It’s a question retailers are constantly grappling with: How do I go about making more money? While new products are often the perceived answer to that question, moving the product that’s currently on the shelves or in a humidor is a bigger problem tobacconists must address. That’s where upselling comes into play.
Upselling is a sales technique in which a seller convinces a customer to purchase additional or more profitable items. This sales technique seems far easier than it really is. First, retailers must offer their customers more of what they already want—convincing the customer that he or she wants more of any given product is the real challenge.
“By upselling, you provide the customer with more value and pleasure from the products they purchase from you,” explains Jorge Armenteros, founder of Tobacconist University. “If a customer seeks relaxation from a cigar, two cigars will provide them with twice as much! For a retail tobacconist, upselling can be the difference between success and failure. Competing with the internet, mail order and discount warehouses is extremely difficult, but an additional $50 a day in upsells will yield an extra $18,000 a year—and this pays a lot of bills!”
Tobacconist University, an education-driven certification program designed to bring professionalism to the tobacconist profession, teaches that upselling is defined by the customer’s needs and wants. Is the customer focused on quantity? Is he or she a big spender or more value driven? Do they prefer new releases, rare products, aged cigars or are they solely focused on price? Every customer’s preference is different, calling for a completely tailored sales approach. In order to upsell, you must first understand your customer.
Tobacco Business: How can tobacconists formulate a sales strategy that fits their store and its customers?
Jorge Armenteros: Every tobacconist is different and will have a different approach to selling. Some are more shy while others enjoy selling and driving up their average sales. A shy tobacconist should focus on educating their customer on new and other products by asking, “Do you need a cutter or humidification pouch with that?” A sales-driven tobacconist can pursue the “you have to try this” or “don’t miss out on this” or “you need this” approach.
While the sales techniques and culture will vary with retail tobacconists, we all have a similar pool of resources to upsell, which includes lighters, cutters, humidification packs, additional cigars and other accessories. Retail tobacconist upselling can occur in the humidor as well as at the point of sale (POS). Upselling big items like lighters, cases, humidors and other cigars is great, but POS items can add up to big business over the course of the year. These items are our last opportunity to add value to the customer’s retail experience. Yes, that’s correct, upselling adds value! In a luxury business like ours, there is no post-purchase remorse for having purchased more luxury. Tobacconists are selling pleasure, relaxation and taste, and our customers always want more of those things.
Are there any verbal or physical cues tobacconists should look for in customers to determine whether the customer may be open to an upsell?
Everyone is open to an upsell. Look at their eyes and where they put their attention. If they look at something for a second longer than another, then teach them something about that product. If they touch something, tell them how great that is or how much your previous customer loved it. If they mention a brand or line extension, continue the conversation by giving them more info about that or related products. Some of our biggest sales come from customers who came in for a single cigar or small purchase, so never assume anything!
When should a tobacconist not try to upsell someone?
I once saw a man escorted to the x-ray machine at the security line at the airport. He was an emotional mess and seemed to be crying. It was a heartbreaking sight, and I knew something terrible must have happened to him, and I was happy that he was being helped through security and placed ahead of the line. I have never forgotten that moment because terrible things are happening to people all the time, and it is important to keep that in mind when dealing with customers.
Sometimes our customers are mean or rude, and we must be able to separate our emotions from the moment. On many occasions, I have had customers come back after they have been less than pleasant and apologize to me. They have let me know that something sad or tragic happened to them on the bad day, and I have been proud to have controlled my own emotions.
This is a long answer for a short question with a tangential lesson: I would say that unless something terrible is in the air, we should always be trying to upsell. Upselling is good, not bad. Upselling is not an attempt to separate a customer from their hard-earned money but rather a way to add value and provide more pleasure to their lives.
How can store owners encourage upselling among their store’s staff members?
I like to listen and reward those employees who make the effort. I use words of affirmation, cigars or money to reward proactive employees because I am truly appreciative of their effort. Also, creating a bonus system at certain sales targets can be very lucrative. This means you can give your employees bonuses for every sale bigger than a specific dollar amount or give a bonus when a certain goal is met, such as selling out a basket of guillotine cutters or the last of a brand your store will not be reordering. Setting goals with time limits and financial rewards is imperative.