Upselling on the Phone

The underlying philosophy of Omaha Steaks’ successsful telemarketing operation is: “I don’t have the right to determine when you’re done buying.” And that’s a good way to look at upselling on the phone. Instead of thinking of it as pushing extra product at your customers, present it as a customer service, suggests Ron Bruggeman, director of sales at Omaha Steaks International, a cataloger and direct marketer that operates its own call center.

For inbound telemarketing operations, Bruggeman says that means almost every caller is a prospect. He explains, “It makes sense: You have a captive audience of people who called you. They’re in the mood to buy.”

Telemarketing consultant Liz Kislik agrees—when it comes to generalized consumer merchandise like apparel or food. But, she adds, there are times when you have to be more selective about who to upsell. “More matching is required for high-end or business-to-business telesales,” notes Kislik, who operates Liz Kislik Associates in Valley Stream, NY.

Bruggeman says he considers upsell/cross-sell offers similar to having impulse items at the grocery-store checkout aisle. Here’s an example of how a conversation might go with an Omaha Steaks buyer, Bruggeman says: “If the customer orders six steaks, we try to upsell him to 12. If that’s OK, then we say why not cross-sell six burgers. If the customer says OK to that, again, say why not up it to 12 burgers?”

The sale keeps going until the customer indicates he’s done buying, Bruggeman notes, adding this is where TSR listening skills come into play. “When the rep gets the message that the buyer is done buying, then it’s time to end the call—not before.”

Reps Need the Right Mindset

According to Kislik, telephone reps need to understand that it’s part of their job to make these upsell or cross-sell offers. The problem, Kislik says, is that most inbound reps don’t believe their job is to sell anything. So in terms of training, the upsell/cross-sell aspect of the job should be presented as part of being “helpful and giving service to the customer.” Kislik says it’s important to stress to the TSR that the choice to buy is up to the customer.

Bruggeman notes that TSRs who are expected to make upsell/cross-sell offers need product training. “They need to know the whole product line and which items are appropriate for upsell/cross-sell in particular situations—we call them add-ons.”

Also important for successful execution, says Bruggeman, is to train reps in what he calls a “positive assumptive close.” He explains, “Phrase the question so it assumes a positive response, as in ‘I’m sure you’d enjoy some of our cheesecake with those steaks.’”

What to Pay

Compensation for upselling and cross-selling presents a dilemma: Do you reward reps for making add-on sales or not?

Both Kislik and Bruggeman believe it’s dangerous to tie upsell goals directly to monetary rewards and that it’s better instead to pay a slightly higher hourly wage.

The most important consideration, says Bruggeman, is that “rewards shouldn’t tempt reps to rush the sale.” In other words, reps must be take their time and be clear about what the customer is agreeing to on the upsell. “Never be unclear just to make the sale and end the call,” Bruggeman warns. He suggests it’s a good practice to have agents recap what the customer is agreeing to buy—restating exactly what the customer ordered and will pay.

Software and Systems Issues

There is a variety of telemarketing software that can be helpful in providing telephone reps with cross-sell/upsell suggestions on pop-up screens. These suggestions can even be based on each individual customer’s purchase history, as well as other factors such as what overstock inventory the company wants to move.

But, Bruggeman notes that even without this kind of technology, it’s still possible to craft an upsell program out of simple logic: Use a strategy to “double up for savings” or to try to sell a complementary product, such as suggesting a belt to match a pair of pants or shoes.

Know When to Back Off

Of course, there are times when it’s not a good idea to try to cross-sell or upsell a customer. This is when it’s imperative that telephone reps have the ability to flag a negative option to bypass the upsell on the software and go right to the close. “It’s important for reps to have some discretion over when to present the upsell or cross-sell offer. It is ineffective if reps feel forced into making an offer when they feel it is inappropriate,” Kislik stresses.

Kislik notes three specific instances when it may be best to back off:

• If the customer is angry or frustrated, for instance about a bad back-order situation.

• if the customer is extremely specific about budget (although Kislik notes that’s not a hard-and-fast rule since we all splurge sometimes if we really want an item).

• if the customer is very distracted, for example if you can tell he’s calling from work or from home and has a baby screaming in the background.

When to Use Outbound

Omaha Steaks extends its cross-selling program to outbound telemarketing, through which it uses the phone (and now e-mail too) to go back to its customers again and again to try to get the add-on or repeat sale.

For Bruggeman, that means everyone in the housefile is a candidate for an outbound telemarketing sale.

Kislik suggests a more targeted approach may be wiser. “Look at what the customer has bought in the past so that you are sure the offer makes sense,” she says. Also, Kislik notes never to call customers who have said they don’t want to be contacted that way.

A nice way to make an outbound upsell offer is with a service slant, Kislik offers. Call customers the day after they place orders and say to each, “We’re in the process of shipping your order out and wanted to see if you’d be interested in this special offer.” You can make it especially appealing if you no additional shipping and handling charges will be added!

Another Twist on Cross-Selling

Say it doesn’t make sense for you to cross-sell your own products on the phone. You can still use this point of contact as an opportunity to make some extra money by introducing your customers to someone else’s product or service while you have them on the line.

Companies, such as Triad Discount Buying Service and MemberWorks, create programs (think travel or shopping clubs) that catalogers and other direct marketers can market to their customers.

Here’s how MemberWorks, with more than 4 million members, operates: A customer calls a catalog, places an order and gives her credit card number. Near the end of the call, the TSR says, “We have a special offer today” and launches into a 30-second script describing the benefits of one of the clubs.

David Shackney, senior vice president/new business development for the 10-year-old company, explains, “The offer is generally a 30-day free trial billed to the credit card. We already know they have a credit card since they were ordering by phone.”

With catalog customers, the acceptance rate is 15 percent to 35 percent, depending on how targeted the club is to the audience. Shackney notes that the best response is when the club is closely related to that catalog’s buyers—for instance, when an apparel catalog promotes a beauty and fashion club.

MemberWorks can also brand the club with the catalog’s name so it can be positioned as their service or as a loyalty program offered by that company.

TSR training is provided by a MemberWorks’ account team. “We want to make sure the telephone reps understand the program, so we even give them a free membership so they can see how it works,” Shackney notes.

For more information on MemberWorks, call (203) 324-7635. To learn about Triad Discount Buying Service, call (561) 362-6715.