As any business owner knows, it is much more expensive to acquire new customers than to retain current customers. While customer retention efforts are certainly important to maintain that steady stream of income, there’s also a huge potential for increasing revenue through cross-selling and upselling to existing customers. In fact, a recent HubSpot survey indicated that sales professionals who employ upselling and cross-selling tactics report a 30% increase to their overall revenue.
All to say, this can be very lucrative to your sales teams as well. In order to make sure that your sales team is focusing significant efforts on cross-selling and upselling, it’s important to have a desirable compensation plan to motivate your sales reps.
What is Cross-Selling?
In most cases, when closing a deal, a sales rep will attempt to promote additional products or services that will complement the purchase a customer is making. This is known as cross-selling. The goal with cross-selling is to present relevant products that will enhance the customer’s overall experience with their primary purchase.
For example, a customer purchasing a laptop, may also be interested in a carrying case, a wireless mouse, or a hard drive.
Cross-selling is not solely about pushing products for the sake of increasing sales, it is also about understanding the customer’s needs and desires. It is the sales rep’s responsibility to understand not only the products that they are selling, but also how the consumer will be using the product, so they can offer additional solutions that make the purchase more valuable to the consumer. This in turn can actually improve customer satisfaction.
What is Upselling?
Upselling, on the other hand, revolves around encouraging customers to purchase a more expensive version or an upgraded model of the product or service they are interested in. The primary objective of upselling is to enhance the customer’s experience by offering superior features, higher quality, or better performance.
Using a similar example as above, imagine a customer browsing for a laptop with specific specifications. An upselling approach might propose a higher-tier laptop with advanced processing power, improved graphics, or additional memory. The aim is to demonstrate the added value of investing more in a premium version, leading to a more satisfactory and fulfilling purchase for the customer.
How to Incentivize Cross-Selling & Upselling to Sales Reps
Cross-selling and upselling are win-wins to both the company and the sales rep. The company generates more revenue with less effort, and the sales reps take home bigger commission checks. However, if the incentives for cross-selling and upselling are less than desirable, sales reps may simply skip over this step.
Here’s how to increase motivation to cross-sell & upsell:
Offer Bonuses: Instead of using a percentage-based commission, it may be more motivating to offer bonuses or flat amounts on certain products. If the product being added onto the sale only offers a minimal increase to their overall commission, there may be little motivation to encourage the customer to purchase it. Offering an additional incentive when sales reps practice upselling and cross-selling will encourage them to focus more attention on these efforts, resulting in a higher revenue and increased customer satisfaction.
Implement Sales Contests: A sales contest can be a very effective way to motivate your sales team to upsell and cross-sell to customers. Structure the contest so that the employee who sells the most through these efforts wins a bonus, a gift card, or even a non-monetary gift such as an extra day of PTO.
Commission Tiers: Commission tiers can be useful for inspiring increased sales among your reps, especially when it comes to focusing on upselling and cross-selling tactics. Add a stipulation to your commission tiers incorporating cross-selling and upselling, so your rep is required to focus on these efforts in order to unlock the next level.
Split Commissions Fairly: When it comes to cross-selling and upselling, there may be more than one sales rep involved. It is all dependent on the type of product or service being sold, but there may be reps who play different roles during the sale process. An example of this may be a car sales rep who sells the vehicle, but the finance manager handling the paperwork upsells the customer on a warranty plan for the vehicle. In cases where multiple people are involved with interacting with the customer, it’s important to split the commissions fairly, otherwise it could be demotivating to team members selling the lower value item.
Easily Track Upselling & Cross-Selling Efforts
By properly incentivizing your sales team to focus on upselling and cross-selling, you can effectively increase both your sales revenue and the overall performance of your sales team.
To ensure that your sales reps receive accurate incentive pay for upselling and cross-selling, it’s important to have a reliable system that allows you to delineate these types of sales with ease.
Core Commissions’ customizable sales compensation platform makes it simple to organize sales into specific categories to make tracking commissions and other incentive earnings on cross-selling and upselling simple. Core’s employee portal also gives your reps complete visibility to see their pay details at any time with live data.
Contact us for more information on Core Commission can help track your sales compensation and streamline your sales reporting.