it comes to add-on selling and up-selling:
DO ask questions and share information with customers. Rather than simply showing the best (or highest-margin) merchandise first, salespeople should begin by asking targeted questions to determine customers’ wants and needs. Asking questions not only helps salespeople determine buying motives, but also will make customers feel understood, and when customers feel understood, they are more inclined to listen to a salesperson explain other buying options, including higher-priced merchandise that might serve the customer better.
DO ensure all salespeople have in-depth product knowledge and information about the up-selling or add-on options for each product. Every salesperson should know what additional products “go with” a certain item for add-on sales, and what the higher-priced options are for up-selling. A lack of training in these areas will results in lost sales. Smart salespeople are always eager for opportunities to remind customers about additional purchasing options or to explain why a higher-priced item may make a more suitable purchase.
DO remember that up-selling leads to increased satisfaction. In general, consumers are more satisfied with higher-quality merchandise than they are with “value” merchandise. When sales associates up-sell customers to higher-priced merchandise, retailers not only increase their sales but customer satisfaction as well. Over time, increased customer satisfaction means customer loyalty, repeat business and great word-of-mouth advertising.
Look at every interaction as an opportunity to win over a customer not just for today but for tomorrow, too. Happy and satisfied customers are likely to remember their positive experiences at your store, and think of you the next time they go shopping. The more positive the experiences they have at your store, the more likely they’ll be back again—and again. Remember, it costs more to land a new customer than it does to ring up a repeat customer!
DO make statements that will allow a smooth transition to showing additional merchandise. If the customer is not interested in hearing about additional merchandise or higher-priced options, that’s fine, but sales associates should never decide not to show a product just because the customer did not bring it up first. Salespeople must take the lead and suggest products and services to their customers. Examples include: “I’ve got something great to show you,” or “Let’s take a look at [product X] to go with your new [product Y],” or “Let me show you the accessories you’ll need to operate and take care of your new [product].”
DO remember that during the holidays, customers are shopping for many people (including themselves!). Once a customer has chosen a product for someone on their holiday shopping list, a simple question such as, “Is there anyone else on your holiday list that would enjoy this [product] too?” or “Would you also like to get one of these for yourself this year?” can increase sales tremendously with very little effort. The Kronos/Harris study revealed that 45 percent of survey respondents said that they shop for themselves during the holiday season. The more that salespeople can help customers fulfill all of their holiday shopping needs, the better the customer will feel—and the fuller the cash register will be.
DON’T start the up-selling process when the customer reaches the register. Effective up-selling should start long before customers reach the cash wrap. Customers appreciate advice and recommendations while they’re shopping, not paying. When customers are at your register, they want a smooth and prompt end to the transaction. They are no longer in a frame of mind to appreciate additional buying options. In the customer’s mind, up-selling at the register demonstrates you care only about selling to them rather than serving them. Up-selling at the register is not proactive, customer-focused behavior, it’s simply annoying. And that means that the last feeling that your customer will have before leaving your store will be negative—the opposite of what you’re aiming for.
That said, there’s nothing wrong with limited add-on selling at the register, such as offering, “We also have the batteries you’ll need for your new [product].” For common items such a batteries, keep in mind that the stock should be at the register, so the customer doesn’t have to wait for the salesperson to retrieve the additional items.
DON’T judge customers based on appearance when it comes to up-selling. Ask any veteran salesperson and they’ll surely have a story about a customer in a grubby T-shirt and sweat pants who spent more money in one shopping trip than most customers do all year. Judging based on appearance is a fundamental “don’t” in all customer interactions, and if not followed can be detrimental to potential sales and customer relationships.
DON’T end the sale by asking a question. The most popular (and ill-advised) way of ending a sale is by asking, “Would you like anything else today?” This question will almost always elicit a quick “No” and bring and abrupt an end to your customer interactions. In fact, salespeople should never be the ones to end the sale. Only the customer should end the sale. The salesperson shouldn’t beat the customer to the register. The customer will always signal when they are finished shopping and if they seem unsure, the salesperson can ask, “What else can I help you find?”
DON’T assume that all staff members can effectively use these sales strategies without training. When it comes to maximizing sales, owners and managers tend to say, “We need to increase sales,” but then fail to train their people on how to accomplish that goal. Salespeople need to be taught what up-selling and add-on selling is—serving the customer—and what it is not—blindly suggesting more merchandise. Try on-the-floor coaching or role-playing customer interactions to help your salespeople learn the difference, practice their skills and gain some confidence. Your training efforts will be rewarded with increased sales.
Focus on the customer
Up-selling and ad-on selling aren’t just about getting customers to buy more product. These techniques are designed to fulfill customers’ needs, whether those needs are getting a bargain, buying a higher-quality product, receiving excellent customer service, or merely having a positive, productive interaction with sales staff. The bottom line benefit is increased sales, but the focus is really on fulfilling customer wants, needs and desires. Specialty retailers who keep the focus on the customer and use up-selling and ad-on selling whenever and wherever possible will close out 2008 with a healthier bottom line and happier customers.
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Andrea Waltz Richard Fenton
Andrea Waltz and Richard Fenton own FentonWaltz, a retail speaking, training and consulting firm specializing in sales, sales management and recruiting. They are authors of four books for retailers including "PLUCK! Providing Courageous Take Charge Retail Service," and deliver keynote addresses and workshops for retailers across the country. For more information visit www.FentonWaltz.com.
