A customer’s revenue potential doesn’t end after they make a purchase. There are plenty of ways to make more money from a customer after their initial purchase, and using strategies like cross-selling and upselling can help you take advantage of those opportunities.
A survey of more than 500 sales professionals shows that those who upsell and cross-sell say it drives up to 30% of their revenue.
What is cross-selling?
Cross-selling is the act of selling complimentary products alongside the primary product. For example, if you have already purchased a subscription to a marketing tool, you may be encouraged to purchase a subscription to a CRM.
If your company has a product or service that would be a good complement to a customer’s initial purchase, cross-selling can be a good way to generate additional revenue.
Cross-Selling a Cheeseburger
If a customer at a fast-food franchise orders a burger, the employee would give the customer their burger. If you wanted to cross-sell, you would offer extra items that go well with the item the customer is already buying.
You can offer to add an order of fries and a milkshake to go along with the burger. In this case, you would buy complementary products to go along with the initial purchase.
What is upselling?
Upselling is convincing customers to buy more expensive versions of what they were originally going to purchase. This can be done by offering an upgrade, enhancement, or premium option.
With upselling, you are offering a more expensive or premium version of the product that the customer has just agreed to buy, instead of a different product that compliments their initial purchase.
In other words, you’re trying to sell a product that is not related to the original product.
Upselling a Cheeseburger
Our example from above is a fast food burger. To sell a more elaborate burger, you would offer options for a more upsell burger. For example, you can add a slice of cheese or a pickle to your sandwich for an additional fee. You could tell your customers about a better quality cut of beef for a slightly higher price.
You could try to convince the restaurant to add an extra patty or a few strips of bacon to your burger for an additional fee, or you could tell them about a higher-quality cut of beef that you could choose for a small premium. You would sell the central item in ways to enhance it.
What’s the difference between cross-selling and upselling?
Upselling means selling a more expensive product, while cross-selling means selling a different product. Cross-selling involves selling additional products that complement the initial purchase. Upselling involves convincing a customer to buy a more expensive or advanced version of the product they were originally interested in.
Even though the terms are often used interchangeably, the approaches for each are different. If you were selling burgers at a fast food restaurant, you would try to get the customer to buy a more expensive burger by adding extra toppings. You would also try to sell the customer other items in addition to the burger.
Benefits of cross-selling and upselling
Cross-selling and upselling are ways to get more money from your customers by selling them additional products or services. Having a strategy for cross-selling and upselling helps keep customers and decreases the amount of customers leaving.
Here are five reasons why both strategies are effective every time.
1. Improve customer retention
Some marketers would rather keep their current customers than attract new ones.
Loyal customers should be your priority. In other words, these are the customers who are content with your customer service and not actively seeking a better deal. They like how your brand consistently meets their expectations. It’s more cost effective to keep customers than to get new ones.
Upselling and cross-selling strengthen customer relationships. You need to demonstrate to your customers that you are not simply interested in taking their money but that you care about their interests.
If you’re selling a bicycle, include a helmet and other cycling gear to show your customers that you care about their safety. This is how retention marketing works.
2. Increase the average customer lifetime value (CLV)
Upselling and cross-selling are effective sales strategies that can increase sales and contribute to customer lifetime value.
If you want to increase your average customer lifetime value, you can do so by providing personalized experiences to your customers based on their individual actions. This way, you can please your current and potential customers without offending them.
3. Generate a return on investment (ROI)
Upselling and cross-selling are essential for increasing ROI in any industry. Here are some ways you can get the maximum attention from your customers:
- Consumer testimonials: Add a consumer testimonial to convince your customers of the other buyers’ firsthand experiences. People trust honest opinions from fellow consumers even more than the brand messaging.
- Loyalty points: Introducing loyalty points connects customers with brands more meaningfully. It makes them feel special and part of a community. They’re rewarded for buying from you, compelling them to buy from you again.
- Consumer recognition: Brand mentions are the best way to connect directly with customers, build brand loyalty, and increase sales. By including a gift or special offer, you can increase the chance of more sales.
- Product ratings: Online shoppers first check product ratings and customer reviews before making a purchase.
- Call-to-action: A call-to-action persuades potential customers to take the necessary action and helps them purchase via buttons, links, or clickable images.
4. Balance growth between new and existing customers
Cross-selling and upselling are essential for business success. Enthusiastic customers can be extremely valuable to a company by referring new customers and providing support. The positive relationships between customers creates a upward spiral effect where new and existing customers help each other to grow their client base.
5. Enhance customer experience
Using the right cross-sell or upsell strategy can help customers make purchasing decisions more quickly. If your customers buy clothes online, you can offer shoes or jewelry as an upsell.
You shouldn’t try to make customers buy things they don’t want. Instead, give them more options of what they might want to purchase and make sure their experience is as smooth as possible.
How to Cross-Sell and Upsell
Sales techniques that involve selling additional products to existing customers (cross-selling) or upgrading customers to a more expensive product (upselling) can be used at any stage of the buyer’s journey. One way to be effective in upselling or cross-selling is to map out the customer journey to identify the most effective opportunities. Other top strategies include:
- Establishing customer trust
- Researching your client’s business to identify challenges and opportunities
- Using personalization or behavioral segmentation
Below are our best practices to learn how to cross-sell and upsell:
1. Get to know your audience.
It is important to know your audience after they have bought your product. You can use information about your customers’ demographics, psychology, and feedback to create customer personas and better understand what kinds of products they would be interested in. This will help you to cross-sell and upsell more effectively.
2. Build out customer journeys.
After you have your personas, you need to map out their customer journey. This means figuring out how they will use your product and how it will help them grow. Your customers will begin referring other people to your product when they start noticing results.
When the customer gets to that stage of the journey, they will be excited to hear your cross-sell or upsell pitch and will probably spend extra money on your additional offering.
Don’t try to sell them anything until they’re ready. After someone has made a purchase, it will be difficult to sell them additional products or features until they have seen the value in what they have bought.
3. Think about problems and offer solutions that map to products.
It’s important to take some time to review your product offerings and find your customer’s current place on their journey before trying to sell to them.
This will allow you to see the common problems that your customers face so that you can offer them a solution through either cross-selling or upselling.
4. Practice active listening.
Make sure to pay attention to your customer’s cues in order to cross-sell or upsell to them effectively.
If your customer is looking for ways to improve or accelerate their progress, you may want to mention how your other products or services can help them.
Cross-selling examples
Cross-selling can be observed in an everyday sales scenario. Here are some of the most common cross-selling examples.
The “frequently bought together” section
Encourage customers to add more products to their orders. Amazon, for example, offers a range of products that are often purchased with the selected item.
If you offer customers more than one way to buy from you, they’re more likely to make a purchase, and your brand will be seen as more valuable. To achieve this, split your shopping cart page layout into two to three sections and fill each section with a combination of your most popular products and recommended products.
Trial products
To cross-sell effectively, you must highlight how the customer will benefit from the purchase. If you try to make people buy something they don’t want, they probably won’t trust you anymore. You should give your customers free samples of your products with their purchase.
Additional services
What comes after customers buy a product? Most likely an additional purchase.
If you sell cameras, you might suggest buying a tripod to enhance the customer’s experience. This list includes batteries, tripods, card readers, and other accessories that might be needed.
Promote what other customers bought
There is another way of getting customers to purchase more than one item and that is to give recommendations of other items that other customers usually buy. Checkout pages are particularly effective in promoting this strategy.
For example, you have a bike accessories store. You can create a promotion on the checkout page for accessories that customers who bought the same bike also purchased.
Upselling examples
In most cases, businesses need to work harder to upsell their products. Here are some useful upselling examples.
Free shipping
Online shoppers often find themselves surprised at the high shipping cost when they get to the checkout page. If people can’t afford high shipping costs, or if they don’t want to pay them, they will usually leave the website without completing their purchase.
An upsell opportunity exists where free shipping could be offered for orders over a certain amount. The user is charged $10 for shipping unless they spend $75, which encourages them to spend more.
Rewards
An upsell is when a company tries to get you to buy a more expensive version of what you were originally going to purchase. Domino’s Pizza is a great example of an upsell concept because they offer different sizes and types of pizzas. Domino’s doesn’t waste time! The store is doing very well and keeps providing customers with reasons to buy more from them.
Customers who would normally order a medium sized pizza and drink, might order large pizzas and desserts to earn free points.
Recommend the most valuable package
The VIP plan ends up with more users because it is the most worthwhile. This package helps you to sell more by recommending products.
You can influence the user’s attention subtly and help them choose something they usually skip. This is a brave decision, but it is one that could pay off. The goal is to get customers to check out premium options and help them determine if it is a worthwhile purchase.
Deals of the day
The deal of the day also enhances your credibility. People may be more inclined to come back to a store if they feel like they will miss out on something by not returning often. Additionally, it may just be more fun for people to check back frequently to see what new deals are available. However the reason, daily deals are effective in boosting conversion rates.
Try to promote the products that sell the most. For instance, if you see that your sweater sales are going up, put your best sweaters in a prominent place.
Try selling different products this summer if last summer’s soccer gear didn’t sell well.
When done right, upselling and cross-selling are powerful strategies
There are many choices that customers have to spend their time and money. The market is fiercely competitive. To ensure that your customers keep coming back, it is important that they have a great experience. To be successful, you must use these sales techniques correctly, without going overboard.
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