Increasing Lifetime Customer Value (sales funnels explained) Pt 2

How to Use Them Effectively

There are a lot of sellers who are using upselling techniques in ways that simply make customers mad. You don’t want to do that. You want your customers to feel good about their purchase. Follow these tips to ensure that you use the techniques effectively.

• Know Your Customer – You may get tired of hearing it, but you really need to research your customers continuously. Don’t just research them at start-up and then assume they haven’t changed in some way. Think about the difference in how TV commercials look today for some products compared to 30 years ago, for example. A good one to look at is Dove. Dove has the same audience it’s always had, demographically speaking. But their marketing has changed, because their audiences’ values have changed.
• Understand Your Products – As you create more products for your audience, you should know how they relate to each other. For example, if you wrote the guide for sales funnels, how does your “create a lead magnet” guide match up to it, and would the same customers want both products? Knowing how things go together will help you write better marketing copy.
• Ensure That They’re Related – When you offer an upsell, downsell or cross-sell, the items must be related in some way, and you should be able to explain how they’re related to your customer so they can make a good choice. If they’re not related, they won’t really work because it’s not what your audience is looking to buy.
• Help Your Customers Feel Like Winners – Your job as a seller of any type of product is to improve your customers’ lives and make them feel like they won something even though they paid for it. The more help you can give them to make their dreams come true, the happier they’ll become.
• Limit How Many You Offer – This is where knowing your audience and your products come into play. You need to understand how their minds work during their buying journey. How do they feel when they see your sales pages, go to your shopping cart and are offered additional or replacement products? You can only know by asking them. But, for the most part, you want to limit your immediate offers to one or two. Remember, you can always remarket to them later once they’re on your list.
• Use Your Shopping Cart – Many shopping cart solutions can offer additional products at checkout. In any case, most at least offer you the ability to send buyers or those who leave the system to certain URLs which can enable you to provide the additional or replacement offer. In the shopping cart, cross-sells work better than other methods, so you’ll want to implement that.
• Use Bundling – One good way to offer your customers a variation on your offer (and this can work with all forms of upselling and cross-selling), is to combine offers into one big bundle to offer them an “all-in-one” option that doesn’t break the bank but adds to your revenue nicely.
• Know Your Pricing – When you begin to offer upsells, cross-sells, and downsells, it’s important to really understand your pricing and create a pricing strategy that involves value-based pricing that your customers understand.
• Make It Seamless – Don’t make the process very difficult for your customers to understand. If you make the checkout process too confusing, they may abandon buying at all. Try to make the checkout process smooth so that nothing stops them from finishing the purchase.
• Don’t Be a Pest – You’ve likely experienced it. You wanted to buy that great new WordPress plugin so and so offered. You hit “buy”, and then before you could really buy you were offered more. Then you must click, “no, I don’t want more” a few times before you can check out. This is not a good way to get on the good side of your customers.

How to Position Yourself for the Biggest ROI

The truth is, in many ways selling is just mathematics with some persuasive writing thrown in. If you’ve convinced someone to buy, it’s now time to offer them more. Because they’re in a buying frame of mind when they click “add-to-cart”, it’s best not to just toss them aside. Instead, you want to get more out of the relationship and offer them more as well. It’s a win-win situation.

• Use Email Marketing – One of the best ways to get your customers to buy more from you is to make some of your new offers via email. For example, when someone buys product A and they didn’t take advantage of your immediate upsell opportunity, you can market to them that very thing via email within a week or two of their purchase.
• Offer Discounts on Upsells – If someone is already your customer, consider offering discounts on upsells. So, for example, if you normally sell item D for $997 and your customer is trying to buy item B for $497, and item D is a bigger, better, more awesome version of B, let them know and then offer them a discount. Perhaps you can halve the difference. If it’s a digital product, your expenses don’t go up.
• Promote Only Relevant Products and Services – Don’t confuse your customers by offering items that have nothing to do with the product they want to buy. If you were buying a car, it doesn’t make sense that they’d throw in a dishwasher. But it does make sense if you’re buying a house.
• Build Relationships – One way to encourage your customers to buy more is to get them to join your communities. For example, you can start a Facebook group for your customers where you give added value in the form of live events, tips, and more.
• Offer Exclusivity – One thing that all customers love is the feeling of being in on something that is exclusive. They like feeling included. They like feeling special. If you can provide offers that won’t be offered to the public (or them again for that matter), then you can evoke the idea of exclusivity and scarcity.
• Create Behavioral Triggers – You can set up your entire website, shopping carts, and autoresponders to react in certain ways based on what your customer does. If they click to join your email list, they get an email. If they buy product C, they get specific emails geared toward people who bought C and now need F.

When Not to Make Additional Offers

While upselling and its cousins have been around for ages, some people do take offense at it and think it’s some sort of scam. You can avoid that impression by knowing when you should not make any additional offers to your customer.

• When You Feel the Need to Pressure – If you feel like you need to threaten or use harsh language to make your buyers buy more, it’s probably not a good idea to offer any sort of upsell like that. You want your customers to feel happy about the upsell, not angry. No one likes being told their stupid. You’ve seen the trend to put something snarky in the “no” box such as “No, I don’t want to earn more money.” That’s ridiculous and not very friendly.
• When It Would Be Disrespectful – If you make a sale by being extremely pushy, it’s very disrespectful to the buyer. It shows that you don’t care about your customer at all. Customers are humans and should be treated as if they’re special. If you call them names or insult them to push them into buying, you’re doing the wrong thing when it comes to effective upselling.
• When Your Customer Has a Complaint – If you receive a complaint from a customer, it’s not the time to offer them an upsell to solve their problem. It’s commendable if you have products that will help them better than the one they bought, but it’s not really the time to tell them unless you’re willing to give them the product instead of giving a refund.
• When You Can’t Add Value – If your upsell, cross-sell, or even downsell doesn’t add value to your customers’ life, then what’s the point of it? Your job is always to put your customers’ needs first. You want to always seek to build trust with them by not wasting their time with things that send them off to another path instead of the path you’ve set within your product funnel.
• When It’s Not Ethical – If you feel uncomfortable in any way by making an offer to your audience, just don’t do it. You need to be honest with your audience – always. You don’t want to offer them any type of product or service that is questionable. If you stick to this, you’ll reap the rewards by earning more faith and trust from your customers.
• When the Upsell Is Needed to Make the Product Useful – The worst upsell trend that has come along is the upsell that is required to make the first purchase work fully. Now let’s be clear – this is common practice with software demos where they don’t work as fully until you pay. This isn’t about different levels of software or product access, though. This is about paying good money for a product that won’t even work without an expensive upsell. This is not fair to your customers at all.
• When You Can’t Be Transparent – If you can’t be fully transparent and feel the need to lie about limiting sales, never selling for less, or other things that you have no intention of sticking to, this is not only dishonest but can also end up ruining your entire business. There is no need to lie about anything if you have a good product or service.

In the final post in this series, we’ll look at some of the tools that you can use to simplify all of this and how to upsell and downsell successfully…

Increasing Lifetime Customer Value (sales funnels explained) Pt 1

If you have ever been to a restaurant or fast food chain you have probably been exposed to a “sales funnel.” Think about it; when you go out to eat don’t they always try to get you to buy dessert or have fries with that? And when you shop at retail stores they always try to get you to buy one more thing as you are checking out, normally something which enhances your original purchase.

These are basically cross-sells and are a tried-and-true way of increasing the value of your shopping cart; in short, they are a sales funnel at work. In this series of 3 posts, we’re going to discuss this and two other ways to increase your profits.

What Are These Types of Sale?

What we’re talking about is the practice of encouraging customers to purchase either products which enhance the original purchase at a fraction of the original cost (add-on), or more expensive products (upsell), less expensive alternatives or entry level (downsell), or just additional products – sometimes complementary and sometimes just related (cross-sell). In other words:

• Add-on – Encourage customer to buy additional product which further enhances the original purchase but at a fraction of the cost e.g. accessories.
• Upsell – Encourage customer to buy a more expensive item instead of the item they thought they wanted.
• Downsell – Encourage customer to buy a less expensive item if they are wavering about buying the first item.
• Cross-Sell – Encourage customer to buy additional products, sometimes complementary to the first purchase but sometimes just related products or services.

It’s important to understand how and why each of these practices helps increase your revenue. Even if you get the terms mixed up, as many people do, these options should always exist in your business practices. Luckily, with technology it’s easy to set up your funnel so that all of this is automatic.

How Do They Work?

Most people who are in a buying frame of mind don’t really like leaving without anything. They also like to feel as if they’re on the inside and getting a good deal. As a business owner, you want to ensure that you never leave money on the table. As a customer, you want to ensure that you get a good deal.

• Add-on Example – Let’s say that you sell digital products online, and you are promoting your “Guide to Sales Funnels” for $27 dollars and your customer clicks on that item to purchase it. When they checkout, you may also have a handy checklist to help them implement the training quicker and easier and you offer this for $17. And because this enhances the original offer AND is cheaper, many buyers will take you up on the add-on offer.

• Upsell Example – Let’s say that with your “Guide to Sales Funnels” you also have a “done-for-you” option for $127. This means that right at checkout, you can offer anyone wanting to buy the 27-dollar guide the option to upgrade to the “done-for-you” option and get the guide for free. This is a wonderful example of upselling.
• Downsell Example – Let’s say that your customer goes to the sales page for the 127-dollar offer for the done-for-you sales funnels, but they’re not really ready, so they leave the shopping cart without checking out. You can set up the page to send them directly to the 27-dollar guide offer, or you can use remarketing ads and send them to the 27-dollar guide offer.
• Cross-Sell Example – With either of these options, you can include some additional options. Right on the checkout page or after they check out, you can send them to the download page where you can offer additional items to them. Either way, these additional items are somehow related to the same topic as the original offer.

So, for example, you may have an affiliate link to software such as Leadpages.net or ClickFunnels.com that you can recommend. Or, you may have a graphics package that will work for them to help create their sales funnels that you can promote now. Or, any number of reports, books, or offers that relate. The point is that the offer is in addition to whatever they’re buying.

Getting Started with Upselling, Cross-selling, and Downselling

The key to creating just the right sale at the right time is to understand your customers’ buying process. But, unlike most sellers, you’re not going to stop when they choose to buy.

Most buying processes are similar and look something like this:

• Awareness – How does your customer find out about your offerings? They usually search the internet, ask friends, or look on social media. This means that you’ll need to have social media updates, blog posts, articles, and information out there so that your customer learns about your solution.
• Investigation – When your customer is doing their research, you want to ensure that you have enough information for them. Usually, at this point they might sign up for your email list to get a white paper, eBook, view a webinar or get other types of industry reports that you’ve created.
• Evaluation – At this point your customer likely has signed up for other people’s lists too, so you need to ensure that you are filling in all the gaps of information by offering case studies, demos, testimonials, free samples and anything you can reasonably offer so that they can make the choice you want them to make.
• Commitment – Finally your customer decides to buy what you’re offering. This is where most people stop. But this is not where you will stop if you learn to create powerful funnels using upsells, cross-sells, and downsells to keep people inside your funnel and increase their lifetime value.

Once you’ve worked out your customers’ buying cycle, you can focus on what happens after commitment. What do you do after they buy? Now is the time to focus on upselling and cross-selling. Depending on what they’ve bought, you should determine whether customers who buy that item will want additional add-on items that you can cross-sell, or whether you have a bigger and better offer for them that they can switch to.

In the next post, we’ll look at how to best use these effectively and how to position yourself for the biggest Return On Investment (ROI)…