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Definition: Upselling

Upselling is a sales strategy in which a seller influences the customer to buy an upgrade of the same product or suggest an another product which is supposedly better (and expensive) than the one asked for by the customer. Upselling is used in order to make a larger sale and to earn greater profits. It is common practice in many industries. The sales person often tries to sell different versions of the product, starting from the base model, but with each version the quality and features of the product change. We can see this trend in the automobile industry in which a car starts with a base but the sales team tries to influence customer to buy top end model. The sales team in this case is trying to Upsell.

Importance Of Upselling

Upsell ensures the following things :

1. The salesperson is able to get more sales and the customer gets a better product

2. The companies get motivated to always produce better and updgraded products

3. The revenue and profit increase from the same level of customer demand

Example of Upselling

Let us assume you want to buy a mobile phone and you go to a shop. You tell your needs to the sales person and on the basis of models shown you select one model you like. Let us call it Phone Model 1. Now the Upsell comes into picture if the sales person tries to influence you to buy Phone Model 1+ or Phone Model 2. Both these models are better in terms of features and functionality than Phone Model 1 but obviously both are costlier too. In case you end up buying Phone Model 1+ or Model 2, the sales person successfully did an Upsell.

Upsell vs Cross Sell

Upselling is often confused with cross selling. Upsell and Cross sell are similar but in theory they are totally different. Both the techniques try to gain more sales by selling something more to the customer but there is clear difference between cross sell and upsell. In cross sell, the sales person sells additional products to customer on top of the one customer wanted or bought but in upsell, the salesperson sells the upgrade or a better and costlier product to the customer. In the example above, if a sales person sells you the case and internet pack on buying Phone Model 1, this is cross sell but if you buy Phone Model 2 instead of Model 1 it is an Upsell.

Hence, this concludes the definition of Upselling along with its overview.


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