Up-Selling and Cross-Selling is Key in many industries
When you dine out or go shopping, you may notice employees subtly coaxing you to spend more.
At a fast-food establishment, they may ask if you would like to upgrade your chicken nuggets to a combo.
If you’re shopping at a store, they may suggest a shirt to go with the jeans you’re buying.
These are examples of up-selling and cross-selling; up-selling means recommending a more expensive version of the item the customer picked, while cross-selling means recommending a complementary item that goes with the item the customer picked.
These selling methods work wonders in all types of retail, even the cannabis industry.
Up-selling and cross-selling provide cannabis dispensaries with many tangible benefits.
Profits increase between 25 percent and 95 percent
For one, they increase customer loyalty and engagement, which drives profits.
According to research completed by Frederick Reichheld of Bain & Company, profits increase between 25 percent and 95 percent while customer retention rates increase by 5 percent.
Customers can see new product options and the dispensary’s product sales and ROI will increase.
Cannabis dispensary owners need to make profits that exceed their daily labor costs, which can amount to average daily ticket prices between 60 dollars and 80 dollars per consumer.
With the right selling techniques, employees can more-than-achieve this high ticket price.
There are multiple “rules-of-thumb” that employees need to follow in order to make up-selling and cross-selling work.
For one, employees need to present relevant, budget-friendly recommendations.
They have to communicate with the customer to gather information on their budget and preferences.
They even need to remember specifics such as the “Rule of Three,” (where the employee recommends three new options) and persuasive phrasing (such as using rounding tactics to indicate that an up-sell is only 10 dollars more).
Mastering effective up-selling and cross-selling comes with time and practice.
However, it can be difficult for an employee to nail up-selling and cross-selling since the turnover rate in the cannabis industry is so high.
60 Percent of Entry-Level Employees Quit
According to a Headset study of Washington and California cannabis stores, after only two months of work, 60 percent of entry-level employees quit.
The study also shows that new employees only begin to add value to the business after 90 days on the job.
This turnover rate prevents employees from efficiently learning how to up-sell and cross-sell to customers, leading to profit loss.
Kiosk solutions simplify selling.
There is a solution to this problem though: self-ordering kiosks. Companies like Paywana offer a self-ordering kiosk that never fails to up-sell and cross-sell.
Customers can customize their order easily with this technology, increasing their total purchase amount.
A kiosk eliminates the need for employees to thoroughly offer customers to upgrade their purchases.
Ultimately, the high turnover rate that plagues the industry can be alleviatedwith these kiosks.
Up-selling and cross-selling are important to the retail industry, but they
require a lot of time for employees to master.
Self-ordering kiosks, especially in the sometimes shaky cannabis industry, can help dispensaries prosper.