The Fine Art of the Upsell

Want Fries with Your Burger? The Fine Art of the Upsell

Restaurants do it beautifully. “Did you leave any room for dessert or coffee?”

At least one car rental company my client just visited did it obnoxiously. “Did you want insurance, gas, a GPS, or a toddler seat? Who will be responsible for the car if something happens to it? Oh by the way, it’s extra now for the steering wheel. And if you want it to go in reverse from 4PM to 5PM, that’s an extra charge, too.”

The All-Important Upsell

How does your company rate when it comes to the all-important upsell? Is it smooth like a restaurant waitress who smiles while she delivers her line? Or could it be improved?

While you don’t want to anger your current customer, you do want to fully serve their needs in a way that helps them and boosts your revenue. Here are five tips to perfect and track the all-important upsell.

1. Make sure you are upselling.

Once people have chosen to do business with you, you have their trust. They’ll want to know what else you have to offer. Sometimes we may feel like we’re bugging the client, but it’s really cheating your client not to let them know what else you can help them with.

Don’t be afraid to add upselling to your communications with your client in a number of places. If you don’t upsell, you’re leaving precious money on the table, and most of all, you’re under serving your clients. A small percentage of your customers will always purchase what you suggest.

2. Get the timing right.

Add an upsell option immediately after a prospect has landed in your funnel. For example, if they signed up for your free newsletter, offer them your entry product or service on the landing, on your Thank You page or in your first welcome email to them.

If your product or service is relatively small in dollars, add an upsell option immediately after any small purchases. Do this right after the shopping cart has processed their order. Some carts have an automatic feature built in to do this; all you have to do is select the product you think the buyer would like.

Don’t upsell right after you’ve agreed on a large proposal, but do upsell at the end of that engagement.

If you meet a client periodically, such as monthly or quarterly, always schedule the next appointment before you leave if possible.

3. Get the product right.

Gradually move your client up in price. If they purchase something for $100, offer them something for $500, but not for $5,000. If they buy a $5,000 contract, they might be ready for a $10,000 service next year.

4. Create the right language.

Never put your customer in a position where they feel forced to make a decision or feel wrong for not taking the service, like my client did with the rent car. (Try your upsell line on your spouse or friend before you try it on a prospect to be sure of this.) Use language that is benefit-focused when you explain the options, and always let them know that you appreciate their business and the decision is theirs to make.

5. Package your offerings right in the first place.

Services that should be included in the base price, well, should be included in your base price. Don’t confuse upselling with what should have been in your package in the first place. That’s how most customers feel cheated during upsells.

Tracking the Upsell

There are a couple of ways you can track your upsell results. If you offer every client who bought “x” the “y” product, you can compute a conversion ratio based on your sales of x and y, assuming you keep them in separate buckets in your accounting system. You can do that for every upsell you have at the service line or product line level.

Another more general way to track upsells is to compute revenue per client on a monthly basis and see if it’s on the upswing. If you need help calculating either of these methods or setting up your services and products correctly to create the upsell tracking you want, please let us know how we can help.

Upselling is a vital part of every business. Fine-tune your processes with these tips and watch your sales increase and your clients become better served and more loyal.

Is Your Business Out of Balance?

You wouldn’t be in business if it weren’t for your clients. Yet, sometimes we almost forget that we are ultimately in business to receive a salary and to make a profit. In large companies, a balance must be maintained between serving clients and serving the shareholders. In your small business, the shareholder is YOU, so the pull is between you and your clients.

The question is, are you winning? Are your clients winning? Or is there a balance? Here are some tips to see if your business is out of balance, and if it is, how to get back in balance.

1. Pay yourself first.

This might sound very basic, but it’s surprising how many small business owners will pay everyone else first and then have nothing left over for themselves.  A recent client of mine realized how much her employees and assistants were cutting into her business margins on one particular service line. She cut back on her assistants’ time and employee hours, stopped doing some tasks that weren’t generating a return, and had more profit left over for her own paycheck.

The solution is to remember to always pay yourself first, literally, by cutting your payroll check or taking a regular draw from your business before you pay anyone else.

2. Price your services carefully.

Be sure that not only your costs and overhead are covered when you price, but that also a fair profit margin is left over for all your time and trouble. Too many people are pricing for the short term in this economy. Price for the long term, and emphasize the value you bring to your clients.

One example is to ask yourself whether you’ve made an adjustment for the higher gasoline rates. If not, you’ve just given yourself a pay cut. You probably wouldn’t work as an employee for someone else who gives you a pay cut; why tolerate it in your own business?

3. Maintain excellent time boundaries with clients.

If you charge by the hour, be sure you charge what you are worth. It’s typical not to charge for learning curve time, and writing off some of that time is fair. However, if you are constantly writing off time that you work on a client’s account, something is wrong.

Whenever you write off time that truly deserves to be billed, you are cheating your family out of your hard-earned money, taking time away from them, and spending your money and time on a customer instead. You are also misleading the client, who will be expecting you to be cheap in the future. I think we do this because we love pleasing our clients, but I think everyone would agree that family is where all of our true priorities lie.

This includes answering emails and phone calls for free and not writing down that time, giving bonus products, and other freebies. It’s one thing to make a conscious decision to be competitive and consistent across all clients and another to be sloppy in our recordkeeping or to say yes when we really meant to say no but didn’t have the courage. If you need help with setting up better time tracking or billing systems, give your us a call.

4. Don’t try to do it all yourself.

There’s power in numbers. There are a couple of options when hiring a team to help you get everything done:

1. Delegate the tasks that you do that are worth the lowest hourly rate on the market. For example, what are you doing that someone earning minimum wage could learn to do? This will free up your time for more strategic tasks or billable time.
2. Hire someone that you can receive at least a 4 to 1 return on salary. Your employee then becomes a profit center for you that is billable.

In either case, you are maintaining the balance by freeing up time and/or generating additional revenue as you incur additional costs.

5. Get a life outside work.

Unfortunately, our society is perfectly designed to promote workaholism. With devices we can access 24 /7, some of us can’t resist peeking to see what emails and text messages have come in even though it’s off hours.

Leave work behind during the evenings and weekends (or take time off regularly). Everyone needs to re-charge with social events, hobbies, and interests outside of work. You’ll be refreshed, well-rounded, and more creatively able to do your best work when you are serving clients.

Do any of these five tips speak to you about getting your business back in balance? If so, take the step toward making some changes. When you do, you’ll start to feel more in control, less burned out, and back in balance.

Seven Summer Projects That Can Heat Up Your Business

Summer is a great time for new projects that revitalize our lives.  If your spouse or family is creative, you may have a lot of those summer projects that require your time and attention at your home this season.  But what about a summer project for your business?  It could be just the thing to spice up your business and help you rejuvenate your staff and your energy at work. 

Here are seven ideas to help you heat things up at work and reap the rewards that result:

1. Move from reactive to proactive. Work on fine-tuning one small area of your business where you’re constantly experiencing fires. How can you anticipate and prevent these fires?  It might be putting some procedures in place, training staff, getting help from a vendor, or perhaps even firing a client that is too demanding.  When you take the first step toward prevention, even if it's a baby one, you've made a tremendous amount of progress toward controlling the situation rather than if you just remained in reactive mode. 
2. Look at one part of your processes and make a small improvement. I’ve just recently implemented these new articles in my newsletter (let us know how you like them).  That's one example of a really small change that I made in my processes that will improve my service to my customers.
3. Systematize something that's worked in the past and repeat it. No need to reinvent the wheel if you've found the magic formula. Do the magic formula over and over again, perhaps more often, and you'll increase your results. For example, if you're good at working with people on the phone, then write down the process you’re using so that you’re discovering what you say that customers like.  Then do it intentionally 100% of the time as part of your newly systematized process. 
4. Listen to your clients and roll out a new service offering that they are asking for. A huge part of the battle for getting new clients is getting people to trust you. Why not leverage the people who already trust you - your current clients - and serve them in a new way. Increasing your revenue per client is a great way to help your clients even more and to boost you bottom line at the same time.
5. Hone your skill. We spend a lot of time working on our core competency - the service we deliver to clients - and getting better at it. Why not get better at an accounting skill? This could include understanding reports better, learning how to job cost or product cost so that you understand your margins better, learning how to review accounts, and a host of other skills that will help you become more effective at analyzing your business’s financial data. Sometimes we forget accounting is a skill we can learn just like we know our core business - especially those of us who are reluctant about numbers. 

6. Measure. How do you know something is working unless you measure it? Add procedures to measure the results that are important to you; then you can begin to see where you need improvements. These include numbers such as revenue, expenses, cash flow, and profits down to the unit you want to measure them. When you do this you'll naturally be able to improve your financial results in your business.
7. Celebrate. Stop for a second when you reach a goal and celebrate all the hard work you did that paid off and got you there. Give yourself a reward, practice gratitude for what you received, and then set your next goal.

Which one of these projects speaks to you the most? Mark your summer calendar right now to take one step toward working this project into your summer plans so you can heat up your business.