Team Alpha 375

"Persuasion is often more effectual than force."

Aesop

Upsells
By David Cross

Salt is a restaurant tucked away near Patterson Park in Baltimore. I ate there last week. I'd give it 8.5 points out of 10, which for me is a very good rating. The food was great and I received an immediate warm and friendly welcome by the owner, Jane. But it was my waitress, Theresa, who really made the evening.

She also reminded me of the importance of push marketing, which is what we do as direct marketers. We go out and find customers. Then we promote products, services, and ideas that are of interest to them. That is probably the business model you want to follow.

When I ordered, Theresa didn't just write it down, nod, and manage a "Yeah," like many waiters and waitresses do. She repeated my order back to me. As she did, she described each dish exactly, including the flavors and subtleties of how it would be prepared.

I knew I'd made the right choices, because Theresa immediately validated my decisions. And my taste buds were titillated as she expanded on the already-appetizing menu. Throughout the meal, she took a genuine interest in how everything tasted.

And now comes our marketing lesson...

I dislike being "sold to," don't you? But I do enjoy getting suggestions for things I might enjoy. Theresa took the opportunity to suggest drinks, appetizers, and side dishes that would complement my entree. And after I'd eaten, she conjured up visions of scrumptious desserts that I couldn't pass up. Those additions probably added $25 to my bill. All told, I'm guessing she pump's up Salt's sales by a few hundred thousand dollars every year. If the restaurant has three "Theresas," that means an additional 15 to 25 percent in profits.

But push marketing is not something you do once and rest on your laurels. Push marketing should permeate your online business. And at no time is this more important than when a customer is in the process of taking an action -- like making a purchase or signing up to receive information from you. That's because, at that hallowed time, your customer is much more likely to take the exact same action over again. How many times have you gone shopping for one thing and come back with many other items? (This is what Michael Masterson calls "The Buying Frenzy.")

When your customer is placing an order, do you take the order and nod? Or do you suggest things they may like that would complement their choice?

• Ordering a nice fountain pen? How about this lovely leather-bound notebook to go with it to record your important thoughts?

• Signing up for a one-year subscription to our newsletter? You'll love it! If you add a second year to your subscription right now, we'll knock off $50 and give you this free magnifying glass.

• We notice you're buying the Beginner's Trout Fishing Kit. Check out this beginner's guide to trout fishing written by our in-house trout fishing expert. It's yours for just $9.95 with the purchase of your kit.

I could list dozens of real-world examples off the top of my head. One upsell that you're probably familiar with is Amazon.com's Prime service -- which gives "members" unlimited two-day shipping on millions of items. (It's free for 30 days; $79/year thereafter.)

Companies that offer upsells generally increase their average per-transaction value by 15 to 30 percent. In other words, just by giving customers the opportunity to add something else when placing their order, an average customer order of, say, $87 is now worth $100 to $113.

Ready to start using upsells? Here are some tips:

• The cost of the upsell should generally be less than the cost of the primary item. Some marketers suggest that somewhere between a tenth to a third of the price of the original item is about the right price to test.

• Do it judiciously. Offering an upsell on every item in a shopping cart or in your e-mail pitches can be overwhelming (giving customers too many choices) and result in too high a final price (which means they may cancel their entire order). Start by testing one upsell on a popular item. You are trying to nudge up your overall average order value, not double it in one fell swoop!

• The upsell should be relevant to the primary item being sold. But if you want to test an overall "all items in cart upsell," check the stock in your garage or warehouse and offer something you already have.

Most shopping carts and e-mail marketing programs have upsell capabilities. Done correctly, it can boost your online business with very little extra work on your part.