Upselling & Cross Selling Sales Techniques!
Upselling and Cross Selling | How To Make More Money Per Customer.
Ever wondered how when you go to buy something at the grocery store you end up with an entire cart full of items at the end?
That’s because the largest companies in the world have mastered upselling and cross-selling.
In this video I walk through the top sales tips and sales techniques in order to make more money per customer, specifically I show you how to upsell and how to cross sell.
If you have ever wondered “what is cross selling” or “what is upselling” this video is for you.
After you’re done watching this video on upselling and cross selling you will be able to add upsells into your sales funnel and be able to spend more money to acquire a customer than anyone else.
Those who can pay the most to acquire a customer win and those who use upselling and cross selling will be able to pay the most for a customer.
Become The Entrepreneur You Always Wanted To Be
[00:00:00] What’s going on everyone? My name is Ravi Abuvala, founder of ScalingWithSystems.com and in this video, I’m going to be walking you through the magical power of cross-selling, upselling what they are, why they’re important and exact techniques you need to use in order to implement them inside of your business. Now, let’s talk about exactly what upselling and cross-selling is. A lot of people use these terms intere-xchangeably. However, they technically mean two different things. So upselling is going to be whenever you acquire a customer or someone into your company, you sell them a price point that’s a little bit of higher, more likely than not on the same service or offer that they currently have. A really great example of that is Spotify. So Spotify is an incredible job. You can get their free version, which includes ads or if you pay nine ninety nine. So just ten dollars a month, they up sell you into the same service. However, you don’t have any ads. You can shuffle through songs. You can great playlists and a bunch of other benefits come with it. So someone could be just totally fine with getting their regular offer. However, they do want to offer this premium service, this ten dollar a month service, so that people can skip songs when they want to create playlists, when they want to shuffle whatever they want to do without hearing any ads.
[00:01:12] Another really great example of upselling could be Netflix, right? Netflix used to be one solid price per month. However, then they saw also the value and upselling and now they have multiple tiered packages with all of them still offering the same movies. However, there upselling certain customers into higher definition or allowing more devices to be streamed at the same time. So that way, people that want those things can just pay a few dollars extra a month to do it. Now, let’s talk about cross-selling, cross-selling results and literally hundreds of millions, if not billions of dollars that are made in the world market every single day. Have you ever heard the famous line? Do you want fries with that? McDonald’s came out with this concept of do you want fries with that? And they were able to add hundreds of millions, if not billions of dollars to their bottom line every single year by just asking someone if they want to spend about a dollar and some change more to get some fries with their chicken nuggets or hamburger. To you the end consumer, a dollar, a dollar fifty might seem like nothing in order to get some delicious salty fries from McDonald’s. However, to McDonald’s, that increases the value that you’re worth to them. And when you’re making literally tens of millions, if not hundreds of millions of patties every single month, then that adds up really quickly.
[00:02:21] So let’s now get into why cross-selling and up selling is incredibly important. So in my opinion, the number one reason why cross-selling and upselling is absolutely necessary in your business is because it allows you to pay more per customer. I recently had a client come over to my house. He has done about 90 million dollars in less than four years in running his business. And we are speaking about one of the main reasons why he has absolutely destroyed his competition and how he’s been able to make almost nine figures in a record amount of time. And he explained to me it’s because he can pay more for each client than anybody else in his industry. So what does that mean? Well, let’s say for just easy numbers, his service, his main core offer cost one hundred dollars. And that’s what everybody else in the marketplace. They offer the same service for about one hundred dollars. Right. Some people might offer 90. Some people might offer one hundred and ten. But it’s around a hundred dollars, everyone offering the same service.
[00:03:12] Now, if you didn’t have upsells and cross sells, then that that hundred dollars is the absolute max amount of money that you’re getting from that person, which means that you could really only spend 50, 60, 70 dollars in order to actually acquire that customer. And then you’d have to pay out, you know, your team or whatever servicing it costs you to deliver that offer. And then you’re left with just a few dollars profit every single time. So that means whether using virtual assistance and outbound lead generation strategy or paid ads or podcasts, whatever it is, you could really only put so much time and money in order to acquire a customer before you went in the red in order to acquire that customer. However, let’s say that you just added one, two or three additional upsells or cross-sells. Whenever you first get a client on one for another hundred dollars, one for another 200 dollars, maybe one for three hundred dollars. When they’re a certain percentage of people buying those will now your actual lifetime value of that customer, because you’re adding in those upsells and cross-sells is we’re so much more.
[00:04:08] So I created a little illustration here of what a typical sales funnel for a company can look like. I’ll put a link above in this video to a video I actually walk a lot more in-depth on what a sales funnel is and how to create one for your company. But I do want to show you really quickly. Let’s say a hundred dollars is what everybody in the industry is offering. And they close about 20 percent of them. They close into one hundred dollar deal. Well, that’s where most people stop right there. And so they can only afford to pay, you know, fifty dollars in order to acquire this customer. However, if you have something in there where after they joined a hundred dollar service, maybe you offer them, you know, some kind of cross-sell like a consulting package or a Web site design or whatever it is for easy numbers. Would you say it’s for two hundred dollars and 20 percent of that original people that bought in for one hundred dollars, then take the two hundred dollars, then a week later, two weeks later, you add in this three hundred dollar up sell that could once again. Be customs, social media, packaging. You can write out their sales script for them, whatever, a million different things you can think of and 10 percent of the people take that. And then finally, on top of that, you have another final hundred dollar, one up sale and 10 percent of those people take back.
[00:05:14] And so if we just did some really simple math to show you now what this one customer is worth, 20 percent of one hundred is essentially 20 people. So that’s pretty much 20 dollars. And then 20 percent of 200 hundred is about 40 dollars. Right. And then three hundred, ten percent of three hundred is about thirty dollars. And then one hundred ten percent of one hundred dollars is about ten dollars. Awesome, so what that means is, as you can see in my math, you’re on the bottom, is that twenty dollars I bought into those. So 20 percent of a hundred dollars is 20 dollars. 20 percent of two hundred dollars is 40 dollars. 10 percent of three hundred dollars is thirty dollars and 10 percent of one hundred dollars is ten dollars. If you add it up, the estimated value of each one of these people, you’re getting that every single person that you send into the sales funnel right here, you’re getting about a hundred dollars for every single person. That’s if you add the upsells in the cross-sells. If you didn’t have that, that means that you didn’t have anything passed here. You just had this hundred dollars right here. That means that every single person you send in would just be worth twenty dollars. So where your competition can only spend an order to make the 20 dollars they can only spend a few dollars on, you’re able to spend up to, you know, ninety dollars in order to acquire this hundred dollars worth of customers.
[00:06:38] So I hope that makes sense to you. So essentially, whoever can spend the most, whoever can make the most of their clients and customers can spend the most and to acquire those clients and customers and can thus beat out all their competition. So let’s finally really quickly talk about exact examples and some specific strategies you need to be using in order to do upselling and cross-selling correctly. So upselling and cross-selling is used e-commerce and SAAS also use it any kind of service based business? We teach our clients it in Scaling With Systems, but the important things you need to know are, number one you want to make sure that whatever your upselling or cross-selling does not take away from the original product that they purchased. So let’s say you’re an e-commerce and you’re selling t shirts by by chance. OK. And you offer one T-shirt on the front page. It’s worth thirty dollars and it’s pretty cool. And then they go to the next page and you’re trying to cross-sell them another t shirt and that’s worth another 20 dollars, maybe even fifteen dollars and maybe twenty five dollars. But it’s a different T-shirt. Well, if they liked that second t shirt more than they like that first t shirt, then you might actually cause them to have buyer’s remorse by even buying the first T-shirt and they might go. I wish I just bought that second t shirt. That’s why some of the largest clothing and e-commerce brands in the world like Amazon or Zappos or any of these other companies, they’ll say, hey, customers that bought this also bought these things, which could be, hey, instead of just having this T-shirt on the second page, instead of offering a different T-shirt, I am cross selling a pair of pants that matches this t shirt. So they complement each other well, instead of making my people wish that they had bought the second T-shirt instead of the first.
[00:08:03] A second example, could be that you could actually upsell them, instead of cross-sell, so they buy this nice t shirt and they buy one copy of it, or excuse me one quantity of it, and then they get to the next page and then we say, hey, you bought one quantity for twenty dollars. But we’re actually doing right now is if you buy two more shirts, we’ll give it to you at 15 dollars a pop. So you actually say five dollars each shirt, you’re saving ten dollars total and so they’re getting additional of what they already bought. So you already know that they like it. You get additional ones they buy for your brother, buy your dad, buy it for your cousin, whatever it is. The second aspect of a really great upsellers / cross-sellrs is you want to just make sure you have some scarcity in there, right? So I think in any kind of sales in general, it’s really important to make sure you have some kind of scarcity or people aren’t going to buy. Now, I’m not talking about any of this fake scarcity baloney like fake timer’s on a website, but you do only have a limited amount of these in stock. And so you can make sure you say that in the sales page. Or maybe if you offered someone social media management and in addition, social media management, you’re trying to cross-sell them on a website design, well you could say something along the lines of ‘hey, we’re only able to take on to website design clients per month and we already have one. Are you interested in getting this going so we can make sure we really launch our personal brand into the stratosphere’.
[00:09:14] And the final strategy I would recommend for upselling or cross-selling or to really build a successful business like a lot of our clients at Scaling With Systems is have at least one of those upsells or cross-sells be a recurring based model. So what that means is maybe your core offer remain offer is a one time fee or one time product or whatever it is. Somewhere along the way, as you should have a lower ticket monthly recurring subscription offer. A specific example of this could be like if you have a website design company, you offer a one time, costs in order to build and create a website and then a small fifty dollar, one hundred dollar monthly management fee so that they can ask any questions or have you quickly make any edits they need to do. This will both add value to your end consumer to your client so that they can have exactly what they want and at the same time allow you to create a very powerful subscription based model that once again allows you to pay more for your clients than anybody else.
[00:10:06] Well, there you have it. That’s exactly what upselling and cross-selling is, and some specific strategies behind how you can use them and some specific examples that we’ve seen inside of our clients are scaling with systems or I’ve seen out in the general market that have worked really well. Now, if you have a business right now, you’re thinking of starting a business and you will learn a little more tips about, you know, how you can start adding these upsells and cross-sell techniques, how you can start selling things before you’ve even actually created them or bought them yourself so you can be wildly profitable and how you can really scale this company quickly to seven or eight figures. I want to invite you to a brand new training that I put together in the past few days where I walk through how you can create a cash machine for your business. All you have to do is click the link in the description below and we go over online advertising. I go over where to find Virtual Assistants, how to hire them. And I go over what kind of business or core market offer should you have to make sure that you’re profitable from day one. Make sure you click the link in the description or to get access to that now. Also, you guys know the drill, If you guys got some value out of it, please do me a favor and smash that like button. Make sure you hit the subscribe below. Come down any questions you have and send this to one of your friends or business partners that needs to know how they can actually make more money per customer so they can absolutely demolish our competition. Thank you guys so much.