Cross-Selling vs. Upselling: Bolstering Your Revenue
Selling a customer a bar of soap is money earned, but it’s not going to keep a business afloat. You want to encourage customers to spend more. To do so, you need to show them everything else you have to offer. That’s where the two sales tactics – cross-selling and upselling – come into play. Despite being distinctly different methods of boosting profits, they are mutually beneficial practices that derive the most value from a single customer without the additional costs of renewed marketing. If you’re seeking ways to bolster your revenue, it’s important to weigh the advantages of cross-selling vs. upselling.
What is Cross-Selling?
Ever been asked, “Want fries with that?” Cross-selling is the method of suggesting complementary products to accompany an intended purchase. For example, a toothbrush can be cross-sold with a tube of toothpaste, or a credit card may be pitched alongside the opening of a new savings account. The goal of this sales tactic is to pitch the consumer a product they’re likely to purchase anyway but just weren’t aware of at that moment. It’s a means of earning repeat purchases due to convenience and to boast of your expansive catalog of products.
What is Upselling?
Upselling is a way of convincing a consumer that a higher-end product will more effectively address their pain points. If a pet-loving customer is buying a low-end vacuum from your business, the logical step would be to upsell them on a pricier vacuum that’s approved for pet fur. The goal is to get the customer to spend more on the same product type or an upgrade while receiving greater value in return. Comparison charts are a prime example of upselling, where the features of two similar products are rated – with the more expensive one clearly holding the advantage.
How Does a Business Cross-Sell and Upsell?
These two methods share some of the same practices, as both usually occur at the point-of-sale. Seeking opportunities to cross-sell or upsell can be difficult, as it requires understanding what your customer is looking for. The following are some of the steps required for either method:
- Know Your Audience: Developing an ideal client profile will help you familiarize yourself with your customers’ buying patterns and the psychology that makes them receptive to cross-selling or upselling.
- Offer Solutions: Before attempting either method, make sure you’re fully aware of the challenges the customer is facing. When you’ve identified their problem, offer your product as a solution for their particular pain point.
- Actively Listen: When a customer enters your business, keep your ears to the ground for any clues to what your client wants. Perhaps they mention the need for toiletries for their new apartment or are looking for stocking stuffers for a knitting enthusiast.
You only want to try to cross-sell or upsell a product if you know the customer will use it to truly better their experience. Using either sales method for the sole purpose of making more money can create resentment and damage customer loyalty.
Is Cross-Selling or Upselling Right for Your Business?
Cross-selling and upselling don’t fit every scenario. If you’re a small business that can’t afford a team of sales reps or have a limited range of products, it can be difficult to apply these tactics. However, there are options that even smaller companies can employ.
Ecommerce platforms can offer suggested purchases. Have your website pitch sales on your behalf. If the customer has a pair of sunglasses in their shopping cart, cross-sell them on a lens cleaner product or upsell them on the same pair of sunglasses with UV protection as they’re checking out. Alternatively, build an email marketing campaign that follows up on purchases with suggested upgrades or related products.
Let those performing their own research know about additional products or upgrades that can increase the value of their purchase. Write a blog about how investing in a computer with a faster processor will drastically improve their gaming experience, or create a digital brochure that compares and contrasts the features of your products.
Cross-selling and upselling will only derive benefit when pitching to a customer with whom you already have a good reputation. Allowing a relationship to blossom will often increase the success of cross-selling and upselling.
When determining whether cross-selling vs. upselling is the best option for your business, it comes down to the resources you have on hand. It takes a lot of work and attention to detail to increase your revenue using these sales methods. At Vision Advertising, we have decades of experience consulting clients on how to increase their value to customers and manage a brand that resonates with their audience. If you would like us to help generate more sales leads for your business, contact us today.