The simplest and most effective way to upsell customers is by establishing a relationship. When people make decisions, they usually do so after consulting friends and family. There are numerous psychological and evolutionary reasons that I don’t have the time to get into with this post, but let’s look at a few anecdotal examples. When people choose a college to apply to, it’s usually done with the input of family, intimate friends and a guidance counselor. When a woman at a bar is approached by a man, within a few minutes she’ll instinctively signal for her friend’s approval with her body language. If her friends don’t approve, they’ll give “the raised eyebrow look” or simply turn their back to the man and give him negative body language. Our need to ask for approval and consultation when making choices is done both consciously and subconsciously. The decisions we make are naturally biased to include the opinions of our peer group.

So if you really want to grow your business, if you want word-of-mouth buzz, increased conversions and customer loyalty, you need to work on developing more than just a customer/client relationship. To do so entails changing the way we think about our clients.

To change our relationship with our clients, we have to stop thinking about them as potential leads. Instead, we should think about how we can best benefit them without the need to get paid back. If the focus is on getting fair compensation for value that we give, then inherently the value of the transaction is degraded. If instead the focus is on giving as much to our clients as we can, they’ll then in turn value the relationship with us that much more.

They’re are numerous ways to give value to our clients, but the best way to do so is for FREE. What? Don’t people devalue things that are free? Not necessarily. If what we give away is of little value, for example a corporate sponsored water bottle at a marathon, then we associate little to no value with the transaction or the other party. If however, we give something meaningful, something above and beyond what people normally associate with “free”, then we’ll get a whole lot of customer loyalty. People will talk about how they got a “great deal” or know “this guy” that gives them special treatment.

Have you ever read Alice Schroeder’s “The Snowball: Warren Buffett and the Business of Life?” It’s a fantastic biography and I highly recommend it. There’s one passage in the book that I found quite salient to this topic. Every year, the little known investment bank (at least for non-financial people) Allen & Co. hosts a media conference at Sun Valley. The most highly regarded media and tech CEO’s, the Steve Jobs, Bill Gates, and Warren Buffetts of the world always attend. They might shun media conferences from bigger and more well known investment banks like J.P Morgan, but they almost always go to Allen & Co. The two main reasons they go is because a.) everybody who’s a bigwig goes and b.) the deeply personal relationship that Herb Allen’s, the CEO of Allen & Co., has built with them.

How can one guy build a relationship with the top industry leaders, including diehart competitors, across numerous sectors? Free surf n turf, babysitters and exclusive schwag like Allen & Co. Golf Polos. Most of that stuff costs Allen & Co. pennys. But the effect is powerful. The kids of the CEO’s always want to come back every year. And Warren Buffett, one of the richest men on earth, admitted that he relishes putting on the Allen & Co. polos.

So make a list of what you can give to your customers right now, that would cost them nothing to receive. Make it big. A couple of helpful hints on your blog, or a free newsletter is just the tip of the iceberg. Do you have a book, a video or some other form of content that you can give away for free? How about a sample version of something you’re selling? If your business is offline, make sure to include hand written thank you note. Sooner or later, you’ll repeat the rewards. It may not be in the form of direct income. It may be through word or mouth or new relationships which are often more valuable than money.

“That is the way we are made; we don’t reason, where we feel; we just feel.” – Mark Twain

Increasing conversion is one of the most mythical aspects of Internet marketing. Most entrepreneurs subconsciously have a vague notion about the idea of conversion. They say to themselves, “If I add ‘testimonials’ to my webpage, I think more visitors will actually buy my product.” Ah ha, that’s the secret sauce! They then go about writing customer copy. In a few weeks, they might have more a few more sales. But is that due to the new testimonials? What if the testimonials were placed before the checkout button rather than at the top of the page, would that increase conversion? Do I have to create A/B multivariate tests before I can actually record any results?

Isn’t there a simple solution, like one quick fix I can implement so my conversion rate goes from 1% to 2%?

Yes, but first you must WHY people are buying from you in the first place.

Here’s a formula I’ve created from my experience and through reading about other Internet marketers.

Conversion Rate = Perceived Value Of Offer – Anxiety & Friction

The perceived value of your offer or product is composed of numerous factors, and price is only one of them. For example, are your trying to solve a huge problem this person has or are you selling a subscription to Netflix? If I was going bald and you had a product that MATCHED my desire to stop going bald, that’s a lot more valuable to me than a discounted Netflix subscription.

The Perceived Value of an Offer

The perceived value of your offer is also determined by any incentives you might have. I had a promotion where long term customers would get 10% off their order. I then extended this “limited time” promotion to first time customers if they used a coupon code. By doing so, people thought they were “getting a deal.” The increase in sales more than compensated for the 10% loss in my gross margin. This is the reasons retail stores have “sales” every 5 days. It creates the perception of additional value.

Price is also factor, but not in the way you think it is. In a perfect market, conversion will go down if the price for an offer goes up. However people are not perfect animals. Let’s take an extreme example to illustrate my point. If you were going to have laser eye correction surgery, and the market price was $2,000, but one doctor was charging $300 would you want him to do the procedure? Doesn’t a red flag instantly go off? Don’t you feel more anxiety about the $3,00 doctor? After all, you may go blind, and for most people, vision is > $1,700 in savings.

There are many most instances where the customer WANTS TO PAY MORE. If you charge them less, conversion will go down. Most of the time, people don’t value something that’s free or cheap. Have you tested your offer to see if you can make more money BY RAISING PRICES? Now that’s leaving money on the table.

And most importantly, if you can CLEARLY COMMUNICATE your value, (clarity trumps persuasion in sales), then you can significantly increase your conversion rate.

Anxiety & Friction – Why Sales get Abandoned Like Redheads

I learned a quick lesson my first day as a salesman at Sears. I was selling vacuums and closing in on a deal. Now Sears doesn’t make much in the sales of a product, but they make a ton of money through “Extended Service Warranties.” Salesmen at Sears were evaluated not only on their revenue, but how many of these extended warranties they could sell.

As I was ringing up a customer, I went into my pitch about why he should buy a $30 warranty for a $300 vacuum. He stopped me midway through my reheard lines and proceeded to grill me on the manufacturer’s warranty. When I told him about the inadequacies of the standard warranty, that it was for only 30 days and that he’d have to bring it state lines to get it fixed, he turned around and walked away without hesitation, taking my commission with him. I had made the sin of creating too much anxiety without relieving it immediately. Suddenly he was overwhelmed with the notion that he was not getting the perceived deal he wanted.

In Internet Marketing, most sites have huge problems with both Anxiety and Friction. Unless you’re Amazon.com, most customers will be VERY weary about giving you their information. Identity theft is currently a $[xx] billion dollar problem. If you’re not a well-known brand, expect to lose numerous sales on the screen where people have to pull out their credit cards.

A very EASY solution to decreasing anxiety is to have the “We are Hackerproof, SSL Secured, VISA secured, MacAfee Secured, Nuclear Fallout Secured” logos right next to the submit credit card button. Placement is important. You want to alleviate anxiety the moment it occurs, not before and not after.

Friction on the other hand, has to do with the flow of your webpage and is harder to solve because it requires extensive testing. Every website I’ve seen has numerous problems.

For example, is your checkout page one daunting long form or is it split into 3 pages so that customers feel like are making progress? Do customers have to register a new account or can they make the sale as a “guest?” Is your page easy to navigate or is it too cluttered? Does your offer suffer from the “paradox of choice,” leading to confusion and inactivity by the customer? Are there opportunities for the user to click out of your website via irrelevant links to other pages during the sales process? Have you even asked yourself any of these questions?

If not, then start doing so. More than [xx]% of all sales are abandoned in the cart, meaning customers are ready to buy but hit “X” or the dreaded back button on their browser.

After reading all of this you should realize that there is a lot more to jacking up conversions that “just one thing.” But implementing most of my suggestions should take you 45 minutes and lead to massively increased conversions.