Upselling can be a differentiator for employees, customers, and your businesses growth. Find out what upselling means, and how to get started.

What is Upselling?

Upselling is when a brand persuades a customer to purchase a higher-priced version of the item they intended to buy. Upselling can happen in-person, online, and in all price categories. The barista at Starbucks who convinces you to go for Venti instead of Grande upsells. So does the airline website that gets you to upgrade from economy to business with a good deal.

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Why is upselling important?

Upselling increases revenue. But that's not the only nor the most important rationale for using this sales tactic. Here are the three main reasons why upselling helps your business.

1. Upselling creates value for customers and loyalty for brands

Upselling works when you suggest an upgrade that addresses your customer's needs better than their intended purchase – despite the higher price tag.

When you provide such recommendations at the right time to the right customer, they'll feel understood, which increases trust and loyalty.

2. Upselling is easier and cheaper than customer acquisition

You can only upsell to someone who has or is about to buy from you. By definition, such customers trust you and need your offering. Otherwise, they wouldn't be purchasing. Convincing them of an upgrade that better meets their needs is easier than finding and selling to someone who has never heard of you.

You'll also have more relevant data on existing customers, which will help you propose the right upsell option. Even prospects who are about to make their first purchase might have already left some data you can use, for example, other product pages they've looked at before proceeding to check out.

3. Upselling increases revenue and LTV

Finally, upselling naturally brings in more revenue, as the customer buys a higher-priced option than they intended. But the benefits transcend that one sale.

Upselling increases loyalty – see point one above. Loyal customers stay with your company longer and spend more, so the practice also improves Customer Lifetime Value (CLV or LTV).

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