We are sure that you have already seen or been the target of Cross-selling and Upselling Marketing strategies, even if you have not recognized them as such. In summary, both Marketing strategies are based on complementing the sale of a product or service.
In the case of Cross-selling, the intention is to include auxiliary items when selling the original item. Upselling, also known as suggestive selling, consists of persuading customers to buy an updated or more expensive version of a product or service.
The goal of both strategies is to maximize profits and create a better customer experience. This experience can translate into an increase in customer perceived value and an increase in customer lifetime value – the total contribution a customer makes to a company.
How does Cross-selling work?
In order to better explain how Cross-selling works, we will describe some examples of strategies used in different sectors.
If you go to a fast food restaurant and order just the sandwich, you’ll be asked if you want the sandwich with fries and a drink. This is Cross-selling. The star of the menu is always the sandwich and potatoes and drinks are the complementary products that enhance the menu and make customers end up giving in and buying more.
Other examples of Cross-selling, in other markets, include offering a backpack, mouse and cleaning products when buying a laptop, or including a type of insurance when investing in a car.
In online stores, Cross-selling is also used very effectively, by recommending related products based on the customer’s research. For example, on fashion websites, the product page always shows other garments or accessories that complement the look.
What about Upselling?
Returning to the example of fast food restaurants, when the customer asks for a menu, he is immediately asked if he wants a larger size.
Another example is streaming platforms that offer different plans to customers, and the more expensive the plan, the better the image quality or the greater the number of people who can use an account at the same time.
In short, Upselling consists of providing more expensive, complete and up-to-date alternatives, in order to dissuade customers from the cheaper product and convince them to buy the more expensive offer.
Five common practices you can apply to your website
1. Offer additional services
If your company specializes in selling software, consider selling an add-on service. For example, if your company sells SEO software, you could provide link building services or even a short keyword research course.
2. Provide complementary articles
The sales package is another common way to maximize the profit of a sale. Amazon uses this method frequently by referring to the “Frequently Bought Together” section.
If you have a sunglasses store, for example, you can include a sales package that includes the glasses, a carrying case, a cloth and even a cleaning product for the glasses.
3. Make suggestions based on collected data
With the information your site can automatically collect, you can sell additional products or services by looking at a customer’s past interactions and purchases they’ve made.
If, through interaction with your website, you discover that a customer has sought more about a particular service or type of product, you can make direct contact with that customer suggesting a particular service or product that you consider most appropriate.
4. Promote specific campaigns
When you have a promotional campaign running, whether it’s thematic or to sell out of stock, take the opportunity to increase sales with your customers. Try to include in your promotion a package that includes several articles or the inclusion of additional services in your monthly subscription.
This approach serves to highlight a sale rather than targeting it specifically to a customer, so there is less inherent risk associated with it.
5. Keep your customers informed
Some customers may understand that the services you provide are important, but may not understand why this is important.
By educating customers, you can illustrate the benefits of each product or service through articles and newsletters, which the customer can always consult in order to better understand their needs and how they can satisfy them.
Conclusion
Both Cross-selling and Upselling are marketing strategies that, if well applied, can increase the company’s financial results and customer loyalty. However, if they are misapplied or over-resourced, they run the risk of eroding profits, conveying a perception of aggressive marketing and generating customer dissatisfaction, which damages the company’s reputation.
Neither strategy requires a one-size-fits-all approach, and companies should explore which approach is best suited for their business model. They are always excellent ways to attract new customers. However, don’t neglect existing customers, as they are more likely to buy additional products.
Last but not least, both Cross-selling and Upselling can help you understand your target audience and filter out dissatisfied customers from customers whose needs
have not yet been fully assisted. Remember that the greater the customer satisfaction, the greater the chances of increasing your company’s profit.
