Welcome to week 7 of the #BusinessChallenge!
Right, so for the last two weeks you have been firing bad customers and treating your best customers like they should be, with thanks and gratitude.
This week the challenge is also fairly simple like last week. This week I want you to do one thing and do it well.
I want you to focus on the simple concepts of cross-selling and up-selling.
Cross-selling versus Up-selling
These terms are sometimes used interchangeably but they are quite distinct. They are not the same and don’t have the same end result. When you are able to implement them effectively in your business, the effect thereof will be seen immediately. Not next month or next financial year, but right now.
Cross-selling is the art of enticing and convincing your client to buy complementary or ancillary products from your business.
Upselling is the art of promoting and convincing your customer to buy the more expensive version of your product or service.
Many people believe that this is the all too familiar “pushy” salesperson’s approach. But when it is properly executed, your customer will be better off but so will your turnover and profits.
The famous hamburger philosophy
Cross-selling can be explained as follows.
You stop at your favourite take away franchise and you feel like a nice juicy hamburger. You go in and you order the biggest one on the menu (if you are anything like me…). As you are about to pay, the lady in front of you asks you if you want extra cheese with it. “No thanks, it’s fine like it is”. Ok, so that one didn’t work.
Next, she asks “Would you like to add R12 and make it a meal with a small chips and a cool drink?”. Well, now that sounds like an idea, doesn’t it? So you say yes. Lady at the counter 1 – Me 0.
Then she proceeds to say that for only R4 extra I can add that slice of cheese now. Now you think, well, I have already made this my meal for the day (and my total calorie input until Easter), so why not. So you add that slice of cheese. Lady at the counter 2 – Me 0.
I lost this round, badly.
My favourite hamburger hangout wins by increasing their profit and turnover with 2 simple questions answered as yes. See, it’s not that difficult to cross-sell.
Up-selling is this lady’s next trick. And it is genius!
“Sir, would you like to upsize your meal for only R10 extra?”
What!? Is this possible? “That is a bargain”, you instinctively think. The words “Yes please” blurb out your mouth without even thinking about the extra R10. Lady at the counter 3 – Me 0.
While this might be the perfect example of both concepts and the perfect example of using them both on the same transaction, the application in your business is just as easy.
Onto your business opportunities
Look through all of your products and services. Write them down on a whiteboard or make little paper models of them on your boardroom table. Make sure you have all of them there. If you do not have them all listed, you will lose out on cross-selling or up-selling opportunities.
Once you have all your products and services listed, make links between them, specifically where there are cross-selling and up-selling opportunities.
If you do one-off pool cleaning services,cross-sell by providing your customer with chlorine for the month. You can even up-sell by asking them if they are interested in your monthly subscription pool cleaning services for only R*** per month, and the chlorine is included.
If you have none of these opportunities, then your product and service range is way too diverse and you need to focus on complementary or ancillary products and services. You might even have to cut down on some and insource other products or services.
Now that you have the links, go out to your customers and start promoting these cross-selling and up-selling products and services. Remember, your customer can only say no, nothing more.
Good luck with this process. This is probably one of the most eye-opening exercises you will ever do in your business.
Next week we commence with a new theme. I will focus on cost-cutting.