Upselling can increase your bottom line and help you recommend things to clients that will make their lives better, and stick with you longer.
It's often overlooked, but it's an easier sales strategy than, say, creating a marketing campaign from scratch—and if you do it right, upselling can yield thousands of dollars in profit.
Let's find out how to use this simple technique in your business to boost sales today.
What Is Upselling?
Upselling is when you encourage a customer to buy a higher-priced product or service so they get a better experience and you get more profit. Think of it as an upgrade.
Upselling vs. Cross-Selling: What's the Difference?
Technically, upselling focuses on upgrading the product, while cross-selling adds more items to the sale.
While in some industries, the distinction between the two might be important, in others—like the construction industry—the differences between these sales tactics aren't that important. At the end of the day, you're looking to provide a better customer experience, grow your revenue, and move more inventory.
Example of Upselling
Suppose you're an electrician adding a few outlets in a home and notice a baby in the family. You might suggest using tamper-resistant outlets instead of the traditional ones.
Many parents don't even know these exist and would happily make the switch. While you're at it, you can ask if they want to swap out all the existing outlets close to the floor. A win-win for all.
Example of Cross-Selling
If you also wanted to cross-sell, then you'd suggest additional or related products to complement the customer's choice. Does "Would you like some fries with that?" sound familiar? It's such a natural addition to your meal that it barely registers as a cross-sell.
For this same family, suggest installing a backup power source to keep things running after a storm, hurricane, tornado, or flood. Because having no power is bad enough, but having no power in the sweltering summer heat with a baby or toddler can be downright dangerous.
You can avoid overwhelming customers with options by saving cross-sells until they've already agreed to buy the original item or service.
How Do You Find Upselling Opportunities?
You can find opportunities to upsell in your own trade by considering ways to provide more value, using your expertise, and looking for the right timing. Here's more on these three tips:
Tip 1: Focus on Providing Value
A successful upsell isn't about pushing unnecessary products onto unwilling customers; it's about providing genuine value for both parties involved. The key here is to enhance your customer's experience and solve their problem. Approach the situation honestly and authentically, and you'll find that upselling can become a natural part of your client interaction.
Tip 2: Leverage Your Expertise and Position as a Trusted Advisor
As a professional, you have a wealth of knowledge and know-how under your belt. Use it to educate your customers about additional options and benefits they might not know. This way, you're providing value and building trust with your clients.
Tip 3: Watch for the Right Timing
Upselling at the wrong time can backfire and leave your customers feeling pressured. Be mindful of their journey and look for cues that signal they might be open to upselling. For example, customers who are already satisfied with a recent service might be more receptive to an upsell.
10 Effective Upselling Strategies for Tradespeople
Here are some of the best upselling strategies to grow your average order value in the trades:
1. Listen with an Ear for Opportunities
Listening works because you can choose and adjust your upsells so that they're a better match for what the customer wants and needs. It also allows you to catch and counter objections before they turn into no thank yous.
You may want to:
- Ask them what they want—and make it happen. For example, a home renovation contractor may ask what homeowners want out of their renovation. More space, better functionality, and a modern look? From there, contractors can suggest layouts and items that would accomplish that.
- Offer a limited-time discount, diagnostic or other service if you hear some hesitation from price-sensitive customers. Make the offer good only if they move forward with working with you today.
2. Offer Maintenance Plans
Maintenance plans work well as they ensure regular work and keep your customers' systems running smoothly. As a bonus, you'll also increase your customer lifetime value (CLV), a measure of how much money a client generates over all the time they work with you.
A high CLV helps keep marketing costs lower because it's more difficult to gain new customers than to keep existing ones.
- Offer different plan levels, like basic, premium, and VIP, catering to various budgets and requirements. Keep the plans flexible and offer seasonal deals.
- Provide clear pricing and details for each maintenance plan tier.
- Include regular inspections, cleanings, and repairs in maintenance plans for HVAC, plumbing, or electrical work. This ensures the customer's system remains in optimal condition.
- Highlight the benefits of regular maintenance, such as preventing costly breakdowns and extending the lifespan of their equipment.
3. Bundle Services
Many of us are familiar with ads from insurance companies offering discounts when purchasing various types of insurance with them. It's a popular marketing strategy because consumers feel good about saving money while also benefiting from the convenience of managing different services through the same provider. The same can be true for your customers.
Some ideas for your business include to:
- Bundle related services together at a discounted rate. For example, if you're a plumber fixing a leaky faucet, offer to inspect other plumbing fixtures in the house for a reduced fee.
- Combine your services into packages that cater to the customer's needs, like a "Home Safety Package" or a "Kitchen Renovation Bundle."
- Communicate the cost savings or convenience of choosing the bundled option.
4. Provide Three Options to Choose from
Giving customers just three service or package options to choose from allows them to consider higher-priced options without overwhelming them with choices. We go more in-depth on this concept in the "Rule of Three" section further below, but for now, you may want to:
- Offer customers a budget, standard, and premium version of what they need.
- Tailor your service and product recommendations to match the customer's preferences and budget.
- Offer three different models with varying levels of energy efficiency and warranties when installing a new HVAC system, for example. Explain the benefits of each option.
5. Show Value
Explaining everything potential customers are getting for their money can help remove some of the sticker shock. It shows them how they're getting a good deal. Here are some tips:
- Emphasize the long-term benefits and cost savings of higher-end products or services. Show how they can reduce energy bills, require less maintenance, or last longer. Make customers aware of the benefits and how they outweigh the initial cost.
- Use real-world examples or case studies to illustrate how the higher-priced option provides better long-term value.
- Address any concerns the customer may have about the higher price.
6. Educate Customers
Sometimes, customers don't understand why they would need a product or service or how it meets their needs until you explain it. To better explain it to them, you can:
- Use your expertise to educate customers about the benefits of specific products or services. For instance, explain how a water filtration system can improve water quality and health.
- Give out customer-centered educational materials and brochures from manufacturers to show customers the benefits of certain products or services.
- Talk in layman's terms when explaining technical aspects and how they impact the customer's daily life. Get rid of the jargon and word sentences so that even a kid could understand.
- Patiently answer questions and address concerns.
7. Offer Financing Options
Financing helps make selling more expensive versions of products or services more accessible. If you do offer payment plans, consider:
- Partnering with financing providers or offering in-house financing.
- Clearly laying out the financing terms, interest rates, and monthly payment options.
- Highlighting how financing can fit within the customer's budget.
8. Customer Loyalty Programs
These programs create incentives for customers to come back for more services. They also encourage existing customers to choose your business again, making them more open to upsells because they already know, like, and trust you. A few different ways to encourage customers to keep coming back include:
- Implement a customer loyalty program that offers discounts, free services, and other perks for repeat business. This builds loyalty and creates incentives for them to come back for more services. It also encourages existing customers to choose your services again, making them more open to upsells because they already know, like, and trust you.
- Create reward plans for referrals to new customers.
- Have a drawing with an enticing prize like an iPad, with reviews left on different social media platforms, each earning a ticket. Social proof is persuasive and can move customers to go with you instead of a competitor. Ideally, the business from just one or two new customers should be able to cover the cost of the prize.
9. Train Your Team
Chances are that the more your business grows, the more people you'll have besides yourself to price jobs and meet with potential customers. So, your team will play a critical role in upselling. If you want them to feel confident and be successful at it, the right training is a must.
You'll want to:
- Train your workers on sales techniques and have regular meetings to discuss strategies. They don't have to be natural-born salespeople for upselling to work.
- Encourage your team to find their selling style, making it comfortable and authentic.
- Role-play scenarios to practice upselling conversations and handling objections.
- Offer employees a percentage of the sale to motivate them to upsell.
- Set clear upsell targets for employees to achieve or unlock additional bonuses.
10. Track and Analyze Customer Purchases
Tracking and analyzing customer purchases can feel like a hassle you don't have time for, but having data on upsells helps you refine your approach and focus on what works best. You can:
- Keep records of your upselling efforts and analyze the success rates.
- Use customer relationship management (CRM) software to track your upselling efforts and outcomes.
- Adjust your in-person and email marketing strategies based on insights from your customer data.
Examples of Upselling in Different Trades
While upselling techniques remain the same across industries, the products or services offered change. Here's what it might look like in a few different trades.
Upselling in Landscaping
Customers might ask for a simple lawn maintenance job, but you could suggest adding flower beds, hardscaping elements, or even installing an irrigation system.
By explaining the benefits, like increased curb appeal and reduced water usage, you can upsell additional services to meet their needs and boost your revenue.
Upselling in Construction
When a client comes to you for a home renovation project, upselling can be as easy as suggesting upgrading the materials used in key areas of the project. For instance, you might recommend using energy-efficient windows and doors or adding insulation to the walls and attic.
These upgrades improve the home's comfort and provide long-term energy savings for the homeowner.
Upselling in Painting
Suppose a client hires you for a basic interior paint job. You can suggest alternative paint finishes with added durability and longevity, such as moisture-resistant paints for bathrooms or kitchens.
If you also notice that the client's home has poor natural lighting, you could recommend lighter or more reflective colors to enhance the space and create a brighter environment.
What Is the Rule of Three in Upselling?
The rule of three for upselling is to always offer three upsell options to your customers. If you offer less, customers may not find what they're looking for and give you a hard no.
Give them too many options and they may be so overwhelmed they'll walk away. Three is the magic number that gives your customers flexibility without stressing them out.
You'll want a budget, middle-of-the-road, and premium offer, increasing both the value provided and price tag as you go up in tiers.
If, for example, a landscaping client wants to put new grass in their yard, here's what you might offer under each tier.
Budget: Complete what's needed to remove the old grass and install sod
Standard: Everything under the budget option, and also put down mulch and basic plants
Premium: All of the above, plus landscape design and selection of premium plants
What Are the Four Types of Upselling for Tradespeople?
The four main types of product and service upsells in the construction industry are add-ons, upgrades, added protection, and bundling. Here's a closer look at each.
Add-on-based upselling is when you suggest additional products or features that complement an initial purchase or service.
For example, if you're a plumber and a customer is buying a new heating system, you might recommend adding smart thermostats and temperature sensors to the original purchase. This could help them save on energy costs and improve their overall experience.
Upgrading products and services means going with higher-quality versions. As a roofer, you might suggest to your client wanting asphalt shingles to level up from traditional 3-tab shingles to architectural ones. They're the next cheapest option, last up to twice as long, and withstand up to double the windspeed.
3. Product and Service Protection
Product and service protection is all about providing the customer with additional security and peace of mind. You can offer:
- Extended warranties: You may typically guarantee certain work for up to a year but offer a two-year guarantee for a fee as part of an extended service warranty. Or contractors can partner with extended home warranty companies after a kitchen remodel to cover general wear and tear on appliances and systems.
- Maintenance plans: An example is offering a maintenance package that includes yearly inspections, priority service, and a dedicated phone line for VIP customers.
This approach involves combining complementary products or services into a bundle, offering a lower price than buying each item individually. For instance, if you run an electrical business, you could offer a package that includes a home inspection and installation of energy-efficient lighting.
Bundling these services makes it more convenient and cost-effective for your customers, increasing customer satisfaction and potential future sales and referrals.
Make Upselling Great for Both You and Your Customers
When it comes to effective upselling, you want to ensure you're striking the right balance between providing value to your customers and increasing your profit margin. Do that by keeping your upsells customer-focused, identifying the right opportunities, and ensuring you provide genuine value.
Whether you're bundling services, providing maintenance plans, or offering payment plans, it's a lucrative strategy when done right.