Here at CFO Advisory, we try to achieve the maximum positive effect for our clients. Our Marketing Consultants are always ready to recommend this tested and proven tactic. Up-sell is magical. It requires the minimal effort and at absolutely no cost. The reward , on the other hand, is substantial in both sales and, more importantly, profits.
The best way to explain up-selling is to exemplify it. The ideal situation is a fast food restaurant such as McDonald’s and their up-sell technique. Let’s say you order any of their meals on standard offer. The first thing you hear from the person taking your order is: “Would you like the large portion?” and voila.
It might not sound as if it would blow your profit through the roof, but there is something that every Business Consultant knows and you still do not. With these carefully selected words uttered at a specific time, McDonald’s manages to generate an up-sell to which 30-40% of their customers say yes. To put it in plain words, 40% of their customers end up spending more money than they originally intended.
This is the essence of an up-sell – moving the customer up to a bigger purchase or larger quantity. Why would the customers do that? The answer is to take the advantage of a deal with a perceived preferential price. They feel that they have made a purchase of added value at the more-less same cost.
From McDonald’s perspective, it looks a bit different. The price difference between a regular portion and a large portion is, let’s say, a single dollar. The cost for McDonald’s to provide their customer with a large portion is only 10 cents higher than that of a regular portion. McDonald’s is. therefore, making a 90-cent profit simply by adding 6 words to their rehearsed customer service.
How is this possible? Timing is everything. The up-sell statement was used right after the person had decided to make a purchase. At this time, your average consumer is in ‘buying mode’, which is also when the consumer is more susceptible to an up-sell.
The world of business is full of up-sells and cross-sells that cost very little to implement, but can still improve your sales and profits. The best ideas are right there to be utilised and CFO Advisory employs such Business Advisors that can help your business in a similar fashion.