Advice From the Trenches: How to Increase Upsell Revenue
Even the 800-pound gorilla in a market has room for growth. HSN, a division of USA Interactive, is available to 143 million households worldwide and has a customer base of more than five million people. Yet according to Norman Wright, senior vice president of HSN, the company knew that it wanted to do more. "When I came to HSN we were focused on establishing our transactions and taking the orders correctly--a lot of churn and burn," Wright says.
With more than 1,500 reps, moving into upselling seemed to be the next logical step for the company. But when HSN employees first began to pitch additional sales to customers placing orders, things didn't go well, Wright says. "The first few months we had people calling to order jewelry who were being offered a great deal on snow shoes. So as we improved the system, we made sure to match items into the workflow that made sense. Customers ordering ready-to-wear clothes would be offered accessories, someone who purchased a necklace would be offered the matching earrings," he says.
Once the system was in place HSN hit its next obstacle: how to transform the 1,500 reps from order takers to salespeople. As part of that transition the company changed its hiring profile. "As we learned what did and didn't work for us, we updated the human resource department and let them know the qualities we needed in our reps," Wright says. "This let us include our upselling requirements in our training program."
Although upselling is optional, HSN has built in numerous incentive programs to encourage compliance with the program, Wright says. "In the first half of 2000 we had roughly 20 percent compliance with the program. Of that 20 percent, 17 percent earned a sizeable bonus. Now, we have about 99 percent compliance with the program and about 78 percent of those receive a bonus. Nothing motivates reps like the idea that 'Hey, I can get a few extra bucks,'" Wright says.
HSN's upsell success has earned the company more than just a few extra bucks, increasing revenues from $9 million to $70 million in the past three years.
Though 85 percent of its orders are handled via the phone, HSN is expanding its Web presence in both sales and upsells. Wright tempers that expansion with the knowledge that with only about 70 reps fully supporting the company's Web site, its function is more about customer service and productivity than sales. "We have begun to do intelligent upselling online," Wright says. "And the more we do, the more we understand what we're doing and how to improve."