Cross-Selling and Upselling: How To Use Both To Increase Sales

Gabriel Ryan
August 11, 2023
December 12, 2022

There are numerous strategies to boost your company's revenue in the modern era. It can be as simple as adding additional products and services to your line or increasing your rates. However, one of the best sales techniques to boost revenue begins with marketing your goods to new and current customers.

In this article, you will learn what upselling and cross-selling are, see real-world examples of these strategies in action, and learn best practices for applying these strategies to boost revenue, increase sales, and satisfy customers.

What Is Cross-Selling?

Cross-selling is a sales strategy that involves offering an existing customer a second product or service after their initial purchase. It also includes the tactic of providing a consumer with a different product or service to boost the value of their current purchase.

When used to increase the value of the purchase and give the customer the feeling that they've scored a great deal, it strengthens relationships with existing and potential customers. This makes cross-selling an excellent growth strategy as it boosts customer retention and lifetime value. Plus, these strategies play into the science of virality by generating more impressions with your current customers - those most likely to refer your products & services online.

Benefits of Cross-Selling

Boosts Customer Lifetime Value (LTV)

One of the ways cross-selling strategy can result in a higher ROI is by boosting customer lifetime value. Customer lifetime value, often abbreviated as CLTV, CLV, or the most-common: LTV, is the estimated amount of money a client will spend with you throughout their relationship.

Beyond profitability, the value of LTV lies in its capacity to measure the quality of your customer connections to discover brand supporters or high-spenders. A successful cross-sell results in a larger consumer sale, increasing the organization's revenue and customer loyalty. 

Creates a More Personalized Customer Journey

Cross-selling that works well should also show off your consumer knowledge. Personalization is now regarded as standard practice. Customers eagerly seek businesses that can provide them with valuable suggestions and product recommendations.

But how does customized cross-selling appear? For e-commerce businesses, this can mean presenting products and services to customers based on their job titles and duties or suggesting products based on a user's browsing or purchasing history.

Offers Convenience and Flexibility for Customers

The advantages of upselling and cross-selling extend beyond businesses. Your customer greatly benefits by having well-educated suggestions for products that would solve their pain points or meet their desires. 

Many do not want to look around for a new small business when they need a specific good or service. They don't have to take a chance with a new eCommerce business for every need if you give them extra options or valuable add-ons.

A satisfied client will be eager to try new offers from your company based on the trusting relationship you've built. By informing them of the relevant goods and services you provide, you can be the first one with your foot in the door as they realize their needs.

Increased Average Order Value

Cross-selling can increase your earnings while also assisting in revenue stabilization. Your average order value (AOV) will increase if customers add more goods to their shopping carts.

Increases Revenue without More Marketing Spend

It's expensive to bring in a new consumer. A fantastic potential for organizations is to increase revenue without adding new consumers or spending more on marketing efforts. 

Cross-selling timeliness and relevancy are frequently what makes it most successful. Cross-selling should be done once you have a customer's attention and consideration to get the highest possible ROI from the initial customer acquisition. 

How to Cross-Sell

Offer Additional Services

Offering supplementary services is one strategy to cross-sell customers. Consider selling a complimentary service if you sell software, for example, or vice versa. For instance, you may offer link-building services if your company sells SEO software.

Provide Complementary Items (Bundle Sales)

Another typical strategy to finish a cross-sell is to bundle sales. A bundling marketing tactic involves businesses selling goods or services as one big package.

The bundled products and services are typically connected but can also include unrelated items that appeal to a particular customer base. For example, Amazon frequently uses this approach in its "frequently bought together" section. Cross-selling is hence made even simpler and more successful.

Make Data-Driven Suggestions

You can sell additional goods or services by considering a customer's prior experiences with your website or market and their purchases.

Pitch Promotions

The best moment to cross-sell a client is if you are already running a promotion for one of your services. Instead of deliberately targeting a client, this strategy is an attempt to emphasize a sale. 

Educate Your Clients

By informing customers, you can demonstrate the advantages of each service and how they apply to your client. Educating clients by sending them ebooks and relevant blog posts or enrolling them in an email marketing course are some tried-and-true methods. 

They will look for additional products once they understand how each service might help their company.

Examples of Cross-Selling

On B2B Sales Teams

Customers using the tool for a while are encouraged to subscribe to Evernote's Premium plus levels. It promotes the extra features that existing customers find helpful and offers a discount if they act promptly.

With an Online Store

An excellent example of a business that successfully uses cross-selling is Dollar Shave Club. They work on a subscription basis, sending members razors and shaving supplies every month.

However, before monthly packages are delivered, Dollar Shave Club will send subscribers a reminder email that features a few related products. Customers then can add these things to their next shipment, raising the total value of their order.

Online clothing retailers use their "Shop the Outfit" carousels, which are found at the bottom of product pages, to show customers how to style their products in the hopes that they will decide to purchase the full ensemble.

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Upselling is a marketing technique that convinces potential customers to upgrade a product or service or buy a higher-priced item. To put it another way, upselling is a sales technique that entails persuading customers to acquire a more expensive product model than they had initially intended.

Companies frequently utilize strategies like upselling to increase revenues since attracting new customers can be significantly more expensive than doing business with existing ones.

Benefits of Upselling

To upsell is to boost the revenue generated from a closed or upcoming sale. However, below are some benefits of upselling:

Upselling Helps Online Stores Build Deeper Relationships with Customers

Upselling can be seen as a customer satisfaction strategy that also increases revenue if it focuses on making your customers "win."By recommending premiums, upgrades, or add-ons that will ultimately provide more excellent value, you make your clients feel like they got the better deal.

It's Easier to Upsell to Existing Clients than to Acquire New Ones

The practice of lead generation is costly. Selling to a current customer who already has faith in you, has already made a purchase from you, or is about to do so is considerably simpler and less expensive than selling to a brand-new prospect.

The likelihood of selling to an established customer is 60–70%, compared to selling to a stranger at 5-20%. Many online retailers looking to boost their bottom line and drive expansion will find it a simple victory.

Upselling Leads to Increased LTV

Customer lifetime value (LTV) is the cumulative net profit a customer contributes to your business. Three basic categories—not profitable, profitable, and highly profitable—can divide your clientele.

A higher LTV means that each customer brings in more money for your company without requiring further investment, which means you have more money to spend on attracting new clients. 

One of the best strategies for taking a potential customer (lead) all the way to a loyal repeat customer is upselling.

How to Upsell

In every business strategy and trend, there are multiple ways to go about implementing them. Below are some basic strategies: 

Facilitate the Original Purchase

Facilitating the customer's initial purchase is the first stage in the upselling process. You can only hope to upsell by adequately attending to the client's initial wants.

Therefore, focus on selling the primary product of equipment or merchandise before attempting to sell the client an addition. The upsell occurs near the conclusion of the sales cycle and occasionally even after the first transaction.

Introduce the Add-on

You should then introduce the add-on item or service. The choice of product or service that you present crucial for a favorable response. Products added on should be pertinent, valuable, and closely tied to the original product or equipment. What do you provide that would make a fantastic add-on item? Is it pertinent? Does it add value to what the client is already purchasing?

Explain the Benefits

Explicitly stating the advantages is the third phase in add-on selling. Tell the client why they should buy the add-on item. However, you should concentrate on its value or the commercial benefits it will bring rather than detailing its features. Make sure the proof is prepared. Case studies, client reviews, images (if appropriate), and anything else that demonstrates the value of the upsell product or service.

Close the Deal

Once you have discussed and demonstrated the benefits that the client should buy the add-on item, you should find it pretty simple to persuade them to do so. Closing the deal is the final step of the upsell process. 

It is a somewhat precise science to market add-ons for an effective upsell funnel. The steps are generally the same, but you'll need to adjust your strategy depending on the client. Make a note to follow up later if the customer indicates they are not yet ready to purchase the add-on item. You'll find that selling add-ons to your clients will be simpler if you nurture your sales leads and maintain client relationships. 

Examples of upselling

B2B Sales Teams

We enjoy Intercom as a marketing automation solution, especially for its conversational marketing feature. In terms of a sales organization, it allows you to use chatbots to automatically qualify leads while also integrating your prospects into multi-channel messaging sequences (email and chatbots).

It's a blessing for upselling; Intercom provides a free, downloadable guide to assist you in creating upsell campaigns on its software.

Upsell vs. Cross-Sell vs. Down Sell

Cross-selling boosts both client value and cart value. Your brand becomes more distinct from your rivals, and customer acquisition and loyalty are increased. Upselling also increases cart value and customer satisfaction rates and yields a higher profit margin.

Down-selling increases brand loyalty, even if it only sometimes increases your immediate value. It makes reaching more customers with different spending capacities easier and enables you to close deals even when a client cannot afford a high-end item. Looking into down selling as a way to get a business off the ground may be a good move. 

Why Are Cross-Selling and Upselling Important for Sales?

Upselling and cross-selling practically go hand in hand and are crucial for sales since they help you raise your average order value. This allows you to generate income and profit at an incremental marketing cost. 

How to Use Cross-Selling and Upselling

Trust is Essential

Trust is the foundation of successful customer relationships. You can establish trust with them by learning about their needs and wants. When you get to know your clients, you can more readily predict their wants and provide them with the goods and services that are ideal for them.

To understand what clients and future customers want, staying involved and in contact with them is crucial. 

Track the Customer Journey

It is crucial to identify possible upsells by tracking the customer journey to ensure that you upsell the products to the appropriate customer at the right time. When a customer is serious about making a purchase, they often contact you over multiple channels, so keep track of them with a CRM.

An integrated CRM (Customer Relationship Manager) will enable everyone within your organization to understand the unique consumer while enabling cross-selling and adding to the customer journey.

Be a Sales Consultant Versus a Salesman

Become an authority on the requirements and wishes of your customers. This way, you can offer solutions to their problems through your products rather than just trying to "pitch" a product to a potential customer.

Recognize the relationship between your product and your customer's industry. Look for areas where they could benefit from using your product or service.

Given your product knowledge and ability to provide unique insights, you are in a great position to offer advice. You may appear more like a sales consultant than a simple salesperson with this level of expertise.

Be Relevant to the Customer

Cross Selling and upselling can be fantastic tools for customers. Few things irritate customers more than having to sift through goods and services that have nothing to do with them or their experiences. Relevance is essential to upselling and cross-selling.

When someone comes to you for a business loan, don't try to pitch them an auto loan. Making sure you provide advice pertinent to your customer's needs will help improve your relationship with them.

Be Proactive

Before meeting with your client, identify any potential challenges or problems. Then, you can find solutions on their behalf when you approach the problem from their point of view. Additionally, knowing what they require and being able to describe it to them in detail beforehand makes it easier for you to sell it to them.

Don't wait for your customer to approach you with a requirement or an upgrade request. Unless you inform them, they will likely be unaware of upgrades or solutions. Instead, engage in creative thinking for your customer and develop potential answers to their difficulties.

Final words

Cross-selling should be viewed as a logical progression of the vendors' existing level of customer support. By providing the client with additional items and services ideal for what they've previously purchased, merchants can provide added value instead of simply delivering a product or service when purchased.

Upselling, however, is a strategy that results from building a sustained relationship with your client. Client retention through the highest value offering is the goal, and the added profit is the result. 

Therefore, only approach customers with an added product if you are prepared and have something to offer them that fits their situation.

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