Everyone has a high-school teacher that says something that influences them for the rest of their adult life. The teacher in my life just happened to be an eccentric alcoholic who taught an “Introduction to Business” class when I was fifteen years old.
Each afternoon we would take our seats and sit through a wild session where he ranted and raved and opened up our teenage eyes to the possibilities that owning your own business could bring.
One day he began talking about selling goods at a hardware store and asked the class if we knew how to increase the profit from each sale. Of course, at that age, we had no idea, or if we did, no one was brave enough to take a guess. But what he said next has stuck with me for over two decades.
“If you’re the owner of the store,” he explained, “And someone comes in to buy a ladder for a painting project, the most profitable thing you can do is sell them a couple of paintbrushes at the same time. All the expenses will be paid by the initial purchase and the sale of the brushes will be pure profit. You must always be prepared to sell something else to your customers.”
Over ten years before I read my first issue of Early To Rise, heard about Dan Kennedy, or read an email from Yanik Silver, I learned one of the most profitable business tips from a tiny little leprechaun-like alcoholic high-school business teacher. He had revealed the power of the upsell.
Years later, when I began my Internet business, I would finally see the importance of immediately offering more value to a customer who had just bought. In the summer of 2006, with the help of my first one-on-one business coach, we re-launched my fitness product with a three-day promotion. Included in our revamped sales system was an upsell process and over 55% of customers chose to take the second offer.
More recently, during my 247FatLoss.com product launch, we increased total profit (after all affiliate commissions, merchant fees, and expenses) by over 27% thanks to our upsell flow – and that doesn’t include the upcoming monthly income we’ll make with the rebills from our community membership site (which was one of the offers in the upsell flow).
However, despite as obvious as adding upsells to a business might seem, I still know multi-million dollar companies that neglect this instantly profitable addition to their sales system. But there is absolutely NO reason to be missing out on this profit. It’s quite possibly the easiest money you could be making.
As my Internet mentor, Yanik Silver writes in Maverick Business Rule #22, “Always have something else to sell (via upsell, cross-sell, follow-up offer, etc.) whenever a transaction takes place. The hottest buyer in the world is one who just gave you money.”
But don’t think this information is only for online businesses. If you run a brick and mortar store your sales team should have well-crafted and tested sales scripts that offer upsells to customers.
Today, web-based business upsells (or “bumps” as one of my other business partners likes to call them) are extremely easy to offer via an effective “one-click” method. If you’ve ever shopped on Amazon, you know how powerful this can be. You go to that site to purchase one book, and thanks to their recommendations and the ease of one-click purchasing, you leave the site with four books or more. I know I’m not the only who has an entire shelf (or two) of unread books from Amazon thanks to this system.
In your business, whether you use a payment system like InfusionSoft, 1ShoppingCart, or Clickbank, each of these allows you to have a similar one-click upsell system in place where you MUST be offering your clients additional value to go with their original purchase.
As my high-school teacher explained back in the early 1990’s, the additional offer should be related to the initial purchase. He suggested paintbrushes to go with the ladder. Today, when putting together your upsell flow, you should consider the following sequence.
Your first upsell offer should be something that accelerates success. What extra value can you provide the customer that will help them get faster results? In our Financial Independence Monthly program, we were able to offer a Fast Start Coaching program.
Your second bump should offer automatic results. What can you sell your customer that gives them “done-for-you” results? In our fitness business, we offered follow-along workout videos and done-for-you meal plans. (We still haven’t figured out how to do the workouts FOR the clients so that they could get results from our exercise sessions, but when we do, boy, watch out. That upsell will have a 100% take rate.)
The final upsell in your system could be for a monthly recurring revenue offer. What can you create to provide continuing value to your customers on a weekly or monthly basis? With Financial Independence Monthly, we offered the weekly ETR Premium, where readers receive a three-to-five page report every Monday on my hottest new business discoveries. In my fitness business, we’ve created a membership community that offers a new workout of the month, plus a forum, and many other benefits.
Having upsells in place enables you to increase the average customer value. This makes your offer more attractive to affiliates and allows you to persuade other business owners to promote your product so that you can grow your customer list.
For example, let’s say that your business and your main competitor both sell a similar product for $47. However, if your business offers a $29.95 accelerator upsell offer (something that helps the client get results faster), a $39.95 automation upsell offer (giving the client a done-for-you version of the solution), and a low-priced $9.95 continuity offer (giving the customer monthly services or value of some kind), then you have the potential to increase your total customer value to over $125.
By dramatically increasing your average customer value, not only do you increase your profits, but you now have dramatically more money to invest back into marketing for your business so that you can acquire new customers.
Upsells can completely change the landscape of your business and give you a dramatic advantage over your competitors. They simply won’t be able to compete with you in marketing and advertising because you are bringing in so much more revenue per sale.
And this is just the tip of the iceberg. There are many, many additional steps in the sales process that my business partners and I have used during our recent product launches to increase average customer value. I’ll be sharing these steps in the November issue of Financial Independence Monthly where I’ve done a complete CSI-worthy autopsy of our recent 247FatLoss.com product launch to show you how to almost instantly increase the pure profit in your business.
At first you might be a little upset at how much money you’ve been letting slip through your hands in the sale process, but after you implement these changes, you’ll be ready to raise a glass with my old high-school teacher in celebration of the pure profit that is soon to be coming your way.[You’ll receive a complete autopsy of a six-figure product launch – with no gory details held back – in the November issue of Financial Independence Monthly (FIM). Learn more about FIM and how it can help you create control over your future by watching this unique presentation. This is the most important video you’ll ever watch when it comes to your financial independence. Don’t miss the unbelievable twist at the end of the video here.]