Cross-Selling Vs Upselling: Key Differences And Tips

Salespeople can meet their goals when they complete more high-value sales. Cross-selling and upselling are two different methods to help sell additional products while providing the customer with greater value. Understanding what cross-selling and up-selling are can allow you to help a business increase its sales and meet its revenue goals.

In this article, we explain the differences between cross-selling vs upselling and provide tips for implementing these sales methods.

Key Differences Between Cross-Selling Vs Upselling

Here are some key differences between cross-selling vs upselling:

Definition

Cross-selling is a strategy that involves selling products that complement one another to customers. Upselling is a strategy that involves convincing a customer that they could benefit from purchasing a higher-end product. Both sales methods begin with a customer's interest in a product. Salespeople attempt to make the impending purchase more valuable by attempting to upsell or cross-sell a product.

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Purpose

The purpose of cross-selling is to introduce products in a lateral manner. The products that cross-selling introduces do not act as replacements for the original product. Instead, they improve a customer's experience with the original product of interest. Alternatively, upselling involves introducing a premium or upgraded version of an item. If upselling is successful, a customer may abandon purchasing the original product of interest in favour of buying a more premium one.

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Value

Upselling and cross-selling are similar in that they both attempt to offer additional value to the customer. Both strategies expose potential customers to additional offerings that they were not originally able to view on their own. Salespeople partake in upselling and cross-selling to increase the monetary value of the sales they complete and help their companies generate more revenue.

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Tactics

Upselling and cross-selling involve the use of different tactics and persuasion strategies. With cross-selling, a salesperson attempts to convince a customer of the value that additional products can offer in addition to the original product they wanted. With upselling, a salesperson tries to convince a customer to purchase a different version of a product by explaining the value it can offer over the original product of interest. Salespeople who use upselling may try to appeal to buyers with higher budgets, while salespeople who use cross-selling may try to appeal to customers' sense of practicality and desire for convenience.

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Tips For Upselling

Here are some tips to increase your success with upselling:

• Use social proof to convince customers. You may consider using social proof to convince customers to make a premium purchase. Emphasise that the more expensive option tends to be more popular with other customers because of the greater value it provides.

• Provide alternative options for out-of-stock items. If you work for a company that primarily sells products online, you can propose the idea of listing alternatives for out-of-stock items. If the company is out of a standard product, it can suggest a more expensive item to a customer who has already shown interest in a similar product.

• Use free shipping to upsell customers. If you want to encourage customers to spend more money but give them the freedom to buy what they want, you can incentivise them with free shipping. Set a minimum spending amount and offer free shipping once your customers reach this amount.

• Use product warranties to upsell customers. If you work for a company that sells expensive products, you can use product warranties to upsell customers. Offer protection on the product for a predefined period to improve the customer experience and increase the company's average order value with no extra overhead costs.

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Tips For Cross-Selling

Here are some tips to increase your success with cross-selling:

• Restrict the number of items you cross-sell. You can limit the number of items you cross-sell to one or two per purchase. Keeping the items low can help you retain a customer's focus and avoid overwhelming them with options.

• Determine the value of cross-sales beforehand. Decide what value a cross-sale can offer a customer before you present it to them. Prepare to answer questions about the potential benefits of a cross-sale so that you can convince them of its value.

• Time all cross-sales accordingly. While some companies introduce cross-sales after a customer makes their initial purchase, you may consider introducing them earlier on in the sales process.

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Examples Of Upselling

Here are some examples of upselling so that you can understand how to implement it:

Example 1

Here is an example of an upsell from an airline company:

Lucky Airplanes is an airline company that sells flights to locations throughout Asia and Europe. It allows customers to purchase flight tickets online. For the company's flights that are four hours or longer, it allows customers to choose their seats for an additional fee. This tactic is an upsell because while the customer can pay the standard price for a random seat, they can pay a small charge to get a seat that is closer to the front of the plane, offers more legroom and offers access to a personal media screen.

Example 2

Here is an example of an upsell from a cleaning company:

Housekeeper Happiness is a housekeeping company that offers residential cleaning services. It lists two major cleaning packages on its website. The first package includes the weekly cleaning of a home's dining room, living room and up to two additional rooms. The second package is more expensive, but it includes the weekly cleaning of a home's dining room, living room and up to five additional rooms. Customers with larger houses prefer this service and are willing to make the more expensive purchase so that they do not have to clean as many rooms themselves.

Example 3

Here is an example of an upsell from a company that sells robotic vacuum cleaners:

Vacuum Fusion is a company that sells robotic vacuum cleaners that operate autonomously. It lists two major offerings on its website. The first product is a robotic vacuum cleaner that can pick up dust, hair and dirt and works best on carpeted areas. The second product is also a robotic vacuum cleaner that can perform the same duties as the first product, but it also has mopping abilities. Vacuum Fusion adds a 'Best Seller' label to the second product so that customers may feel more inclined to purchase the more expensive product that offers greater value.

Examples Of Cross-Selling

Here are some examples of cross-selling so that you can understand how to implement it:

Example 1

Here is an example of cross-selling at a car dealership:

Calypso Cars is a used car dealership that sells various pre-owned cars, trucks and other vehicles. Whenever a customer purchases a vehicle, Calypso Cars' salespeople attempt to cross-sell floor mats. The salespeople explain that floor mats can help protect the carpeted floor from mud and dirt, preserve the vehicle's resale value and increase the interior's aesthetic appeal.

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Example 2

Here is an example of cross-selling at a clothing retail store:

Thunderbird Clothing is a clothing retail store that wants to increase its sales of summer apparel. It places clothing articles on mannequins throughout the store to show what entire outfits look like put together. The mannequins wear clothing articles like sandals, shorts, T-shirts, sunglasses, baseball caps and bandannas. Customers may be more likely to purchase the entire outfit when they see how each individual clothing article complements the others.

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Example 3

Here is an example of cross-selling at a restaurant:

FirstCoast Haven is a restaurant that wants to increase sales of its side dishes. Whenever a customer orders the establishment's signature chicken dish, the server asks the customer if they want to add a side dish of baked sweet potato wedges. The server attempts to convince customers of agreeing to this cross-sale by explaining that the sweetness of the baked sweet potato wedges complements the chicken's savoury taste perfectly.

Please note that none of the companies, institutions or organisations mentioned in this article are associated with Indeed.