- Cross-selling encourages shoppers to buy complementary items while upselling gets shoppers to buy an upgraded product or service
- Cross-selling can help sell less popular goods and services, while upselling can help improve profit margins faster
- Personalized service and product recommendations are key to boosting the number of sales you achieve through cross-sells and upsells
Driving more revenue into a business usually entails focusing on two key routes of action: landing new customers or getting existing customers to spend more.
While a growing client base is always a good sign, customer acquisition can cost 6-7 times more than engaging your returning shoppers. Turning your focus to your current customers can help you increase sales and achieve greater brand loyalty over time.
Cross-selling and upselling are two effective sales techniques that businesses use to captivate customers and get them to spend more each time they make a purchase. While similar, these two strategies can offer different perks and lead to different sales results. Read on for a complete breakdown of cross-selling vs. upselling and to learn how to implement the right sales tactics in your business.
What is cross-selling?
Cross-selling is the practice of encouraging shoppers to buy related products or services that complement their needs. For example, a phone retailer might recommend cases, chargers, and screen protectors to customers who are shopping for smartphones.
When this sales technique is successful, customers buy at least one additional product or service along with the one they originally chose.
What is upselling?
Upselling is the practice of getting shoppers to buy more expensive products or services. For example, that same phone retailer could recommend a Samsung Galaxy S22 Ultra to shoppers who are interested in the basic S22 model.
When upselling is successful, customers upgrade the product or service they initially selected by opting for higher-end options or buying add-ons that enhance its value, like an extended warranty for a car.
Cross-selling vs. upselling: What’s the difference?
Cross-selling and upselling can affect the customer experience in two distinct ways.
When you cross-sell, you’re asking your shopper to buy a complementary product or service along with the one they already want to buy. You’re convincing them to put an additional item in their shopping carts that they didn’t intend to purchase before.
When you upsell, you’re asking your shopper to spend more on a different version of a product or service. They’re still getting what they want—not buying an extra product or service—but they’re paying more for extra features or perks.
For a cross-sell to work, your shopper needs to be open to more options but doesn’t need to change their mind about their original purchase. For an upsell to work, your shopper needs to change their mind about the best option for their needs before starting the checkout process.
When to use cross-selling vs. upselling
Cross-selling and upselling are effective sales tactics that can boost revenue in any industry for any business size. When done consistently, they can help any brick-and-mortar store or ecommerce business increase their average order value (AOV), which is the average dollar amount customers spend in a single purchase. However, cross-selling and upselling can be ideal for reaching different sales goals.
Cross-selling works best if you want to sell more products or services across your catalog. It can get shoppers interested in less popular items by bouncing off of the popularity of best sellers, or the options that customers already want to buy. For instance, if most nail salon clients book appointments for manicures, a salesperson could promote pedicures as a way to complete their polished look.
Upselling works best if you want to sell more high-priced items and fewer low-priced ones. This can be highly beneficial if the cost to produce two or more products or services are similar. For example, a SaaS company can sell unlimited versions of its product once they create it, so upselling to higher service tiers offers a far larger profit margin. Upselling doesn’t always work well for brands with price-sensitive target markets but is ideal for clients who prioritize quality.
Examples of cross-selling and upselling strategies
While cross-selling and upselling are distinct sales techniques, you can use similar tactics to make your efforts worthwhile. Improve your bottom line while keeping customer satisfaction high with these upselling and cross-selling strategies.
The most important rule of thumb when cross-selling or upselling is to offer relevant products or services. This means your recommendations should directly support your customer needs.
For example, let’s say you own a mattress shop and have a customer with back pain shopping for a regular mattress. That customer could benefit from buying a supportive set of pillows or buying a costlier memory foam mattress. On the other hand, if you try to sell an entire bed set to this customer, your business could come off as pushy.
By personalizing your recommendations for specific clients (or specific market segments), you can increase your conversion rates, or the percentage of people who spend more due to your upselling and cross-selling efforts.
When you want to create a sense of urgency to get customers to respond to cross-sells and upsells faster, sales promotions can help. Pairing your recommendations with enticing discounts, freebies, or other offers for a limited time can excite your shoppers and spur them into action. For instance, online stores can offer free shipping when shoppers buy a certain product or spend a certain amount.
Pairing upsells and cross-sells with great offers can also help you boost customer retention, which describes how well your brand is able to convince customers to return. This is because you’re adding even more value to every purchase they make, which helps you stand out from competitors.
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Customer journey maps
Cross-sells and upsells must happen at the right times to be effective. Showing an upsell when a shopper is already on your website’s checkout page can be too late, while trying to cross-sell the moment a client walks through your doors can be too early.
To make your sales efforts as powerful as possible, create a customer journey map that identifies all the interactions (or touchpoints) shoppers have with your brand before they make each purchase. This will help you pinpoint when customers are making their purchase decisions—for instance, on product pages of your ecommerce website or in a specific section of your store—so you can upsell and cross-sell on the right channels at the right times.
Enhance your sales strategy with cross-selling and upselling
When comparing cross-selling vs. upselling, it’s clear these sales tactics both have their benefits. Cross-sells get shoppers to buy extra items and can function as a way to sell slow-moving inventory. Upsells get shoppers to buy more expensive versions of their chosen product or service and help you increase profit margins.
While different, effective upselling and cross-selling techniques can overlap. Both of these sales techniques thrive when you personalize your recommendations for shoppers and make sales offers that further increase the value of their purchase. Plus, both sales tactics require your sales team to cross-sell and upsell at the point in your customer journey when shoppers are most open to other options.
Once you start implementing cross-selling, upselling, or both into your strategy, discover five strategies for how to close a sale to help you hone your craft and earn big wins.
The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.