What is Cross-selling and Upselling and How Can They Help Grow Your Business?

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Thanks to the advent of e-commerce websites, today millions of Indian entrepreneurs have grown their businesses to unprecedented scales and have expanded their portfolio of offerings from a single product to a range of products spanning multiple categories. Clearly, their success has a lot to do with the massive reach of e-commerce marketplaces. Having said that, there is a lot that goes into maximizing the reach advantage and becoming a successful online seller.

One such aspect of e-commerce marketing is the use of upselling and cross-selling tactics to potentially increase business revenue and profitability.
What is Cross-selling and Upselling and How Can They Help Grow Your Business?

1. What exactly is Upselling and Cross-Selling?

Cross-selling
Upselling
Upselling is a strategy to sell a more expensive version of a product that a customer already owns. While cross-selling is about selling related or complementary items that enhance the usability of the main product that has already been purchased. For instance, if a customer has just bought a new phone, and is then encouraged, through ads and suggestions, to buy a protective case to go along with it, that would be an example of a cross-selling strategy.

Upselling, on the other hand, would be selling a mobile worth Rs. 25,000 to a customer who intended to buy a device under Rs. 15,000. In e-commerce, though often used interchangeably, there is a difference between cross-selling and upselling in the benefits they offer. However, both can be effectively used at the same time as sales and marketing techniques.

Not only can these selling strategies help you in selling more to existing customers, they also move a wide variety of your products off the shelves faster. Employing a cross-selling and upselling approach helps customers get what they need and provides your business the push to get ahead of the competition.

2. Useful Cross-Selling Techniques

If you seek to pitch additional products to an existing customer, it is important to suggest products that are relevant. Based on the customer’s preferences, you can create a package of related products combined with attractive visuals, alongside a clearly-mentioned cost. If a customer sees genuine value in buying the package instead of a single product, they will definitely choose the package.

Just ensure that the products you are cross-selling are in alignment with the customer’s requirement. For instance, if a shopper has opted for a laptop, you could cross sell a wireless optical mouse, an external drive, and so on. There is no point selling an unrelated product as it would be a deal breaker.

If your business allows you to sell a service over and above selling physical products, you must use that option to cross sell a service that relates to the main product. An apt example would be to cross sell warranties along with gadgets and appliances.
Useful Cross-Selling Techniques

3. The Benefits of Cross-Selling

In the offline world, quick service restaurant chains are a good example of cross-selling strategies in action. These restaurants often sell low cost, but high margin items like fries and other side dishes, along with the main course, which helps improve their profitability. Similarly, on e-commerce websites, many businesses focus on offering add-on accessories at the checkout page.

A customer is more likely to purchase the required additional items at the time of checkout if it offers savings on the shipping cost. According to reports, by adopting this cross-selling strategy, a prominent e-commerce marketplace can generate as much as 35% of its profits. In addition, you are 60-70% more likely to sell to an existing customer versus the 5-20% likelihood of selling to a new customer. For an e-commerce marketplace, therefore, selling to existing customers is a golden opportunity to be tapped.
The Benefits of Cross-Selling
Furthermore, by cross-selling a product that is useful for a shopper, you are helping your customer solve a problem. If you offer additional products that might be needed for the main product to work effectively, you build customer loyalty for your store.

4. When to Cross-Sell?

When to Cross-Sell?
It is very important to determine the right time to cross sell items to shoppers. If you cross sell too frequently, you are likely to frustrate your customers, which could result in them removing items from their carts. Generally, it is a good practice to cross sell to customers on the product page itself or at the checkout stage.

When a shopper is on your product page, they are already interested in the product. So, this gives you an opportunity to suggest related or complementary products. Ensure that you pitch products that cost 10-50% of the main product’s cost. At the checkout stage, it is a good practice to pitch low cost items or add-ons that simply enhance the experience of using the main product.

5. Best Upselling Techniques

As discussed, upselling is used to sell higher value products to customers. You can successfully do it by knowing the shopper’s needs and providing them with a great buying experience. An effective upsell will make your customers feel like they got a great deal and that they have bought something they can be proud of.

Here are a few handy tips to use when upselling:
  • In an upsell, your customer is paying more than they originally intended, so reward them for doing that with coupons or discounts on their next purchase, or freebies, etc.
  • Use the product comparison feature to display the distinct advantages of the more expensive product.
  • Avoid upselling a product that is far too costly for the customer to even consider reviewing.
  • Use a customer’s purchase history to determine the right products to upsell. This will help you showcase items that the customer likes.
  • Avoid making too many product suggestions as this may confuse the shopper and lead them to abandoning their carts.
Handy tips to use when upselling
If upselling is used strategically, it will help you build deeper relationships with customers, and these customers may give you repeat orders. Upselling is one of the most effective ways to turn shoppers into very profitable and loyal customers.

Conclusion

Both upselling and cross-selling help a brand increase its revenues, offer better, more personalized customer experiences, and build brand loyalty. Amazon, one of the largest e-commerce marketplaces in the world, offers a huge array of features that enable the effective cross-selling and upselling of products to help you potentially grow your business.
Disclaimer: Whilst Amazon Seller Services Private Limited ("Amazon") has used reasonable endeavours in compiling the information provided, Amazon provides no assurance as to its accuracy, completeness or usefulness or that such information is error-free. In certain cases, the blog is provided by a third-party seller and is made available on an "as-is" basis. Amazon hereby disclaims any and all liability and assumes no responsibility whatsoever for consequences resulting from use of such information. Information provided may be changed or updated at any time, without any prior notice. You agree to use the information, at your own risk and expressly waive any and all claims, rights of action and/or remedies (under law or otherwise) that you may have against Amazon arising out of or in connection with the use of such information. Any copying, redistribution or republication of the information, or any portion thereof, without prior written consent of Amazon is strictly prohibited.

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