On a recent business trip to speak at an Ohio HVAC association meeting, I drove west through Pennsylvania via the Pennsylvania Turnpike. I departed my home early in the morning, at about 4:30 a.m., in hopes of making it to Akron, Ohio by noon. During my first rest stop, I decided to buy a fresh cup of coffee. The woman who worked the food counter had a great sense of energy and enthusiasm – she was obviously a morning person. She greeted customers with a smile and a pleasant invitation, “How may I help you?” The pervasive aroma of brewing coffee, fresh-baked pastries, sizzling bacon and fried eggs filled the room and created an appetizing ambiance.
When it was my turn, I ordered my coffee and pulled a five-dollar bill out of my wallet, and as I handed over the money to the woman, she asked, “Would you like a breakfast sandwich - they’re fresh?” So there I stood cash in hand, in the presence of an upbeat person who invited me to taste the food which filled the room with its enticing aroma. A positive response added $2.50 to my total. After she handed me the coffee and breakfast sandwich, along with a nice “thank you,” I stepped to the side to add a little milk to my coffee. I overheard the next transaction in which a customer ordered a cup of coffee, and sure enough, this woman made the same suggestion, which resulted in another breakfast sandwich sale. This added another $2.50 to her cash register. Being curious, I waited in the lobby, ate my breakfast sandwich and watched this counter person serve more customers. She sold an additional four breakfast sandwiches in about five minutes. This woman’s sense of timing was outstanding. She waited until a customer’s wallet or purse was out, with cash in hand, and then she asked her upselling question along with the value proposition, “They’re fresh.” Wow, I thought - that’s an additional $10 every five minutes, which could translate into $120 an hour. As I walked back to my car, I remarked to myself that this woman understood how to upsell.
For many supply house professionals, upselling is one of the least understood business behaviors. But not understanding its importance can have a dramatic impact on revenue and profitability. So if upselling is such a great business practice, why don’t more distributors do it? Perhaps the answer lies in the fact that upselling is a behavior that needs training - this requires scripted upselling suggestions to customers and a stable infrastructure and good organization to maximize the upselling possibilities. Last but not least, learning how to maximize your “halo effect” gives you another distinct advantage.
What is the halo effect? The answer lies in this tried and true maxim: People buy from people they like. A halo effect, according to social scientists, is what happens when one positive characteristic about a person dominates the way others view that person. In the same way the woman at the rest stop leveraged her positive energy as a halo effect, supply house professionals can do likewise. Therefore, upselling tactics must preserve the positive momentum established when a customer is ready to buy.
If we were to define exactly what upselling is, the definition would be: Upselling is offering a suggestion to an already receptive buyer to enhance the value of his or her purchase. Upselling does not include aggressive selling tactics. The purpose of upselling is to build a mutual benefit so that both you and the customer win. Upselling assumes that you have already made the sale - now don’t lose it. There exists in upselling the opportunity to lose a sale if a salesperson becomes too aggressive, upsets the buyer or does something else to break the continuity of the customer’s buying experience. Therefore, it is vital that supply house professionals understand the true nature of what upselling is.
Distributors who suggest an electrical whip, disconnect or line set each time a contractor orders a three-ton condensing unit supersize their orders. These numbers add up to significant revenue.
As demonstrated by the woman at the rest stop, timing is an important element in upselling. Wait until the customer’s wallet is out, their guard is down, and the business rapport is high. This means waiting until the customer has already agreed to buy something.
A person who has the most time sensitive pressure does worse in a sales or negotiating scenario – the same thing applies to upselling. In upselling, timing is almost everything.
The role of management in an upselling initiative is more important than what happens on the front line. Management’s job is to establish training and organization for upselling success. In the absence of training and organization, upselling behaviors will be sporadic and inconsistent, thereby squandering potential revenue and profits. At best, management should expect an upselling success rate of 10 to 25 percent when suggesting pairings of products and services to customers. But you can only achieve this success rate if you remember to make the upselling suggestion 100 percent of the time. To achieve this, employees require an infrastructure which both reminds front-line employees and suggests the natural product pairings.
Calm, courteous and friendly upselling works best, and these behaviors are also halo effects. Since selling involves emotions, ask customers how they feel, not what they think, about adding suggested items to their order. Active verbs such as "gain" "improve" and "save," along with words that express benefits, such as "new," "healthy," and "proven," are likely to appeal to the customer's emotions.
The best strategy for customer service enhancement includes a companywide back-to-basics approach. Company owners and managers should dig deep and lead by example to ensure that their subordinates witness the correct world-class behaviors among those in charge.
A strong focus on monitoring first impressions from the customer’s perspective will help ensure that service calls begin the right way. The best first impression begins with a smile. Whether in person or over the phone, a smile is more inviting than a frown. Customers are also much more likely to keep returning due to positive attitudes among your employees.
For example, the natural product pairings for replacing a defective compressor would include a service maintenance agreement, an air cleaner or a humidifier. These natural pairings achieve two goals:
- Greater customer benefits;
- Improved revenue potential.
When we consider that selling is something we do “for” someone rather than something we do “to” someone, being able to fluently explain the customer benefits is essential. Conveying the benefits of improved indoor air quality, greater comfort and long-term system care can be attractive to customers if the timing and circumstances are right.
The tactical upselling behaviors described in this article works best when you reinforce them with a strategy initiative which helps employees to be successful. This is the ultimate win-win outcome that a business strives for.
Steve Coscia, president of Coscia Communications, which assists HVACR companies in achieving world-class service status. He is the author of the HVAC Customer Service Handbook. A best-selling author, consultant and 20-year customer service practitioner, Steve presents keynote speeches and facilitates HVACR customer service workshops. Contact Steve at [email protected], 610/853-9836, or visit www.HVACcustomerservice.com