“Do you want fries with that ?”
Thats the famous upsell taught by Mcdonalds to every Mcdonalds Employee.
Would it shock you to find out that McDonald’s makes almost no money on their hamburger?
The hamburger is like their core offer (which sometimes they advertise as flash sales with their 1$ hamburger ads), but the fries and Coke are their Upsell offer that brings in all the profits.
As the legendary Jay Abraham’s business growth model says: The best way to grow your business is to increase the average transaction value per customer.
And thats what Upsells are all about.
But first …
What Is Upselling ?
Upselling is the art and science of encouraging the customers to spend more than they have originally intended to, on a better or complementary product to what they are currently interested in.
These Offers and products that are used for upselling are called Profit Maximizers.
Did you already guess why ?
Correct. Because they aim is to maximize the profit of the sale.
Most businesses don’t have Tripwire Offers and they don’t have Profit Maximizers. They live and die selling cold prospects their core products.
This is why they struggle and you won’t.
The tripwire (as we saw in Power number 1) is made to facilitate the transition from prospect to Customer in order to fullfill the sale of the core product you offer.
The Profit maximizer is made to Increase the value of the customer by upselling them on a complementary product after they purchase your core offer.
See how it works now ?
Most businesses stop right after making the sale on their core offer.
They think their job is done.
But the fact is that once you have a buyer, it makes sense to ask them to buy something else… Afterall, no one is more qualified than your existing customers to purchase your premium products and services.
And thats why your businesses NEEDS profit maximizers.
Remember this: the highest cost that most businesses will incur is the cost of acquisition. The cost of acquiring the customer.
So once you put the effort, do you ads, do your retargeting and you finally acquire a customer, you’d be really missing out if you just stop there.
You’d be missing out on one of the greatest opportunities to grow your business which is through making more money out of the customers that you already have. Because the cost of acquisiton has already been incurred.
By just selling them something else, the margin and the profit goes through the roof. And thats exactly why you need profit maximizers.
Types of Upsells and Profit maximizers
1 – The Immediate Upsell
The first time of profit maximizers i want to go through is the “Immediate Upsell”
This is what most people think of when they think about upsells, and its kinda the most typical upsell you can do immediately after the purchase.
A very popular immediate upsell is the Mcdonalds example I talked about before.
As soon as you go to mcdonalds and order a burger, you’re presented with an upsell for fries and coke.
This kind of upsell really sums up what an upsell is. Because at the end of the day upsells offer someone more of what they already bought (think upsize), or something that compliments the previous purchase(think fries and coke).
This is why when upsells are done properly, people dont get upset.
I mean, you dont go to mcdonalds and get upset or surprised by being upsold on fries or coke.
People don’t visit mcdonalds to get something healthy. They visit mcdonalds to get something quick, predictable and tastes good (arguably).
This is why fries and coke upsell make perfect sense to what the buyer of a hamburger wants.
Another great example of an upsell is when you buy a an online course, a online movie or a mobile and you’re offered an upsell that directly compliments it. Like Extra modules for the online course, or deleted scenes for a movie or an protective cover for your phone.
Undoubtably, its easier to sell these offers to existing customers right after the sale.
2- The Cross Sell Offer
Cross sells are a different type of profit maximizers. Cross-selling simple means offering additional products or services to the customer to get them to spend more on their purchase.
How are cross sells different than Upsells ?
Well, in Cross selling, the offer is a totally different product or service. Not a compliment to the previous product. It must be relevant to the customer but not necessarily relevant to the previous product.
The key to do a successfull cross sell is to stay relevant to the desire of the customer and be relevant to the market as a whole.
If the customer just bought your service, you’d be crazy to cross sell them on a sofa. Even if it was a super comfy red leather kinky one.
A good cross sell in that case would be another service that similar customers usually also request.
Amazon does a pretty awesome job on cross sells. (Thats why they’re Amazon.)
The section that says “Customer who bought this item also bought” is their cross sell offer.
They’re simply recommending a different product that you might be also interested in based on what you just bought.
Here’s how Amazon does both upsells and cross sells:
For a digital product or an online course, a cross sell would be another course that is also of interest to the customers who usually buy the course they just did.
You get the point.
3- Continuity Profit Maximizers
Continuity offers are pretty simple. They’re subscription offers, Recurring Billing and another other type of offer that keeps billing the customer on weekly,monthly or even yearly basis.
The hardest think you ever do is that first sale, but with continuity offers you make the sale once and you keep billing them over and over and over again.
Most of utilities are subscription based. Like phone subscriptions, cable suubscription, internet subscription etc.
But over the last few years, this subscription model has been adopted by a lot of businesses because it gives your business a stead stream of income coming every month.
Membership sites or Paid mastermind groups are great examples of online subscription models.
Most SaaS companies operate under this model too.
Now there are also industries like Ecommerce industries that are trying a subscription based model like Birchbox where every month you get a box of beauty supply.
Root Bizzle is another ecommerce business using a subscription based model where they send you a new shiny tie every month.
Many brick and mortar businesses are also jumping in and trying a subscription based model. Like tanning salons where you get a certain amount of sessions during a month and they automatically bill you on monthy basis.
Even car wash businesses are running subscriptions where you get unlimited number of car washes based on a certain fee per month.
Even the Uber, is currently experimenting with subscription based bundles where you pay a fixed fee of $200 a month for unlimited uber rides. Check it out here
There are a lot of interesting ways to integrate continuity offers in your business and these types of upsells are effective not only for the short term but for the long term growth of your business.
So start thinking of how this can apply to your business and do not fall in the trap of “this doesn’t work for my business”
[mashshare]
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