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It’s Only Common Sense: Upselling—The Magic Road to Profitability

Everyone upsells. It’s the best way to increase your margins. The famous, “Do you want fries with that?” line is a classic upsell. Super-sizing is upselling. That maintenance plan on your washer and dryer is upselling. That rust coating on your car is upselling.

Last Sunday, we went to the mattress store to buy a new mattress and box spring set. If you ever want to know what upselling is, go to a mattress store. My target price for a mattress and box spring set is always $1,000—I am not interested in one of those “choose your number” $6,000+ rip-off mattresses. The set we were looking at was $900 for the mattress. When we asked about the box spring, the salesperson said it would be free because we were good customers. Wow, that sounds great!

Then he tells us that they are having a Labor Day sale and we’ll get another $200 off because for some reason, Labor Day weekend is the number one mattress sales day of the year—who knew? Man, we were cooking; we had it down to $700. But wait! There was more. He could give us a great deal on a mattress protection plan that was normally $300, but on that day it would only be $200. Of course, we had to take it. Who knows what could happen to a mattress?

Now we’re back up to $900. Then he says we have to have a special mattress cover—another $100—and asks us if we plan on taking the mattress and box spring set home with us today. Since he can see my red Jeep Wrangler parked in front of the window, he knows that we are not. Instead, he proposes delivery and removal of the old mattress for only $100. What a deal. And there you have it—the best upselling deal on the market today. $1,100 for a mattress that once cost only $900. Pretty good deal, right? That, my friends, is upselling at its very best.

This leads me to the question—what are we doing about upselling in our industry? Please don’t tell me that upselling scenarios do not apply to our business. That is simply not true.

To prove it, here are three examples of opportunities for upselling in our businesses:

• When negotiating a price on a new purchase order for PCBs, use the economies of scale to sell more product. Point out the savings if the customer buys 20 boards instead of the 12 they need. Due to MRP systems, it will not work all the time, but it will work at least 20% of the time and also plants the seed in the buyer’s mind that it is cheaper to buy 20 boards than 12 boards. The next time the customer works on their MRP, they can insert that fact into the system. It also helps them make a mental note that you will probably have an additional eight boards in stock that they can count on if they need them in the future.
• When a customer orders 12 boards and you successfully built 20 to get 12, sell the other eight at a discount. Sell them right away since they are not going to do you any good sitting on that stockroom shelf. With things moving so quickly these days, chances are good that the revision will change and the same boards will be worthless in six months.
• Speaking of revision changes, keep a running inventory of what you have in stock, how long it has been there, and have your sales team check with your customers to see if they have a need for the part numbers in stock. Make them an offer they can’t refuse.

These are only three of the many ways that we can upsell in our industry. Every time a customer needs boards faster than your normal lead times is an opportunity to upsell. When your customer needs to make a revision change in the mid-production process is an opportunity to upsell. The theory is very simple—once a customer has agreed to buy from you, make it attractive to buy more from you. They have already said yes. They are already a customer. Now it’s up to you to say, “But wait! There’s more.”

It’s only common sense. 

Dan Beaulieu is president of D.B. Management Group. To read past columns or contact Beaulieu, click here.