In recent years, an increasing number of companies are relying on marketing strategies based on upselling and cross-selling to increase revenue. According to a 2022 HubSpot Blog survey of more than 500 sales professionals, 74 percent of salespeople who cross-sell and 72 percent of those who upsell say their revenue is tied to that strategy by up to 30 percent. In order to get a more detailed picture of these two sales techniques, it is interesting to analyze their definition and differences.
Cross selling: what is it
The term cross selling identifies the sale of additional services or products related to the product purchased by the consumer, or in which the consumer has expressed interest. For example, in cases where a user has purchased a subscription to video streaming services, he or she may also be induced to purchase related solutions, such as audio tracks of the movie viewed or additional content.
Such a solution is also used by large catering companies, in fact, when buying a branded sandwich, with a good cross-selling operation you can also sell foods that complement the meal, such as soft drinks, chips and so on.
Upselling: what it is
The term upselling, on the other hand, identifies a sales technique by which the consumer is incentivized to buy more product than originally budgeted. This process is mainly done by taking advantage of incentives and promotions.
The purpose of this technique is to increase the buyer’s productivity and induce him to consume more even if he does not really need it, or to stockpile the product, delaying a subsequent purchase that might lead him to a competing brand or product.
Restating the previous example, an effective upselling operation lies in offering people who need a sandwich to feed themselves, incentives to increase the quantity. In this case, a larger package can be offered at an increased cost, or new ingredients can simply be added to the sandwich itself.
In the restaurant industry usually upselling is used to offer qualitatively better products, albeit at a higher cost.
Upselling and cross selling: difference
As much as the terms upselling and cross-selling are often used synonymously, they actually differ considerably in their approach to the consumer.
Although both marketing techniques are devoted to boosting sales, upselling focuses its strategy on adding services or products to the main purchase made by the consumer, perhaps with an enhanced version, while cross-selling adds different but functional elements to the initial product to make it complete and usable in the best possible way.
In the case of selling the same sandwich, with upselling you would opt for a strategy that improves its ingredients, such as cheese or onion; while with cross-selling you would add additional items such as chips and soda, which are extra to the sandwich itself.
Upselling and cross selling: the strategies
As pointed out earlier, both upselling and cross-selling are two strategies that constantly accompany the consumer in the sales process. Being able to identify the best times to sell is essential in order to achieve the best possible result.
For this to happen, it is appropriate to track the consumer’s journey, either with dedicated software or with marketing strategies that lead them to do something that maximizes the profit from the sale itself. But not all companies can implement, or want to implement, technology systems, having to rely on different strategies. The most effective alternatives to customer monitoring are mainly three: trust, research and personalization.
Trust: establishing trust with customers is essential to induce them toward upselling or cross-selling.
Research: understanding what your client’s business is can help determine what approach is best. Not all users like cross selling, understanding it in advance improves the user experience.
Personalization: a strategy based on personalization makes it possible to tell with little information whether a customer prefers upselling or cross-selling.
Upselling and cross selling: the best techniques
Being able to determine the needs of customers is essential to initiating a sales technique, be it with upselling or cross-selling. To learn how to perform these two sales techniques, some considerations should be taken into account.
Customer knowledge: having a target audience can certainly help in deciding which sales technique to use, but it is not always possible to identify it clearly. Obtaining customer information through dedicated software, feedback, newsletters and interaction tools will help companies understand the needs of shoppers.
Pathway: every website or physical store needs a well-defined pathway in which the customer must find the products best suited to his or her requirements. Airports and physical stores with storefronts are obvious examples of this sales technique.
Troubleshooting: when offering a product or service, it is essential to think about how that product can solve the problems of those who are using it. A person who buys a sandwich will have a need to eat; this issue will also be compounded by a problem-solving process that will cause him or her to purchase a bottle of water.
Active listening: to best understand what the best strategy might be, it is appropriate to perform the practice of active listening. In a physical store, dialogues with customers are an excellent source of information to understand their desires; whereas with online platforms, dedicated software can be used to monitor the sections viewed and heatmaps.
Upselling and cross selling: the importance of teamwork
Executing an optimal upselling and cross-selling strategy is definitely not easy, whether done online or in a physical setting.
Employing a working team is a key point from which to achieve relevant results. The work team will be able to understand and accommodate the needs of the clientele, determining the best approach based on the moment and the possibilities created.
But if in a real-world context both upselling and cross-selling are tied to the work team, how can a digital platform establish the ideal conditions for undertaking one or the other technique? In this case, it is appropriate to turn to technologically advanced solutions, implementing software and tools capable of monitoring, analyzing, and deciding what the best strategy might be based on the information gathered through website sign-up and interactions on the platform itself.
Upselling and cross selling: techniques for the team
In order to maximize AOV (Average Order Value), which is the measure of how much a consumer spends on average each time he or she makes a purchase, it is imperative that the work team, whether this is directed at collecting data in a physical location or on a digital platform, must follow guidelines. Usually, there are three conditions to be evaluated.
Customer feedback: one of the most useful strategies to understand whether the customer is interested in upselling or cross-selling is to analyze their feedback. A physical store may take in this information from a direct question from the work team, while an online platform will manage this dynamic with a post-purchase evaluation or real-time survey.
Assistance: further positive approach to customers is to be identified in the quality of assistance offered. The customer should not feel that he or she is obliged to buy anything else, but should be informed of the various options made available to him or her and choose for himself or herself. The consumer experience must always be pleasant.
Advertising: an aspect not to be overlooked when the team interacts with customers is to set up a non-invasive sales strategy. Placing advertisements or digital banners on the platform while browsing can be productive, but it should not be invasive to those who are using a service.
Upselling and cross selling: examples
Effectively applying upselling and cross-selling techniques may not be easy, but it can greatly improve sales. To get a clearer idea of these potentials, it is interesting to analyze some concrete examples in everyday life.
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Upselling in this case can be accomplished through a sales representative alerting customers to an impending price increase, then offering the updated options at a very similar price.
Cross selling, on the other hand, would place the sales representative as the one who informs customers that they can add an additional tool to their subscription, such as a photo editing program.
In the case of applying an upselling technique in customer education, the company could add links to pages that inform the consumer about the desired topic, such as the FAQ section.
In the condition where a cross selling technique was applied instead, the company would add extra products to increase the information on the main page. If a brand were to sell a desk by adding dedicated photos, descriptions and text, it could convey the customer to purchase desk accessories that increase the final cost.
An online store, aimed at selling technological tools, such as a personal computer hard drive, can apply an upselling technique by offering the same product with a larger memory size.
While a cross-selling solution aimed at selling T-shirts can also add the purchase of a sweatshirt to the initial offer, guaranteeing a discount on both items of clothing.
In recent years, several online services have been applying these two marketing techniques. For example, a sports professional may upsell a weekly or monthly subscription, guaranteeing a discount for additional memberships.
The same reasoning can be applied to a language tutor who can plan to cross-sell by adding ACT training to a discount.
Upselling and cross-selling can maximize AOV, but they require a quality IT infrastructure for digital businesses. For this to be optimized, it is advisable to conduct a digital test to understand your company’s level of digitization and respective needs.
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