There are two ways to make more money in business: gain more customers or make more money per customer. Read our blog to find out more.
Both methods are a significant challenge for every company. Upselling (the practice of persuading a customer to purchase a more expensive product or upgrade) and cross-selling (where a customer is persuaded to purchase additional related products) have huge potential. When carried out correctly, these two processes can significantly increase average revenue per customer whilst making the customers feel as if they’ve nabbed a bargain. Every merchant knows that up-selling and cross-selling can be hugely risky. Point of sale software can provide some assistance, but you need to use it correctly for the best results.
One of the more powerful functions of point of sale software is the automatic display of associated products once a certain product is scanned. You can set associated products yourself, or your software might use an algorithm to try to suggest related products for you. In almost all cases, manually set product recommendations will be more useful (and accurate) for local builders’ merchants and other traders, as your business relies on the knowledge and expertise of your staff. You might suggest pricier but more reliable brands, or draw attention to an offer or discount on associated products. Your customers may thank you if you point out that a high-end product is on sale for a price that’s barely above the price of the product that they’d brought to the checkout.
Despite the value of having these recommendations at hand during the point of sale process, that information alone isn’t likely to improve your up-selling and cross-selling chances. Staff members must be aware of the added value the associated products provide, for example: “With this product we find a lot of customers also like to buy [other product] because [reason].” This sounds far more convincing than: “Would you like to buy Product X to go with Product Y?”
Further improve your chances to upsell and cross-sell by consulting a customer’s purchase history at the point of sale. You can take a look at items they’ve bought in the past, see if any are currently on offer, and let them know. This is an effective way to increase your revenue per customer, and if carried out correctly, the customer will think you’ve done them a favour. Even if the items they’ve purchased previously aren’t on offer, if they show up as an associated product then a customer will be more comfortable in purchasing them than something they’ve never bought before – so an upsell attempt is likely to be more successful.
Upsell and cross-sell rules
Even though your EPoS software can assist you with upselling, you’ll still need to follow the basic rules of upselling, including:
- Never ask for more than 25% extra than what the customer was previously expecting to pay.
- Improve your chances by avoiding yes/no questions such as “would you like to buy anything else?” Instead, explain the value of the more expensive or related products and see if customers take an interest.
- Use common sense. If a customer is clearly in a bad mood or has already been waiting in the shop for a while, don’t attempt an upsell.
- Batteries are the easiest upsell opportunity – if you’re selling a product that uses batteries but doesn’t include them, you have a great chance of securing an extra sale.
With EPoS software, upselling and cross-selling attempts are personalised and are more likely to be successful. For further point of sale software tips, check back to the Integrity Trader blog or contact your account manager.
Trader is an easy to use electronic point of sale system designed for the unique requirements of building, plumbing and timber merchants, hardware and DIY stores in the UK and Ireland.
Our team are ready to help with any queries or arrange a demo for you.