How do you increase your profitability? The first thing that would often pop into mind is acquiring more customers or increasing your prices. But there is a more cost effective and ethical approach to this – upselling your existing customers.

Upselling is not a new concept. It’s basically a sales tactic whereby a seller persuades the customer to purchase a more expensive version of an item, upgrades, or other add-ons in an attempt to increase the dollar value of the sale.

In so many ways, this strategy is better than chasing after new business. For one, it is easier since you have already won the customer’s trust.

Another advantage is that upselling allows you to constantly interact with existing customers, which helps with branding and customer retention. Upselling, when done properly, can also be easily scaled. So it’s a sustainable strategy for your business’ growth.

An infographic from Gainsight provides a number of tips on how to make an upsell offer to your customers. But before you even get started, here are some things you need to know to plan a successful upsell strategy.

Timing is everything

True, a customer’s value is not limited to the initial transaction. But trying to upsell them when they have just signed the deal is not a good way to maximise your revenue.

Before you upsell, make sure the customer already realises how much they benefit from your business. That way they are more likely to consider an upgrade or additional product. You have helped them solve a problem once, so they are more likely to be interested to know what else you can help them with.

If applicable, take advantage of special holidays or observances when introducing your upsell to customers.

Go for a logical upsell

Make your upsell related to your original product or service. Set your focus on the customer’s lifetime value, not on the transaction value or the additional dollars you would get from the upsell. If the offer is highly relevant to your original offering, it will convert and scale better.

By now, you may already have some information about your customers’ needs and wants. If you haven’t already covered those for them, repackage your offering to better suit their needs.

Don’t overcharge

As much as you want to maximise your sales, be sensitive about your price. Unless you are sure that your customers are willing and able to pay the additional cost, don’t make your upsell too expensive. Or if it is expensive and your customers turn the upsell down, you can offer it again with payment plans to make it more attractive.

Another option is to offer a “free trial” for a limited time. If your product is truly great, customers shouldn’t have an issue paying for it in full or in instalments later.

Talk about the benefits, not the added features

Some people buy when the product seems awesome or innovative. But most people buy a product or service because it serves them a purpose or fulfils a need.

It’s easy to pepper your marketing copy with fantastic offers and awesome features, but the customer will most likely focus on how the upsell will benefit them. Will it make their life easier? Are the benefits better than what they currently get from your original product or service? Make sure the answer is yes.

Aim to generate 30% of your revenue from upselling – the rest should come from customer acquisition. This way your existing customers will be worth more in the long run, while you are continue to acquire new profitable customers.