Cross-selling vs. Upselling: What is the Difference?
By Nikolina Cveticanin
June 19, 2023
If you’re into sales or run a small-business company, you already know how difficult it might be to keep track of everything. Most small-business companies are using some form of CRM to help them keep on top of things and increase sales, but there are also some tactics that you can start implementing on your own. Cross-selling and upselling are the key strategies that can help grow your revenue by boosting the average order value. We will start this article by explaining what each of these terms actually means before discussing how cross-selling vs. upselling works.
Cross-selling definition and purpose
Cross-selling is the strategy of offering customers additional items related to their initial purchase. By implementing this strategy, companies encourage customers to spend more money by purchasing additional items that complement their original purchase. In most cases, cross-selling includes products that users would buy anyway. As people sometimes tend to forget those items, it is beneficial for both sides to point them in the right direction. They will get all they need, and you will get your sales boosted.
What is upselling?
Upselling encourages customers to spend more money by purchasing a more expensive or upgraded version of their initial purchase. To apply the upsell, a salesperson needs to suggest an upgrade or persuade a customer to purchase add-ons. Upselling increases the average order value and helps customers get even more satisfied with their purchase.
The difference between cross-selling and upselling
Now that we know what both of these terms stand for let’s summarize their differences. Here is one of the upselling vs. cross-selling examples we have all experienced. When you’re at your local fast food buying a cheeseburger, the salesperson will always offer to add some fries with that. That is a clear example of a cross-sell, and it’s a win-win situation cause who would say no to fries? If they offer to supersize your meal instead, and you agree, you have just become a “victim” of an upsell.
How to successfully cross-sell and upsell
There are a few things you should know if you wish to master the art of cross-selling and upselling.
Learn all about your product.
The most important thing to do before you start implementing cross-selling and upselling strategies is to get familiar with the product you’re offering. Make sure to look into all of your products and all of their features well to know how those products fit together. By combining two wrong products, you can turn the customer off instead of convincing them to purchase more.
Get to know your audience.
Try to collect as much information about your customers as you can. Real estate companies use CRM to easily keep track of amenities a property might have to ensure they’re presenting the customer with the best option possible. Collecting demographic and psychographic information about your customers and paying close attention to their feedback will make place for the new cross-selling and upselling opportunities. In the long run, these tactics can help you enhance customer satisfaction, which is crucial for running any successful business.
Keep things simple.
Offering too many products might be overwhelming for the customers, and it can create unnecessary confusion. You should always strive to build a long-term relationship with the customers and target a few items that would provide a clear benefit for them.
Offer loyalty perks.
Based on your business model, you should try to establish a loyalty scheme for regular customers. Customers who buy more should enjoy some loyalty offerings and get rewarded for their commitment to your store.
Do follow-ups.
Although there is a clear distinction between upselling vs. cross-selling, you can find the opportunity to implement both of these selling techniques after the customer has already made their purchase. You can achieve this by doing a follow-up after each successful sale to ensure they are happy with the purchase, and if they are, you can easily suggest appropriate upsell or cross-sell products.
Cross-selling and upselling in eCommerce
eCommerce is probably the best environment for cross-selling and upselling. According to eCommerce stats, online retail shops generated 14.34 billion visits in March 2020. These numbers show how the shopping trends have changed over the years. Learning how to make the best out of the new trends is vital, as there are multiple benefits of cross-selling and upselling to consider.
eCommerce gives you a great opportunity for cross-selling and upselling because you have access to customer data and their shopping history, which can help you come up with the targeted offers. It’s also great as you can insert different cross-sell and upsell products throughout the shopping process or in the post-purchase confirmation email.