When is it a Good Idea to Upsell?

It's a trick question. When was the last time you felt reciprocity with a company? And I'm not talking just about messaging, either. Are we there yet?

Because as Don Schultz says in his seminal book on Integrated Marketing Communications, “…when both the value of the of the customer to the brand and the value of the brand to the customer are high, the relationship will be strong and ongoing.”

Beth Harte said: if there were more reciprocity, upselling (or cross-selling) wouldn’t be a concern of “when is it okay?” because one could assume the trigger would be inherent in the relationship.

In a close enough relationship, someone could alert you when you need something more and you wouldn’t be offended by the suggestion.

The idea of customer reciprocity is intriguing -– is it like a friendship? One that goes much further than the definitions of online "friend" or "follower". Because real money exchanges hands. In the absence of physical rapport, digital execution matters.

Who does it well?

Reciprocity rules

Amazon's secret to online dominance is reciprocity. You can look at the data, think about how your own purchasing is affected by their masterful use of your browsing and purchase data to tailor the site for you. Customers love the attention. Think about it.

Even if you know it's based upon an algorithm, the tool is only as good as the rules written to provide search results. They show they pay attention to what people buy and make suggestions on similar books and materials. An added bonus is the "people like you" who bought this, also got that feature

Another benefit at Amazon is customer reviews.

You can dig into reviews by others, and now you can even read the comments to the reviews. Most of the times, you probably stop at the cross references from customers who bought what you are looking for, but it's nice to have the option to keep reading and discovering new material.

If the reviews weren’t there, even with negatives or neutral thrown in, you might buy something you'd end up regretting. Amazon helps customers not waste precious money.

Harte says I don’t look at it as upselling I look at it as a benefit of being associated with the brand. Because they offer reviews, I don’t mind taking a look at what they are potentially upselling.

That's the way I feel as well. So much so, that I joined their affiliate program -- one of only two I participate in. The other one being to support quality products by a friend. You see, although they are not at the same "friend" level, Amazon managed to create a nice balance of give and take -- reciprocity.

Fair/unfair in reciprocity

First developed in 1962 by John Stacey Adams, a workplace behavioral psychologist, Equity Theory attempts to explain relational satisfaction in terms of perceptions of fair/unfair distributions of resources within interpersonal relationships. [hat tip: Beth Harte]

One of the elements of influence I discuss in my talks and workshops is group behavior. You can maximize collective rewards by working with a group in developing accepted systems for apportioning rewards and costs equitably among members.

Systems of equity will evolve within groups, and members will attempt to induce other members to accept and adhere to these systems. Hence why customer service in social is not fair, and why it is not a long term solution -- people make social comparisons.

What do they see?

Upselling is invisible

Developing relationships with customers needs to be baked into your business for it to pay off at scale -- and where it matters most, profits. Just like with initiatives in social media, in that case, upselling is invisible. It's a natural outcome of having established a mutual interest based on value.

And I'm not talking about coupons. You can offer incentives, recommend other-like products, reassure customers with reviews. The best way to upsell is to develop a system of reciprocity where value is exchanged between a customer and the company.

Reciprocity is one of the levers in marketing by context building. Reciprocity anticipates a need -- the good balance to strike between the entitled quid pro quo, and the lazy status quo.

 

[Beth Harte and Anna Barcelos collaborated on this post as members of Conversation Agent customer-centric content advisory board]

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Comments

[RaynaNyc]

Great topic. I've always believed that great customer service is a way of upselling (and a smart marketing vehicle). Of course it must be authentic, and relevant, but when you have a good experience with a brand (even when in response to a bad one) it can have a lasting effect. More the reason for companies to take a more serious (and ongoing) look at all the customer touchpoints and their training to better empower them to 'upsell' customers.

[Dan Perez]

I find it rather funny how bloggers try to make the whole point of their post based on one company (usually Zappos). It's rather easy to attempt to upsell a customer online, the way amazon.com does it. From the longtime customer who loves and trusts the brand to a first-timer, they're upselling - trying to get you to buy more. You can dress it up with all the marketing-speak you want, but that's what it is.

It's become rather easy for social media marketing pros (a large percentage of which never worked a day in their lives in sales) to reintroduce concepts like "reciprocity", and to talk of "developing relationships with customers". One factor you're overlooking here is convenience. It's easier to just hop on amazon.com, look for what you need, read a few product reviews, and buy it (with free shipping on all orders over $25!). Is that reciprocity or convenience?

As a former Salesperson, Sales Manager, and Director of Sales & Marketing, I tend to frown on these rather simplistic approaches on selling. Amazon.com has a 15+ year presence online and they have been innovators as an online marketplace. But the life insurance salesperson usually only gets one attempt at the sale, same with the car salesperson, catering salesperson, etc. For them the upsell is critical to making a living. But the successful ones know that listening first, then offering solutions builds trust which leads to "earning the right" to offer additional products/services. How do they know this? Because books have been written on this going back almost a century.

If you're gonna talk about something as important as upselling, give me more than just amazon.com, that's all.

[Valeria Maltoni]

I find it interesting how bloggers try to make the whole point of their comment that they know more/do better than the author of a post without considering their body of work. You don't need to read a book to be human and kind to people, Dan. Listening and offering support are two key characteristics of smart and experienced salespeople -- both are missing in your comment.

[Valeria Maltoni]

authentic and relevant are winners in any kind of communication. I would also add appropriate to that, which requires a bit of emotional intelligence.

I like your additional thoughts on touch points and resources.

[Beth Harte]

Dan, as usual you can't see the forest through the trees in your on-going efforts to be a curmudgeon in the social space. This is about marketing and being customer-focused, not social media.

Perhaps you should have a chat with Don Schultz who has been discussing reciprocity for almost 20 years. Peter Drucker also discusses this concept. They've been around a long time...but that doesn't mean companies get it.

Like I have told you over and over the reason there aren't more examples is because most US-based companies are product-centric (like your sales comments, which are based on inside-out thinking).

There are only a handful of customer-centric (or testing the customer-centric waters): Apple, IBM, Amazon, Cisco, LaFarge, Starbucks, Lego, GE, National Instruments, Kraft, Zappos.

Becoming customer-centric is one of the hardest things a company can do. It means putting customer needs ahead of pushing products/services just to make a sales goal.

How about reading up on these concepts before setting out to bash them? Then perhaps we can have start to have an intellectual conversation.

Here's a few to get you started:

Outside Innovation by Patricia Seybold
IMC: The Next Generation by Don Schultz
The Outside-In Corporation by Barbara Bund
Reorganize for Resilience by Ranjay Gulati

Cheers,
Beth Harte

[Sahail]

Hello again.

I do think that the only reason I go for an upsell is if my experience as a customer has made me (that old fashioned concept) 'happy'.

If I like what I've bought and enjoyed being sold it, I'll be open to buying again.

This means being treated with respect all the way.

Does this make sense? I think it's been the basis of good business for decades.

Sahail

[Dan Perez]

Valeria,
Not quite sure what your point is. I don't think I stated anywhere in my comment that I knew more or was better than the author of this post (you, yes?). What I did say is that I actually was in corporate sales (for 10+ years) which I feel entitles me to speak on upselling from a more one-on-one perspective. As for your body of work, I've read your "About" page but I've become rather underwhelmed lately by the terms: thought leader, author, & speaker.

As for listening and offering support, that's exactly my point (if you read the next to last paragraph). Sorry I didn't agree 100% with your post; I thought it was a rather weak example of upselling. But don't worry, I'll probably be the only one...

[Valeria Maltoni]

I fail to understand the correlation between my experience and this statement "read your "About" page but I've become rather underwhelmed lately by the terms: thought leader, author, & speaker."

You are not entitled to anything, you must know that qualifying a need is the best way to sell.

[Valeria Maltoni]

respect used to be part of human relationships, a pity that it's now an exceptional experience.