What is upselling: definition, examples, tactics, and benefits

As a salesperson, it’s important to get to know every client to best cater to their needs. Sometimes, you’ll notice they’re buying a product that is less than what they need.

To give them the best service possible, you might regard that their needs are beyond the product or service they are looking to buy and suggest a better, more comprehensive solution.

This is where upselling comes in. While it benefits both you and the customer, the advantages might not always seem obvious to the customer, so you need to use this technique carefully. 

In this article, we’ll talk about:

  • What upselling is,
  • When to upsell,
  • The 4 stages of upselling,
  • Best upselling techniques, and 
  • Why upselling is important.
What is upselling - cover

What is upselling?

Upselling is a sales technique that involves trying to make a better sale by offering a higher-end, upgraded version of a product, a product with additional features, or an upgraded service. It’s one of the best techniques you can use to directly increase sales revenues.

Upselling requires you to: 

  • Get to know your customer, 
  • Understand their needs and pain points better, and  
  • Suggest an upgraded product or an add-on that can help alleviate those pain points. 

For example, when selling a phone, you might suggest one that has a higher quality camera or better storage, in accordance with your customer’s needs.

What is the difference between upselling and cross-selling?

Cross-selling can seem similar to upselling at first, and while the distinction between them can be difficult to notice at first glance, they are starkly different. 

Cross-selling involves offering customers additional products that are complementary to the one you’re originally selling. 

While upselling seeks to enhance your experience by giving you a better version of the product, cross-selling seeks to do it by offering more products. 

You can think of upselling as quality selling and cross-selling as quantity selling.

For example, a salesperson using upselling might suggest to a client a better-quality washing machine with an integrated dryer. 

On the other hand, a cross-selling salesperson might recommend a more affordable washing machine, so they can offer a drying machine on top of that.

The difference betwen upselling and cross-selling
The difference between upselling and cross-selling

When to upsell? Upselling examples

Upselling is great for your business, but not everything can be sold using this technique. So, we’ve gathered some examples of the most appropriate products to upsell. 

However, you can use the reasoning behind these to determine upselling possibilities for any product.

Example #1: Technology

Almost anything that involves technology is easy to upsell. Tech products have a wide range of features, so you have a lot of room to determine specific pain points.

Phones, laptops, PCs, TVs, and even appliances like dishwashers and washing machines all fall under this category. 

Not only do they have plenty of features you can focus on, but most come in many versions focused on specific features as well — for example, a work laptop vs. a gaming laptop.

In your interactions with the customer, you want to determine which feature(s) you can focus on and try to sell an upgraded version of the product accordingly.

Some technology upsells would be:

  • A phone service provider offering a better phone when a client is renewing their contract,
  • Offering a higher-end camera to a film studio, with a higher shutter speed for fast-paced scenes, and
  • Offering an architecture student a higher-end laptop that can handle rendering more efficiently.

Example #2: Service industries

Upselling is very common in the service industry. You can most easily spot it in:

  • Restaurants, 
  • Hotels,
  • Airlines, 
  • Spas,
  • Cinemas, etc.

These industries can have straightforward upselling — like a hotel offering a better room for a similar price or added services with the room for a minor increase in price.

Similarly, it could be a restaurant offering to add ingredients to your meal for an extra price, for example: 

  • More fries, 
  • Refillable cups, or 
  • A different or better topping for your meal. 

All of these can be offered as an upgrade to what you’re already buying. 

Example #3: Software

Like physical technology products, software has the advantage of giving you many features to focus on when upselling. 

Software has a significant advantage over physical products though. For instance, it can have a free version. This option shows people what they can expect from a product while leaving room for upgrading to the features that are behind a paywall.

Once the customer notices they would benefit from a paid feature, upselling will go extremely smoothly.

Upselling opportunities in software can be:

  • Netflix’s more expensive plan offering Full or Ultra HD, upgrading the base plan’s HD video quality, 
  • Any software (like Duolingo, Songsterr, etc.) offering a premium plan to get rid of ads in their app, or
  • Cloud-based software offering more storage space in their premium plans.

Additional upselling examples

Some examples of upselling outside of these 3 categories could be:

  • Car dealerships offering a higher-quality vehicle that uses less gas and is more eco-friendly, or offering to add car insurance to the sale,
  • A real estate agent offering a better apartment in the client’s desired neighborhood as a larger unit would be better for a family,
  • An optics store offering prescription glasses with blue light filters instead of the regular ones with no filter, and
  • A furniture upholstering service offering higher-quality materials to their customers, listing comfort or easier maintenance as reasons for the upgrade.

💡 Plaky Pro Tip

If you want to learn more about sales and its importance, check out this informative interview, as well as a helpful article for sales project managers:

What are the 4 stages of upselling?

When upselling, you don’t want to jump straight into promoting the higher-quality product. 

You need to be careful with your approach, by dividing your upsell into 4 stages:

  • Focus on the original purchase,
  • Find a good upsell,
  • Introduce the upsell, and
  • Follow-up after the sale.

Stage #1: Focus on the original purchase

If you want to upsell, you have to have a customer who wants to buy something lower-quality first. So, the first step of upselling is to actually give the customer what they originally intended to buy.

In this stage, you need to focus on the customer more than on your products. This is the perfect time to find pain points that they’re trying to resolve with the product. You may want to ask yourself: 

  • Why do they need this product? 
  • What results are they expecting from it? 

The answers can range from something small — like wanting a good camera on their phone — to something more serious — like needing new software for their company.

From here on, you’ll know what to focus on when upselling.

Stage #2: Find a good upsell

Now that you’re aware of your customer’s needs, you’re ready to find a better alternative for them. 

The alternative needs to provide genuine value to them based on what they want. You should use all of the information you’ve gathered to pinpoint the perfect solution. 

Ideally, you’ll find an alternative that improves the quality of the initial product exactly where the customer needs it — but that’s less likely.

Instead, focus on finding a solution that improves on what they need and changes as little as possible where they don’t need it.

Familiarity is important to a customer, so if you suggest an upgrade that varies too much from the original buy, they’re less likely to accept it.

This is also the stage where you decide whether you want to upsell or cross-sell.

There are 3 major indicators of this decision:

  • What your capabilities are — if you don’t have any complementary items in store, you can’t cross-sell, for example. Think carefully about what you can offer your customer.
  • What brings the largest profit — if selling a better-quality PC brings a larger profit than trying to cross-sell more RAM to go with the initial PC, go for the upsell when appropriate.
  • What the customer needs — most importantly though, learn from your customer’s wishes. Analyze their needs, and you’ll know what decision is best.

Stage #3: Introduce the upsell

In this stage, you want to pitch the higher-quality product to your customer. 

Again, the information from the previous step will be crucial here. Reference your conversations and explain why it is that this product is more useful to them than the one they originally planned on buying. 

For example, you’re selling a PC to a customer who wants to play plenty of video games. During the conversation, you’ve concluded that ample storage and a good graphics card are what you can focus on in an upsell. 

When pitching this upsell, introduce the customer to the idea that less than a year from now, they might need to buy additional storage or a better graphics card to accommodate their needs. 

Instead of spending more money over an extended period, wouldn’t it be better to just get a higher-quality product now and save money in the long run?

If your communication with the customer flows successfully, by this point, you’ve earned their trust, so if you suggest a change, they will be more inclined to consider it.

💡 Plaky Pro Tip

Just like upselling is a delicate process, so is deciding on how to price your products. Check out this article on the best pricing strategies:

Stage #4: Follow up after the sale

Following up is crucial to a successful sale, as it shows loyalty to the client and further personalizes the interaction.

It’s important that every customer feels appreciated and seen. To achieve this, you need to make sure not to cut contact as soon as you get their money.

Follow up with your customer to see if they’re satisfied with their product, or if they’re having any difficulties you could help with. This goes a long way to increasing customer retention and boosting your reputation.

5 Best upselling techniques, tactics, and tips 

Upselling can be tricky to navigate, and if it goes wrong, a salesperson may come across as pushy. 

To help you approach it correctly, we’ve decided to gather some expert tips on how to improve your upselling technique.

#1: Personalize

Many sales techniques include personalization as an effective way of selling your product, but upselling depends on it. We spoke with Jon Morgan, CEO and Editor-in-Chief of Venture Smarter, on this topic, and he believes you should make every sale specific to the customer:

Jon Morgan headshot

“Tailoring your upsell offers to each customer’s specific needs and preferences is crucial. Utilize customer data and purchase history to recommend relevant products or services. By demonstrating that you understand their unique requirements, you increase the likelihood of a successful upsell.”

You need to understand what your customers want. Otherwise, if you try to offer them something they neither want nor need, you have no chance of making a successful upsell — but you increase your chances of aggravating them.

#2: Provide social proof

Before buying, customers have a tendency to check reviews of that product or service first. After all, when you decide to commit to something, you want to feel like you’re making the right decision. 

Jon explains how we can help the customers out in this process:

Jon Morgan headshot

“Share customer reviews and success stories related to your upsell options. When potential buyers see that others have benefited from the upsell, it builds trust and confidence in their decision to upgrade.”

The reputation of your product or service matters. So, you want to pay attention to it and always bring its benefits to the spotlight. 

#3: Highlight the value it could bring them

Have you ever seen a commercial for a new phone where they list all of their features suited for more than you can imagine and think to yourself — why would I even need this? 

Well, your customers will more often than not be thinking this way. Therefore, you need to show them how useful your product can be to them specifically, as Jon says:

Jon Morgan headshot

“Instead of merely focusing on the features of the upsell, emphasize the value it will bring to the customer. Explain how the additional product or service will solve their problems, save them time, or enhance their experience. Customers are more likely to buy when they perceive tangible benefits.”

Basically, focus more on the why than the what. 

For example, in the example of selling a washing machine with dryer capabilities, you may want to explain how having a 2-in-1 appliance saves space in your home or emphasize the fact that air drying becomes difficult in the winter months. 

You may also want to suggest the benefits of the wash-and-wear program, which allows your customers to have their clothes ready in 30 minutes.

#4: Help your customers get used to the product

A more high-end product usually means more features and capabilities. Many customers might be intimidated by all these features and wish to stay with the comfort of what they know, refusing the upsell.

To tackle this issue, Jon suggests we help the customers out in learning the new product:

Jon Morgan headshot

“Offer training and support resources for the upsell. If customers feel they will receive adequate assistance in implementing or using the additional product or service, they are more likely to commit to the upsell.”

Once you reassure them by offering help and assistance, the upsell doesn’t seem as scary, and the customer can continue with the buying process with less stress.

#5: Maintain communication with customers

Customers like to feel appreciated — which is why good customer service is the pillar of every business. So, you want to make sure they know you weren’t just going to take their money and disappear. Jon explains how to follow up:

Jon Morgan headshot

“After the initial purchase, maintain communication with the customer. Send targeted emails or notifications about relevant upsell opportunities, especially when new features or products are introduced.”

Let’s say, a couple of weeks ago, you successfully sold a paid plan for photo editing software. You tried talking the client into upgrading to a higher-tier plan, but they don’t need any features that it offers.

But, since then, your company rolled out new features on the higher-tier plan. So, you contact the client again, and — the features are just what they were missing. They decide to upgrade, and your upsell is successful.

This is why maintaining communication with customers is so important.

If there’s a separate product or service that rolled out, and it could be complementary to something you sold — it’s a good opportunity to cross-sell.

What are the benefits of upselling?

Obviously, any successful sale is good for your business, but why is upselling especially important? Some of the reasons include:

  • Increasing sales revenue,
  • Boosting customer retention, and
  • Improving your company’s reputation and brand awareness.

Benefit #1: Increasing sales revenue

As the most obvious benefit, upselling includes selling a higher-quality product at a higher price.

So, if done successfully, customers pay more than they originally intended.

Additionally, upselling can be, and often is, done with existing customers. It’s an effective way of getting additional purchases from the existing customer base. This is beneficial, as constantly seeking new customers is often expensive and time-consuming for any organization.

Benefit #2: Boosting customer retention

After a successful upsell, you should have a satisfied customer. That customer can quickly become a recurring one, and as we mentioned, might bring in more customers through word-of-mouth.

An often-mentioned Gartner Group statistic shows that 80% of revenue comes from 20% of customers, as Forbes states in their CRM analytics guide. This shows the importance of existing customers and customer retention

For a successful upsell, your communication has to be on-point, which means the customer will come out of it feeling like a value has been added to their purchase. Therefore, they’ll be inclined to continue business with you in the future.

💡 Plaky Pro Tip

If you want to improve your customer relationship management, you might want to consider using a CRM tool or a template to help you track customer interactions:

Benefit #3: Improving reputation and brand awareness 

As word-of-mouth or online reviews spread from your satisfied customers, your brand will gain a good reputation. Organic growth is not only extremely important to your business, it’s also the one customers appreciate the most.

This will, in turn, allow you to more easily sell to new customers, as you’ll have social proof of your service’s worth. The new customers will bring in new value in increasing reputation, and the wheel will keep spinning.

Conclusion: Use upselling to help both your company and your customers

By now, you’re aware of how upselling affects you and your customers. This method leaves you with a satisfied customer and increased profits.

In order to upsell successfully, stick to the tips you’ve seen in this article, research thoroughly, and most importantly — communicate well with your customers. They’re both your best source of information on how to approach them and your best learning experience for improving your technique.

✉️ Has this guide helped you improve your upselling skills? Have you ever tried upselling before, and how did it go? Let us know at blogfeedback@plaky.com, and we may include your answers in this or future posts. If you liked this blog post and found it useful, share it with someone you think would also benefit from it.