The importance of Upselling and Cross Selling in medical sales (Part1)

As a marketer with a solid sales experience and strong customer focus, I must confess that I’ve been thinking for years that upselling and cross selling had a negative connotation in general, especially in the medical business.

Sharing the customer perspective, I thought these practices were unethical sales tricks where pushy sales reps tried to sell additional products or services.

Unfortunately, sometimes that is exactly what happens. However, upselling, and cross selling can bring you closer to your customers increasing customer satisfaction while bringing in more revenues and a better retention rate.  

Let’s explore this controversial and often misunderstood topic.

The role of a medical sales rep

The job of a sales rep is to understand the customer’s needs and investigate if and how additional, available products or services could benefit the customer or the prospect.

A good sales rep should be using the trust already developed by the customer to uncover needs, especially unexpressed needs, to increase sales, customer benefit, and experience. Normally the customer buys to satisfy his/her needs, not the need of the sales rep to reach the quota.

What is upselling?

Upselling is a sales strategy where the seller induces the customer to purchase more expensive products, upgrades, or other add-ons with the purpose of making more profitable sales.

Upselling normally involves marketing a more profitable, in most cases more expensive, product or service; sometimes, it is simply exposing the customer or potential customer to options not considered before.

Companies tend to combine upselling and cross-selling to maximize the profit generated by a single customer relationship. These two strategies are very useful for medical device distributors in the attempt to take advantage of their large product portfolio.

A typical example of the upselling technique that at least everyone has experienced once is when ordering a combo in a fast-food chain the cashier asks the question: “would you like to upsize that?”

In this context, the practice is accepted, and the customer is normally not annoyed by this practice. In our business the situation is different, and the company must ensure that the relationship with the customer is not damaged by the attempted upsell. Often due to poor sales techniques, the customer perception of the tried upselling is negative and can have an impact on the sale.

Why is upselling important?

According to Harvard Business Review, depending on the industry acquiring a new customer is between 5 to 25 times more expensive than keeping a current one. I don’t know what the level is in the Medical business but intuitively, we all know that selling to a new customer implies the investment of more resources than selling to an already established customer.

Upselling to an acquired customer with a solid customer seller rapport means that the customer is more likely to share his/her problems and listen to your suggestions. Upselling, if correctly managed by the sales rep, can lead to loyal customers, repeated sales, increased profit, and better customer satisfaction. The upsell must be beneficial to both sides of the relationship realizing a win-win situation.

The difference between upselling and cross selling

Upselling is the practice to explore the customer’s needs and accordingly try to persuade the customer to purchase a higher-end product or service, an upgrade, or an additional item with the purpose of making the sale more profitable. A typical situation in our business is a sales rep selling 3 levels of service of a capital equipment medical device suggesting the higher level which include more services but cost more than the lower levels.

Cross selling instead is a sales technique where the sales rep will suggest the customer purchase another product related to the one already purchased by the customer. For instance, if your customer is already buying surgical gloves, the sales reps may persuade the customer to also buy gowns and caps.

Frequently the two techniques are used in combination in order to increase the revenue and provide better customer service and satisfaction.

Conclusion

I hope thanks to this first post about upselling and cross selling you will know better these two controversial sales techniques.

In my next post, I will share practical advice on how to effectively upsell and cross sell and show that these practices can be honest and valuable in growing your business.

Stay tuned and subscribe to avoid missing the second part.