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

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.

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.

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.

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.

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.

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:

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.