Tag Archives: increase revenue

Upsell or Bait-and-Switch?

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As someone’s customer, which of the two following scenarios would you rather encounter?

You visit a merchant and spot a $10 item that you want and it seems like a pretty good value at that price. As you attempt to buy it, the salesperson (who may be the owner) directs your attention to a $30 item that is only vaguely like the one you picked out… and strongly suggests you buy it… or even better, buy both since there is very little overlap in their functionality.

OR

You visit a merchant and spot a $10 item that you want and it seems like a pretty good value at that price. As you attempt to buy it, the salesperson (who may be the owner) begins to ring it up and asks if you have the accessory that doubles its usefulness… but only costs $5. You admit that you don’t have the accessory and that does seem like a good deal, but you aren’t sure you will use it enough to get your money’s worth. The salesperson has simply stood by quietly while you consider.

If you are like most people, you will be unhappy, maybe even outraged in the first scenario, and appreciative in the second.

There is a name for each of these scenarios. The name for the first scenario is ‘bait and switch’. The name for the second is ‘upsell’. You want to avoid ‘bait and switch’ in your business, but offer ‘upsell’ whenever you can.

Bait and switch tries to get you to purchase a higher-priced item instead of what you came in for. It is based on maximizing profit and convenience for the vendor at the expense of the customer.

Upsell tries to be helpful to the customer (and respectful of him/her) in a mutually profitable way. In spite of the word ‘sell’ in the name, it is really a suggestion, not a sales pitch. Think “do you want fries with that?” (It also incrementally enhances the revenue of the business.)

If the additional item costs more than the price of the original item, then it is NOT an upsell. If it doesn’t “go with”, augment, or enhance the original item, then it is NOT an upsell, either.

In my classes, I like to use the example of the suit salesman who AFTER an appropriate suit is selected THEN asks if you need a shirt, a tie, or cufflinks along with the suit. Another example is the shoe salesman who checks to see if you need socks AFTER you have selected a pair of shoes. (Sometimes they suggest shoe trees rather than socks.)

It doesn’t matter whether you offer a product or a service; whether you sell to consumers or to another business; it doesn’t matter whether your average sales item is $10 or $10,000 — nearly every business can offer an upsell to their customers/clients. If you don’t have something you can offer, you just exposed a gap in your line.

Whatever YOUR business is, there are opportunities for you to incrementally increase your sales by offering an upsell. Just make sure you don’t go overboard and turn it into a bait and switch.


Don’t have an upsell… or need help crafting your offers? Contact me and let’s see if I can help you. I promise, no bait and switch. ;-)

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Get Clear on Your Goals

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In The 7 Mistakes That Sabotage Your Success™ I talk about goals and the need for clarity. And it’s true. You do need to be clear on your goals as a first step. But there is more to goal-setting than just clarity. You also need specificity.

Specificity (which is a difficult word to pronounce properly, by the way) is about being specific in your goals.

It’s not enough to want your business to increase its revenue next year. You need to set a target amount for the increase. That amount could be in absolute currency amount (additional 50,000 dollars) or it could be as a factor (half again the revenue of this year).

Maybe you don’t care as much about revenue as you do about profits. After all, if you could make twice as much money on what you sell would it matter if you sold fewer units (as long as you sold more than half what you do now)? Probably not, since most people are looking for more money for less work.

(If you have a problem with the idea of selling less but getting more for it, you may be encountering Mistake 2 – Ignoring Roadblocks. Check out the 7 Mistakes Audio for more on that.)

But you don’t get to that (selling fewer units but making the same net revenue) by chance. You have to set that as a specific goal.

And, yes, it could be to have twice the margin on your units in order to meet that scenario. But it could also be achieved by increasing revenue, reducing overhead, improving your marketing to reduce customer acquisition costs…. You don’t have to know HOW you will achieve your goal. But you do need to be specific in the results you want.

Or perhaps your goal is new customers. In that case, just being clear that you want more new customers next year won’t be very effective for you. Would you be satisfied if you got two additional customers next year? After all, that satisfied the (implied) goal of more than one new customer.

If that isn’t what you really want/mean, then say what you mean. Say what you really want. Be specific. “I want 10 new high-dollar customers next year, each one bringing at least $100,000 in gross sales of business for me.” You are much more likely to see an increase in both customers and revenue with that goal.

But there can be a problem with a goal like that. We’ll talk about it next time.

What are your goals? Share them with us in the comments. You’ll be surprised what just writing them out for us will do for you.

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Cost-cutting or Revenue Growth as the Way Forward?

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You may recall my earlier post where I referenced a letter to the editor by a Twenty-Something (implied) who was out of a job and was very frustrated that he couldn’t find work with his associates degree. And then the next post where I discussed his suggestion that the economy is in shambles. Today, I want to address the business perspective.

As I was preparing this post, I serendipitously ran across a column by Ed Wallace, host of Wheels radio show, columnist, and long-time authority in the automotive business. In his column titled “Yesterday, Today, and Tomorrow, Part 1″, Ed provides some analysis that fits between the “Shambles” post I wrote and today’s post.

Ed opens his piece

As long-time followers of this column may remember, for years in front of the financial meltdown I was reporting that the economy was not exactly as it was being presented. Today, we’ve been hearing for almost a month that the nation is slipping back into a second recession or worse, but that reporting doesn’t really align with facts that have been validated.

And later

Likewise, did anyone notice that after three and a half weeks of solidly negative economic predictions, often from the analysts closely aligned with Wall Street, suddenly the stock market posted its strongest gains in a year? That was the only signal we got of the huge disparity between the positions these entities were espousing from June 10 to July 3 and what they were doing with their own investment monies.

And then

This brings up the real question, that being the debate on government spending during an extended, widespread downturn in demand.

….

While it is true that excessive government spending kept the most recent downturn from becoming much worse, it has not returned full economic health and more normal spending habits to those families earning $50,000 or less a year. Additionally, keeping federal deficits massive does seem to fall into the category of “kicking the litter down the road” for someone else to clean up at some unknown point in the future.

For those demanding fiscal austerity, that’s exactly what individual states are being forced to do right now as they try to balance their budgets; and here we find this strategy’s downsides. Mainly, it won’t improve our overall economy anytime soon. The tough and sadly necessary cuts being made everywhere from New York to Texas to California will lead to higher unemployment (of good-paying jobs) fairly quickly. And the withdrawal of billions of dollars in state spending could further slow down the states’ recoveries for years to come.

I’m not going to tell you where he goes after that… I encourage you to read it yourself.

I’m not telling the rest of his story because I want to veer a different way here. I want to apply this to your business.

Can you make a case for cost-cutting in your business? Absolutely. Will cost-cutting make up for a lack of sales? Never. You can cut costs to a certain point but after that, you are no longer “lean and mean” but “starving and cranky”. Certainly, pick the low-hanging fruit of cost-savings in your business. By all means, give some attention to doing more with less.

But, more importantly, spend most of your attention on getting more customers to buy from you. The lion’s share of your efforts should be in marketing, creating value for your customers, and winning their business.

Why? Because you can’t save your way to increased revenue. But didn’t Benjamin Franklin say “A penny saved is a penny earned.”? Yes he did. And it is true… to a point. After that point, if you don’t have revenue coming in, you will be saving yourself (earning your way in Franklin’s terms) to bankruptcy.

Balance is that key here… but not a 50-50 balance. I would suggest you apply the 80-20 rule. Spend 80 percent of your available time and efforts on increasing revenue and 20 percent of your available time on cost-savings. When you do that, you get the best of both worlds.

What are you doing in your business to maintain that balance? Are you using a different formula? Is it working? Use the comments and fill us in.

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