Win-Win Upselling (1,133 words)
by Mary Ann Falzone
The art of upselling and cross-selling on the telephone has one absolute golden rule: The customer must win. When the benefit from your add-on sale is both tangible and instantly understood, such a program will work every time. If it takes a stretch of the imagination or a leap of faith to grasp how the customer could possibly profit by the exchange, the upsell or cross-sell just won't fly.
Sound like common sense? It is. Yet, that doesn't stop many marketers from focusing on what they need to sell instead of what the customer needs to buy and why they'd want to buy it.
Another key variable in crafting a successful add-on program is determining how much you need to know about prospects and their past purchases before offering a particular up/cross-sell or choice of add-ons. A host of factors may affect this decision, including: whether the targeted prospect is a business or consumer; the complexity of the sale; the length of the buying cycle; the length of time since his or her last purchase; the availability of similar products or solutions on the market; the level of purchasing authority; and whether the contact is responsive (they call you with an immediate need) or not (you've called a customer with whom you have some level of relationship).
Let's explore some examples.
Outbound business-to-business—computers and peripheral equipment to home-based businesses:
• Pluses: The decision maker is easily identified and usually accessible.
• Minuses: Computer equipment is quickly outdated, readily available from any number of retail or direct outlets and highly price competitive. Even if you have sold them computer equipment in the past (and have a somewhat warm relationship), prospects are not expecting the call and not likely to be thinking about their computing needs at that moment—unless, of course, the system is down or the prospect is having trouble using it—in which case you've inadvertently opened a can of worms.
• You'd need to know: how the home business uses the equipment, the current system configuration, how old the equipment is, how it has been customized by the user and the limitations of the current system.
• You'd need to offer: specialized products or services that apply to a wide range of businesses and are not readily available elsewhere.
On the whole, this upsell or cross-sell situation falls toward the more complex range of potential projects and may not be financially viable by telephone.
Let's change some of the variables and see how they'd affect an upsell equation. Instead of home-based businesses, we'll target small businesses in a vertical market (independent community banks) whose day-to-day transactions are dependent on an older version of a legacy software system. The newest release you're offering has been debugged and will solve many of the problems in the old version which typically bring down the system. Better yet, the older version will no longer be supported free of charge, starting in 60 days.
This second case is an upsell no- brainer: Many prospects will be very interested in converting to the new release and quickly. Most will also appreciate the heads-up call, whether they update their software or simply explore options for paid tech support on the older release.
The inbound version of this scenario is also strong: a bank who calls in with technical problems related to the old software or is looking for a compatible peripheral is a likely prospect for the new release. In this case, however, remember that you still have a number of potential obstacles to the upsell.
First, Sue Banker who is calling in about the problem may not have buying authority for the new software. Or she may have a vested personal interest in keeping the outdated software (if she has built job security on being the only person who can troubleshoot the old version).
Secondly, Joe Bithead, the tech support rep fielding the call, may not have access to accurate information about which release the bank is currently using. Or he might lack the selling skills or mindset to make the sale. Likewise, he may feel that his job could be at risk if the new release reduces trouble calls to his technical service department.
When up- or cross-selling to consumers, campaigns are typically less complex, particularly on inbound calling programs. Either you need to know what you've sold them in the past (and what their future needs are likely to be) or you don't.
Let's go back to the computer example, this time for personal use. When I want to add an internal modem and fax broadcast software and call the Add-On Peripheral Department of my computer manufacturer, I expect the rep who fields my call to access information about my current system via my customer number and to recommend a product that's compatible and easy to install and use.
On the other hand, when I call to order general merchandise from a catalog, I may be interested in hearing about other items whether or not they're related to past or current purchases. When offering discounted items, customers may be more receptive when asked for their permission to be pitched: We also have a number of telephone specials today, would you like to hear about them?
In addition, add-on upsell and cross-sell programs from third party vendors have become increasingly popular with both direct marketers and their customers because they can help reduce the cost of providing telephone service while introducing customers to added value products or services.
Here's how they work: your company adds a pitch for the vendor (a free pre-paid calling card or free trial membership in a discount buying service or travel plan, for example) to the end of the sale verification as a thank you:
To thank you for your order ... As one of our valued customers ... We'd like to offer you...
Depending on the program and whether it's inbound or outbound, the vendor may pay a fee every time the script is read or every time a customer accepts the featured upsell. Fulfillment and service for the program is completely handled by the vendor. Your company simply tags on marketing for the add-on to your existing telephone sales operation.
When evaluating such programs, be sure to investigate the vendors' program first (get a card or a membership and try it out yourself). Ask for references and explore issues like conversion rates and customer satisfaction with companies who have been clients for a while. And make sure you test before you roll-out any third party add-on campaign.
Mary Ann Falzone is president of Falzone & Associates, Chalfont, PA, a call center consultancy specializing in live representative and automated voice response telephone programs. She can be contacted at (215) 822-8941 or by e-mail at firstname.lastname@example.org.