We hear the terms Cross Selling and Upselling all the time. Both of them are essential for businesses. Let us explore the two concepts and their importance.
Cross Selling is the art of selling an additional product or service to an existing customer by convincing them of the value it will bring to the item they already purchased.
Upselling is a sales technique businesses use to persuade customers to purchase more expensive items than what the customer initially wants.
Every business that wants to grow with time has to use the techniques of Cross Selling and Upselling. Here are the top reasons for adopting these practices:
The definitions mentioned above and reasons for Cross Selling and Upselling may make them sound similar. However, the key differences between Cross Selling and Upselling are as follows:
Cross Selling |
Upselling |
Suggesting an additional product or service related to what the customer wanted. |
Suggesting a costlier and superior product or service, such as a better version of what the customer wanted. |
Initially, the customer has no intention of buying these additional items. The customer purchases them after a reasonable suggestion is made. |
The customer is already looking to buy this product. The seller only appeals to the customer's intention of getting the best of that item. |
Let's look at some examples to understand Cross Selling and Upselling better. These examples will resonate with anyone in today's world.
Scenario |
Cross Selling |
Upselling |
A customer adds a Smartphone to their eCommerce cart. |
Suggesting buying a screen guard, back cover, or earphones. |
Offers a phone with better battery life, better camera resolution, and much better features overall. |
A customer is ordering crispy fried chicken wings. |
Suggesting buying two different sauces to compliment the \taste of the chicken wings. |
Suggest buying a mixed bucket that will contain not only crispy fried chicken wings but also chicken popcorns, strips, nuggets, and three kinds of sauces. |
In today's fast-paced economy, it is a vital business strategy for eCommerce businesses to anticipate their customer's wants and needs.
Here's why the Cross Selling and Upselling sales techniques are essential for eCommerce businesses:
Studies show that retaining customers costs much less than acquiring new ones. Upselling introduces the customers to various options based on the customer's purchase patterns. Cross Selling aims at suggesting additional products to the customers, which may help the customers meet their needs better.
If the customer's requirements are addressed through Cross Selling and Upselling, they will keep coming back to your eCommerce store for all their needs. Also, these satisfied customers will begin recommending your platform to other potential customers. You can start Cross Selling and Upselling to these new customers and thrust your revenue upward.
Your revenue increases when you practice Cross Selling and Upselling through your eCommerce platform. It, in turn, brings up your store's average order value. Meanwhile, your margins keep getting bigger as you cut down drastically on the cost of acquiring new customers.
After implementing these practices exhaustively, when you evaluate your ROI, you realise that the Lifetime Value of your store has increased exponentially.
Cross Selling and Upselling require understanding what the customer may want to fulfil their desires. You can make a general sale only if you are observant. However, for Cross Selling and Upselling, you need to understand the customer even after they have made up their mind about what to purchase.
Here are some tips for effective Cross Selling and Upselling:
Analyse all the information you have on the customer. Use it to identify their goals and challenges. They could have willingly shared their residential location, work details, purchase patterns, family members, etc. You will have a successful Cross-Sell or Upsell when you suggest they get an additional or an upgraded item to attain their goals better.
Cross Selling and Upselling are not just about suggesting the right products or services. Often, it is also about doing it at the right time. You will need to follow your customer along their journey towards achieving growth. When the customer feels grateful for your products, you can suggest additional products and services.
A grateful client will value your suggestions, and the chances of them buying what you recommend will be high.
Simply suggesting products and services to existing clients does not cut it for Cross Selling and Upselling. You must identify your customers' collective problems and take a hard look at your stock.
Be the one that offers solutions, not just products. If you can connect the solutions to relevant products and services, you will become a master at Cross Selling and Upselling.
You can conduct Cross Selling and Upselling like a pro only if you actively listen to the customers. Not just their pain points but also their goals of growth and expansion. Offer them the help they need to achieve their goals via additional or upgraded products and services.
Too many choices toy with the customer's brain. When trying to Upsell, do not offer a variety of better options than what the customer initially wanted. Instead, give them two options, or even just one! Offering an array of options reduces the chance of an Upsell drastically.
The more decisions a customer makes while purchasing, the more complex the buying process becomes. Find ways to remove unnecessary decision-making steps for Cross Selling products or services.
Offer bundles of relevant products. It eliminates the customer's need to decide to buy each item separately. It increases the chances of an effective Cross Selling.
If you ask someone to choose one option from the following three cases, which do you think the majority will choose?
Case 1: You get Smartphone X without any accessories for Rs. 10000
Case 2: You get Smartphone X with a charger for Rs. 12000
Case 3: You get Smartphone X with a charger, earphones, screen protector, and back cover for Rs. 12000
According to a study by MIT Professor Dan Ariely, the above-mentioned Case 2 is a dummy choice. It is called the Decoy Effect. Anyone who wants a charger with their Smartphone will opt for Case 3 and want to get more out of their twelve grand.
Thus, similarly, place your offers to your customers for Cross Selling and Upselling products or services.
Cross Selling and Upselling should serve the customer's needs and help them achieve their goals. So, instead of making the sale, you must try to help the customer. Offer relevant solutions to customers in the form of products and services that make sense to them.
Many eCommerce platforms provide just the bill and the product after the customer makes their payment. They miss out on a critical opportunity to Cross-Sell other related products to them.
Use the post-purchase period to offer discounts on subsequent purchases and other products that may help the customers achieve their goals. Offer extra incentives for buying from you like loyalty points and gifts.
Cross Selling and Upselling relevant products and services generate more revenue while offering a more significant customer experience. Here are a few ways to successfully implement these practices:
Imagine how irritating it is when you walk into a store to purchase something and someone comes to you and tries to sell something completely random. Instead, if the salesperson talks with you and learns about your challenges, they can suggest a solution which leads to a sale.
Every company with growing sales figures has one secret - they are not trying to sell. They are looking for opportunities to educate their customers about how to realise their goals better. These companies inform their clients about the options available to make their lives easier.
Try to provide long-term value to your customers instead of trying to make more money. A loyal customer will generate more lifetime value for your business than a quick sale. Do not forget that it's a long game. At this point, everyone knows that returning customers generate the most revenue for businesses. Still, you will find enterprises pushing for immediate sales and driving away customers.
It is a good idea to have frequent training sessions to reinforce the practice of Cross Selling and Upselling in your salesforce. These techniques benefit both your business and your customers in an interconnected way as follows:
Practice |
For Customers |
For Your Business |
Cross Selling and Upselling |
They get good suggestions based on their needs. It helps them get a solution to their problems. Helps them achieve their goals effectively. |
Gain loyal, trusting, returning customers who increase your lifetime value and revenue. |
There are several advantages of Cross Selling and Upselling for businesses. Let's take a look at a few key ones:
Nothing is more important for customers than personalised experiences in today's day and age. Customers incline toward brands that can offer them products and services that they might want. So, businesses must analyse customer data constantly.
Even when it is impossible to deploy an actual person to suggest solutions to customers, businesses nowadays use automated Chatbots to interact with customers in real-time. You can feed all customer data to your chatbot and make it polite and sensitive to customer requirements.
An automated system that assists customers is a great way of retaining customers, Cross Selling and Upselling products and services.
Customers love a well-designed Cross-Sell or Upsell because it helps them realise their goals better or derive more value from an upgraded product or service. On the other hand, your sales, revenue, and profits will go way up. You will see overall growth with effective Cross Selling and Upselling strategy.
There is no denying that a business' maximum revenue comes from the repeat business of existing customers.
So, it is necessary to invest in customising offers and loyalty incentives for their specific needs. Also, personalised communication suggesting familiar products (Cross-Sell) or offering to add more value to existing products (Upsell) is a great way to maintain customer engagement.
Effective Cross Selling and Upselling take more than just a good sales pitch. You cannot retain customers by providing part of a solution. Offer a complete package that will sort out all their problems with that aspect of their life.
For example, if you are selling flavoured tea leaves, keep teacups and saucers as well. Throw in some kettles, coasters, strainers, and spoons in the mix to offer a complete package.
Every business needs loyal customers that trust you and spread the word about your operation. Give your customers a clear scope to trust you.
For instance, you set up a tasting station from the previous example in the same tea leaves shop. Customers can sample different flavours of freshly made tea and decide which they want to take home. Keep records of which customers prefer which tea, and offer them a refill via messaging at a lower price. You can even recommend a more robust version of their preferred tea during their next purchase (Upsell). Or, you can suggest they take a classic kettle and strainer to get a fully immersive tea experience (Cross-Sell).
Your Cross Selling and Upselling technique should make the customer's decision-making process more straightforward. Having to buy another related product or an upgraded product should not feel like a burden. Instead, it should make the customer happy that you suggested the perfect solution.
You can be the best at Cross Selling and Upselling only if you make the customer's buying journey smoother. One of the most popular ways to do this is by creating bundles that cater to every customer's needs.
Examples of a bundle: If a customer is looking for a baking pan for cakes, suggest they also buy a spatula, an oil brush, cupcake moulds, oven mitts, and a weighing scale for ingredients.
Example of Upsell that provides convenience: Tell the same customers from the previous example about a baking pan that is better at baking cakes evenly and is scratch resistant.
It will enhance the customer experience, build trust, confidence in you, and a long-lasting rapport.
There are so many ways of Upselling in practice all around you. However, to increase your average order value, you may want to consider the following tips:
Upgrading Versions
You can suggest customers take a different version of the product or service they want. Tell them about how it can provide better value for them. Sell it with conviction.
Protecting Products
It is a pretty standard and effective practice to recommend preventive measures to customers for their products. Offering them extended warranties, insurance, or service for an additional price.
Personalisation
Several businesses let you personalise or customise what you want to purchase. That is an effective upsell strategy because the customers agree to pay a little extra whenever they add on a personalisation.
Service Period Extension
A simple upsell strategy is at play for businesses requiring customers to renew their services. These businesses offer discounts for early renewals and better deals for longer commitments.
Bundling
You can efficiently increase your average order value by bundling relevant products and offering complete solutions to your customers.
Upselling becomes effective the same way advertisements do. You always need to bring the Upsell to the attention of the customer. The more the customer comes across the upgrading option, the more are the chances of them going for it eventually. Keep offering the Upsell throughout the year.
The fault many businesses make is that they become pushy with their Upsell. It should be a gentle suggestion with the added benefits and notifying the customer what more they could achieve with the upgrade. Becoming too persuasive is a turn off for everyone.
Don't simply try to Upsell any product or service that will get you the most revenue or commission as a salesperson. Try to Upsell only those products that make sense for the customer to upgrade.
Suppose someone wants to buy a smartphone primarily to click high-quality photos. In that case, it is irrelevant to try to Upsell them a high-performance gaming smartphone.
Observe and learn what the customer wants to achieve with the product or service they are looking to purchase. Based on their individual preferences, offer them a solution through Upsell.
Take the same example from above about the customer looking for a smartphone to click photographs. You may suggest to them another Smartphone that captures photos in greater detail and can accommodate a broader landscape.
What do people remember easily? Things that are different and unique. Things that stand out from the crowd. However, it is easy to begin using industry jargon while marketing a product, which may scare the customers off. Hence, to increase your average order value, use unique yet simple language for marketing.
Campaign your Upsell products as exclusive and limited in number. Or, you can give a limited-time offer that will expire if the customer does not act quickly. Such offers invoke a sense of urgency in the customer.
If you are selling online, remind your customers how much more they must add to their account to qualify for free shipping. It is an excellent Upsell strategy because many customers will buy an upgraded product to meet the minimum value for free shipping.
Display customer reviews for new customers to see how others found your product. You can also display related or upgraded items which other customers found to add more value. It will nudge your current customers to choose the products which may provide them with the best solution.
Upselling represents a win for the customer. It is supposed to make them happy to have spent a little extra to derive more value. So, it is recommended that you don't try to upsell something that costs too higher than what the customer originally came to purchase.
Experts advise testing your customer's upgradation appetite by trying to upsell a 25-40% more expensive product than the customer's first choice.
Place your product and price offer to attract most customers to select the option you want them to choose.
For example, as per the rule of 3, price an item, a slight upgrade, and the complete upgrade from three different price points. Studies show that clients are most likely to go for the minor upgrade to understand what your upgrade can add to their experience.
Do not give up if your stock for what the customer wants is running low. Instead, show them substitutes and upgraded versions that offer the exact solutions. It is an effective way of using Upselling to your advantage.
You can offer a limited edition or a limited-time update to your customers before shipping the product in online sales. The Upsell should be something that sweetens the deal for the customer by adding more value to the product they had already purchased.
Even if the customer does not go for the Upsell initially, you can always email them a discount code for the product you want to upsell. Do not underestimate the power of email marketing and email remarketing.
If your eCommerce platform customer leaves midway after adding some items to their cart, send them remarketing emails reminding them about their abandoned cart. Remind them about what they are missing.
After analysing an abandoned cart, you already know what the customer wants to buy. So, you can use this opportunity to suggest Upgraded products via emails as your Upsell strategy.
If a customer cannot tweak their fixed budget, use a strategy known as Downsell. Downselling means suggesting an item that can offer them the same solutions but comes at a lower price. Don't forget that the objective is to build customer loyalty and trust to boost average order value in the long run.
The possibilities are endless with Cross Selling techniques. Let's look at some of the most effective tips and tricks of Upselling:
Selling expensive items becomes difficult if there is no list of related products. It helps your customer know what else they can get and how much more value they can derive from the related items.
New customers trust user reviews more than nicely written product descriptions. Make it easier for the customer to leave a review of the products they purchase. Send them notifications and emails to give feedback about the product or service they have availed.
Collect and organise data on the purchasing pattern of customers. These details will help you predict and Cross-Sell relevant products and services to new customers
Too many options can lead to indecision. So, companies use this trick of showing limited products to narrow down the choices that a customer can make, resulting in effective Cross Selling.
Earlier, we discussed how the price of the Upsell product shouldn't be too much higher than the price of the item that the customer initially wanted. When a client is at the checkout counter, suggesting Cross Selling is a good idea. However, things are different when attempting a Coss-Sell at the checkout counter. There, it would be best to make sure the bundled items' price does not increase the cost of the customer's whole cart too much.
Don't even start an online business without a tool to track which customer buys what item. Get a tool that tracks what the customers buy, how often they buy it, how often they change the product, and how they respond to discounts. Analysing past purchases and patterns may disclose a trend. You may use this knowledge to discover a whole new opportunity to Cross-Sell relevant, personalised solutions.
Cross Selling works beautifully when you offer a limited-time opportunity for customers to get relevant related products along with their original intent. Essentially invoke a sense of urgency in the customers. So, make good use of this trick, but do not overdo it.
A product may appeal to one but not to another. So, trying to Cross-Sell additional products to the wrong customer will be a wasted effort. You must know your target audience for each product. Cross-Sell by personalising the experience for them.
Identify customers who have recently visited your site or clicked on one of your campaigns. You can send them retargeting emails and notifications to Cross Selling relevant products.
Display all the items and their relevant add-ons prominently in your store. It helps the customer imagine the pairing of the initially intended product and the Cross-Sell products if they can visualise it.
A properly trained salesforce can contribute immensely to driving your business forward. The people in charge of sales must know which items they can attempt to Cross-Sell to your customers. An unconfident salesperson will make the customer hesitant about their choices.
You must train your salesforce to ask relevant and probing questions to the customer to learn more about them. The salespersons can suggest the right Cross Selling product if they know the customer's pain points and how you can help them.
Sometimes, customers may not respond to the Cross Selling attempts of your sales staff. However, the same customers may pick up something at the checkout counter to round off their bills.
Whatever be the reason for a customer to pick up an item during checkout that they didn't want initially. Use it to your advantage, and display your products well.
Today's customers are already well informed about what they want to buy. You cannot Cross-Sell products simply by stating features and specifications. Instead, give them visualisations of how the additional product will add value to their intended purchase. An excellent example of such a demonstration may be sports and fashion stores. They primarily sell shoes, but a mannequin or poster showing how the shoe looks if you pair them with the clothes that they Cross-Sell.
A great idea to encourage more Cross Selling is to reward customers for purchasing additional items. It does not have to be limited to discounts. You may offer a gift. Or provide loyalty points that the customer may redeem during the next purchase.
Let your creative team come up with innovative rewards. The bottom line is that it should increase Cross-Sell.
It is critical to offer service for your products after the sale is made. You never know when the opportunity for a Cross Selling may appear. Thus, if a salesperson can follow up with the customers periodically, they can learn if the customer is open to suggestions. If a customer calls you after a sale, it is always about a problem they have faced with your product. Your maintenance workers may serve the customer while gauging if there is an opportunity to Cross-Sell.
For example, if a customer buys a washing machine, the people who go to install and service it may notice too much iron in the groundwater in the customer's residential area. They may attempt to Cross-Sell an Iron Guard for a longer life of the washing machine.
While making purchases, customers often tend to lean towards price tags that show prices below a certain threshold. For example, the chances of someone buying an item are more if the price tag is Rs.999 instead of a rounded number like Rs.1000. However, when Cross Selling an item, it helps show rounded numbers to make the decision easier for the customer.
For example, instead of saying, "You can get more value if you add this item to your list for Rs. 59", one could say, "get these added benefits for only Rs. 60 more". Studies show that rounded figures work better during Cross Selling as it helps customers perceive the value addition better.
Every business tries Cross Selling and Upselling. However, some are doing it exceptionally well and set a benchmark in their respective industries. Let's take a look at a few such success stories from India:
Swiggy
As one of India's leading food delivery companies, Swiggy has continuously upgraded its user interface. They have introduced added services like Genie and Instamart to cater to an even broader customer base.
If you add one item to the cart, you get recommendations for items that may compliment your purchase. Suppose you add a Chicken Biryani to your cart. You will automatically get suggestions for Chicken Chaap and soft drinks that go extremely well with Biryani.
The next time you log in to Swiggy, you will see recommendations based on your previous order. The algorithm constantly monitors your purchases and habits to recommend items you are most likely to buy. Such is the power of holistic Cross Selling and Upselling practices.
Amazon
Amazon is one of the biggest companies in the world. It is perhaps the leader in terms of Cross Selling and Upselling. As soon as you search for any product in the Amazon app, you start getting recommendations for more updated versions of those items. When you view a product on Amazon, there are recommended bundles at the bottom to offer complete solutions.
Cross Selling and Upselling are essential for all businesses. However, these sales techniques are not just for making more money. They provide real value to customers and forge lasting relationships with them. When you are honest with your Cross Selling and Upselling efforts, you will:
