Increase your profit in one easy step

I’ve recently completed my annual analysis of our client base. I do this to determine the financial and business growth strategies that our clients are using (or not using!) that can be of benefit to our firm and the rest of our clients. It’s insightful. Very insightful… and, of course, very useful.

In fact, I believe we are one of the few accounting firms that do this type of ‘audit’. Anyway, one of the strategies I’ve identified that our most successful businesses use is ‘upsell’.

Upselling is one of the easiest yet most neglected strategies to instantly add hundreds, thousands, even hundreds of thousands of pure profit to any organisation. Perhaps the best way to explain what an upsell is, is to give you a well-known upsell that McDonald’s use. Let’s say you go into McDonald’s and ask for any of their standard meals – the reply from the person serving you will be, ‘Do you want to go large?’ Basically, they are using a well-rehearsed ‘Upsell Statement’ that makes it easy for the buyer to say ‘yes’.

With just six carefully crafted words, McDonald’s generate an upsell that 30-40% of customers say ‘yes’ to. That’s another 30-40 people in every hundred that spend, say, a pound more than they would have done had the Upsell Statement not been used. And just think for a moment…

The cost to McDonald’s for providing the larger-sized meal probably adds up to about 10pence – so they’ve just created another 90 pence/cents of profit on the sale with virtually no effort (six words).

So why does the upsell work so well?

The reason why upsell works so well is that the Upsell Statement is used only after the person has made the decision to buy. That means they are comfortable with their decision. It’s at this point they are much more susceptible to the upsell because they are in ‘buying mode’.

You just need to identify the product or service that is a natural upsell from the initial product being purchased. It could be a service package, more of the same thing, or a complementary product or service. But make sure the upsell has a large profit margin built into it and you’ll be surprised how easy it is to extract more money out of your customers.