159. How do you cross-sell and upsell?
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Are you maximizing sales opportunities in your business? 🤑 After listening to this episode, you might think otherwise! Hosts Phil and Lauren have a frank discussion about making money through cross-selling and upselling. You're going to learn how to define your core offering, increase margin opportunities, widen your net, and define a cross-sell and upsell for easy sales. You're going to love this episode!
Episode transcription
Phil
Well, hello there. Welcome to Brand Therapy. I'm Phil.
Lauren
And I'm Lauren.
Phil
And this is the podcast where we help you position, build and promote your brands. Congratulations on choosing an excellent episode to listen to. Today we're talking about something that is absolutely essential for every single business. Now, I might say branding is one of those things that's essential for every kind of business, personal brands, company brands, everyone, I would say branding is one of those things. And the other thing I would say is one of those things, sales, sales, selling. You don't have a business if you don't sell, and that's our topic. I would say we tackle less, obviously, when we tackle branding, but it's all intertwined. And it's all wonderful, wonderfully harmonious. And we're talking about it today, because I think you're going to benefit from hearing some thoughts and dialogue around the subject of selling, selling more and getting creative about how you sell. That's the topic today.
Lauren
Yes. So there are two particular aspects of sales that I would like to focus on today. upselling and cross-selling. Now, I wasn't really familiar with these terms until a few weeks ago, quite honestly, I came across an article about them. And I found it so fascinating. I wish I had discovered these terms earlier. And a lot of these might be kind of a no brainer, once you actually hear the definition, but what I want to encourage our listeners to do is to take this information and actually apply it to your brand or business. And really, really see if you can find as many opportunities as possible to upsell and cross-sell. And we'll get into that in a bit.
Phil
I think we can even get into examples. I feel the same way you found that article, you distilled it into a blog post that's live on our website. I distilled it into a YouTube video that's on YouTube. And so I also learned so much in this exercise about sales, the difference between cross-selling and upselling, which we can talk about. Maybe first we'll cue that up, explain what the difference is. But let's get creative with lots of examples. You know, lots of examples. So people should check out the blog post on our website. Also check out the YouTube video. What's gonna make this episode unique are the many, many examples that we'll come up with from this dialog.
Lauren
Great. Okay, so first things first, the reason why it's important to cross-sell and upsell and just think about your sales in general, is because number one, as Phil mentioned, if you're not selling, you don't have a business, I hate to break it to you., but having a brand doesn't mean that you have a business, having money coming in means that you have a business. Now with sales, I'm sure there are probably a bunch of statistics to back this up, but at least I can speak from our own experience that acquiring a customer is the hardest challenge of sales. Once you've got that customer in, if you give them a good experience, it's a lot easier to upsell to them. And it's a lot easier to continue to extract money from that individual.
Now, of course, we're talking about sales and like kind of a clinical way about extracting money, obviously, this needs to be reciprocal, and whatever you're selling needs to be really incredible. It's not about grabbing money, it's about delivering value. delivering value. Yes, but there just so happens to be a price tag attached to that.
Phil
Well, let's talk about that for a second. Because I think people tend to feel weird charging for their time, especially when they're wanting to help someone. Right? There's this tendency when you want to help someone if it's a friend, someone you know, a returning client that you want to give them a discount, because you know, they need help. But there's some step taking a step back. There's some psychology around this, and confidence where you really need to own and understand the importance of charging for what you do, because there's value attached to what you offer. I just wanted to say that.
Lauren
Yeah, definitely. So something that I think about is okay, if I'm quoting for this, and it's making me uncomfortable, because it's feeling high, well, how much time would it take the client to do this to arrive at the same value or level of quality as what I'm doing? Because if I'm saving someone time, or money, and I know that I'm going to be doing a good job, then that justifies the price tag.
And another thing to also consider is, what you're delivering is going to ultimately lead to more business or sales for them. Because if I'm charging $1,000 to put together copy for a flyer, and they're charging $5,000 for whatever service is on that flyer, if they get just one sale, they've already quadrupled their initial investment in my service. So at least that's what's going through my brain when putting quotes together,
Phil
Yeah, I think it has to go through your brain. The other thing I would add to that is try to register in your mind when you get a testimonial, even casually, as you're hanging up on a zoom call with a client, and that client says to you, by the way, guys, I cannot thank you enough for my website. I just had a new client, contact me through the contact form, and now I'm working together with this person. Like, sometimes you get testimonials in the most casual environments and conversations. And you must learn to register those testimonials and have them ready to go. Be it in a sales call to a lead or even to yourself when you're pricing your services. Remember, all of those little highlights and positive moments when you get feedback, particularly on people appreciating what you've done for them that they paid for.
Those are the moments you need to remember and recall when it comes to pricing and pitching and all of those things.
Lauren
Absolutely. Okay, so how about this, Phil? I will first define cross-selling and upselling. And then we can have a little brainstorm on what those mean, where we might see them, how someone might be able to implement that etc.
Phil
You just be grateful that I'm putting this call on mute when I'm not talking because I am chomping on carrots in the background listener.
Lauren
I'm frantically trying to fill in the space when I can see Phil chomping away on his side of the screen.
phil
That's what you get when we record podcasts at launch.
Lauren
Okay, so cross-selling means that you're selling new products or services to accompany whatever sale you're putting through. And something very important with both cross-selling and upselling that I should add is that cross-selling and upselling is related to one particular sales transaction. Obviously, you might be selling 10 Different kinds of services, each of those 10 services should ideally have their own cross-selling and upselling. So I will explain. Cross-selling is kind of like if you think of the last time you went to a movie theater, and you ordered popcorn. You were probably recommended with your popcorn order to get a combo that tacked in like a drink and candy for just a few dollars more. So you're still getting that popcorn, but you've got accompanying items that are cross sold to you. So you don't necessarily need to offer a combo for your own services. But you want to be thinking about a service or a product that naturally tags along with your core offering doesn't replace it, but it tags along and complements.
Okay, so next is upselling. So upselling is basically when you're providing an option to upgrade your core offering. So if you think about this with the movie theater analogy, again, if you remember, they have like buttery topping, or butter, that's to go with your popcorn, right so that you're upselling, the butter, the real butter to your popcorn, but you're still getting the popcorn itself. Or if you go to a hotel, when you and you order the basic room, and you get an offer to upgrade your suite, you're still getting the room, but you're getting a nicer version of the room. So that's up-selling.
Phil
A great explanation. I love that you kept both analogies in a movie theater. I was not expecting that.
Lauren
Yeah, I love the movies. I love popcorn even more. So that wasn't much of a stretch for me, I love it.
Phil
But isn't it interesting because the concepts are simple. And we can all think of examples within our every day. But what you probably haven't done is have us give you listener, permission to go and think about how this applies to your business. I'll be honest, when I read this article, and we started to talk about that and create some content around this, ah, he hadn't thought about this as much as I should have.
Lauren
No, and it's so brilliant. Because if you are at the point where you're upselling or cross-selling, someone has already said yes, you've already sold them, the hard work is over. I've walked up to that counter, I've decided I'm gonna get popcorn. And it's so easy to just tack on that real buttery topping. It's the same with Chipotle when you get to the end of your little assembly line and it's the time for guacamole for an extra $2. I've already got the bowl the bowl is built in. It's like I'm ready to go. I'm going to be leaving Chipotle in like one minute, but it's an easy way to just get a little extra money.
Phil
With sales, I think a lot of entrepreneurs solopreneurs small businesses tend to focus almost too much on new customer client acquisition. Instead of we, instead of going back and going, hey, who haven't I chatted with, in a little while that I've already worked with that might need an update, that might have a new project in mind that I should probably carve out 10 or 15 minutes to just jump on a call with them and catch up. Those are the people that have already bought from you, and they're very likely to buy again, and it's worth energy. It's almost worth more energy into reigniting or upselling or cross-selling existing clients than going and finding new ones. It's much easier now around this conversation.
Lauren
I actually think it's not almost worth more, it is worth more because the cost of selling someone from scratch requires so much. And it takes a long time to get to the point where you're actually making money from it.
Phil
It's true.
Lauren
Yeah. Should we brainstorm some examples?
Phil
Let's brainstorm some examples.
Lauren
Okay, so something I was thinking, I'm just actually going through the different industries of our clients in my brain. So we have one client, who runs a tutoring company in New York State and Connecticut. And I'm thinking a very easy cross-sell would be if a student is coming for a particular subject for tutoring, and you could cross-sell an additional subject, if they were going to be upselling. The upsell would be a student needs tutoring image or a particular subject and you upsell to a senior tutor.
Phil
That's a great example. How about I give you an industry and then you give an example?
Lauren
Okay, you don't feel like brainstorming?
Phil
Not really.
Lauren
Okay.
Phil
I will come up with the categories of the types of people I know that listen to podcasts.
Lauren
Great.
Public speakers, or keynote speaker, how could they cross-sell and upsell?
Lauren
Okay, so I would say, cross-selling, the keynote speaker could cross-sell a small working session, in addition to their talk. A small working session with leaders following their keynote. Upselling would be to do an expanded version of the keynote, perhaps instead of 45 minutes. It's 60 minutes, and it covers XY and Z additional.
Phil
Great example. The next one, you get to choose the industry.
Lauren
Interior Design.
Phil
Oh, that's a good one. Yeah. So a cross-sell could be if someone hires you to design a room. A cross-sell would be selling another room in the house.
Lauren
Exactly. Exactly.
Phil
So imagine you’re in the room you're designing and then you notice okay, you're working on a living room, then you decide is actually the dining room could really use some love for the bedroom. You cross-sell another room in the house.
Lauren
Should we throw that in there, those extra powder rooms?
Phil
An upsell, if you remember, an upsell is a more premium version of the original product. So an upsell could be a design for the living room, maybe include some renovation, instead of just choosing the softer elements.
Lauren
Mm hmm. Or it could also include maybe two to three different drawing options. Great. Or it could include fabric selection and addition to drawings.
Phil
I love that.
Lauren
Because you're making your initial service better. You're making your initial service more comprehensive.
Phil
Yes. Should we come up with one more industry or example?
Lauren
Sure.
Phil
I am trying not to pick anything that's too obvious.
Lauren
What about a dentist?
Phil
That's a great one. That's a great one. cross-sell. Do you have one?
Lauren
Yeah, I do because it actually just happened to me last week.
Phil
Oh, great. Let's use the example.
Lauren
I went in for my cleaning. And they asked if I would like a fluoride varnish, instead of the regular fluoride.
Phil
Did you say yes?
Lauren
I said yes. I said, Sure. Why not? Because the varnish, you can drink immediately. You just can't have anything that's too hot or crunchy for a few hours, but I was really thirsty. And I didn't want to have to go without water for an hour.
Phil
How much more did it cost? How much were you willing to pay for that?
Lauren
I don't even know.
Phil
Ah, isn't that interesting?
Lauren
Yeah. I just said yeah, sure. So it's probably lunder $30.
Phil
And that was an upsell or a cross-sell?
Lauren
That was a cross-sell because that was in addition, it seems like an upsell of the regular fluoride, but it's actually a cross-sell because the fluoride was not part of the cleaning, but it's part of my insurance. So it was just thrown in. You know, maybe it was actually both. It was an absolute fluoride, but a cross-sell all of the cleaning, yes. Double whammy.
Phil
So and now that you're recounting what just happened to. I'm realizing that I was cross sold to the other day without what happened. I was sitting in the chair of the dermatologist a few days ago in Mexico City, who was holding a needle that she was about to stab in my face to keep my wrinkles calm. That's called Botox. And she said, so I've noticed and she does so well. She said, No, you've this is really going to help your forehead and your T zone. She said, no,w when you smile, you are starting to develop crow's feet, just a few lines. And before she even finished, I was like, yep, let's do it. Let's do it. I’m in the chair. You can't tell me that I have that I'm developing crow's feet. Like, as if I'm not gonna fix them at that moment. Are you kidding me? Yeah.
Lauren
Now, can you come up with a way she could have upsold you?
Phil
Yes. But let me tell you that she was so smart in how she did this because she said, even prior to that we were talking about the importance of preventative care,rather than reactive.
Lauren
She just teed you up.
Phil
And she was like, if you know, by taking care of these things, proactively, you're not going to develop these deep lines that men often do as they age. So okay, so not only did she cross-sell, well there was another instance of cross-selling, she pointed out on my face another area that I may have to work on six months from now, I didn't do it in that moment. But ting up for the next time I see her well done, Jessie well done. If that was an upsell then she could have, for example, sold me on a more premium brand of Botox that she would use. She didn't in this case. How interesting is it when you pause for a moment and realize you are being sold to you are cross sold and up sold on a daily basis from putting items in your Amazon cart, to going to the grocery store to filling up gas.
Hopefully, this conversation makes you aware of those moments so that you can navigate them like a smart savvy entrepreneur, but integrate them, especially when they work on you. I think it's important to take inventory of those moments, when something works on you a branding initiative, a marketing initiative, a sales initiative. When it works on you, I want you to register that moment and go, ooh, that worked on me. Let's not just consume it, but let's actually analyze why that worked on me. And it might give you some ideas for your own business.
Lauren
Absolutely. Absolutely. Okay. So in terms of tools, really, I would start off by focusing on one core offering and figuring out your upselling and cross-selling from there, don't do this all at once, you're not gonna be able to keep track of them. And more importantly, it might not even be worth your time. If whatever offering you're working on isn't very popular.
You want this to be something that you can measure. So you want to be going for a core offering that's really popular. So we use tools, like Pipedrive to keep track of different funnels in our business, particularly the brand audit funnel. So how many people reach out to us, how many of them convert, how many of them turn say yes to a client project later, etc. And we also use Everhour to track the profit on all client projects. Ultimately, it's really a time tracker for billing clients, but also really great for tracking profit on different initiatives. So I would definitely recommend focusing on those tools If you do a time based business like we do. And for anyone else who's selling perhaps a product, you just want to be really, really crystal clear on your margins similar to how they do it in Shark Tank.
You want to know your margins on each product inside and out. And whichever products you have the highest margins in, that's an opportunity for cross-selling and upselling even further. Can I go through recommended steps, Phil?
Phil
Yeah, let's do it.
Lauren
Okay, so first, figure out your core offering, using the different tools that I’ve alluded to before, you definitely want to be knowing or looking for high conversion rates and or high margins, because we're going for volume here we're looking for really low hanging fruit, people who are already on the door, people are already saying yes to whatever you're selling.
Next, you want to figure out how you can sell more of your core offering, you want to be opening up that funnel. So for example, if you're maybe promoting you want to promote it more, or you want to grow your email list so you can widen the number of people who are aware of that core offering. You might even want to lower the price of it if you can, if you have really high margins so more people are saying yes, or if you've got a print product, maybe you can offer a digital version of that.
And again, the goal here is you want to be increasing sales volume on a product or a service that's already giving you high margins. Because then you can amplify the effects of whatever you're going to be cross-selling, or upselling later.
Phil
Can you go back and explain? Because people might be like, what, what they're telling me to lower my prices? What do you mean, but this is an important point, can you reiterate why that might be a good idea?
Lauren
Yeah, because we're wanting to lower the cost of acquiring a customer. And sometimes a price can be just too high to acquire a customer. So let's say you sell a service, that's $200. That's your core offering. And the amount of that your profiting is $100. If you lower that service from $200, to $180, first of all, more people might say yes, because it's $20 less. But second of all, if more people are saying yes, then you might have an opportunity to cross-sell or upsell another service for $100. And then you would actually potentially be making $80, less whatever it's costing you. So you could really be making more money if you can successfully cross-sell or upsell, after that sale,.
Phil
Perfect explanation useful. So that's why we say, you know, we always have the ways can people as I raise your prices, you're not charging enough. In this case, we're saying actually, if you lower in this context, that might be incredibly powerful.
Lauren
Yeah. But you want to make sure that you're cross-selling or upselling, something so that you aren't just taking a hit monetarily, but you're actually making more?
Phil
Yes.
Lauren
Okay. So next, after you determine how to sell more of your core offering, then you want to figure out what you're going to be cross-selling, right. And to clarify, again, cross-selling really is if you can remember a combo of sorts. You don't have to sell it as a combo, but you want to be thinking to yourself, what new things could I tack on to make that core offering even better for the client. Now you're not upgrading your cross-selling. So just think of that movie theater analogy. And you want to just think of how that movie theater analogy with the popcorn and the drinks and the candy could be applied to whatever it is that you're selling. Then I want you to come up with an upsell for your core offering. So forget the combo for a second, go back to that original service or product that you're selling, and think about how you can make it even better, how you can make it even more comprehensive, how you can make it more of a deep dive, how you can deliver more. And you just want to make sure that you're making that core offering better, you're not selling a separate service, because that's cross-selling, but you're instead selling a more luxurious version of the product or service your customer is really interested in.
Now, I would say feel this out based on your customer. But you definitely want to first focus on selling just the core offering, don't even mention the cross-selling or upselling. Again, back to the movie theater. When you step up to order popcorn, it's pretty rare to be like I'm gonna get a combo to write usually, it's like I want popcorn and a drink. And then they clarify for you. So focus just on the core offering, don't even mention cross-selling or upselling. And then from there, what you think the client would be more interested in, or the customer would be more interested in and then go in with the cross-sell or the upsell one or the other. And the reason for this is because it's a lot easier for someone to say yes or no to a service than to decide between two services. So you want them basically, you want to go in, let's say you want to do a cross-sell first. So you decide to do the cross-sell, see if they say yes or no. And then you go on with the upsell and see if they say yes or no, it's gonna be pretty hard to resist a cross-sell and an upsell back to back.
Phil
And that's making money. Again, in a situation where someone is already ready for a transaction. They're ready to buy. And it's easy. It's easy. I think people might be shocked at how easy this is once they implement it.
Lauren
And I would say as well, when you're coming up with your cross-selling and upselling prices, you want to be crystal clear on what margin you're getting on those two, because it's not totally worth the effort of cross-selling and upselling. If you aren't going to be actually profiting on it. You're not throwing anything in at cost. You're not throwing anything in complimentary. These are sales tactics. So make sure that you're making money from it.
Phil
Fantastic.
Lauren
Love this topic.
Phil
Love this topic. Does that wrap it up?
Lauren
Yeah, it does.
Phil
I think that we should add one additional component to this. I think we should challenge people to create an upsell and cross-sell for their brand and business and share it with us. You can find us on social media. I’m @philpallen
Lauren
I'm at@thelaurenmoore
Phil
#brandtherapy. Let's continue that conversation specifically, we're asking for you to send us a message or a tweet or whatever it is on whatever platform you want, you can find us and share what you've come up with for yourself. And while you're at it, you know, we really appreciate it when you take the time to leave us a review in the iTunes Store, five star five star that helps other people discover this podcast that we work very hard to create for you. But we appreciate you. We hope you have some juice and some fire for that amazing opportunity to make more money and add value to your customers and clients. You'll see us back here next time on Brand Therapy.
Lauren
Bye bye.