Upselling and Cross‑Selling: What's the Difference?

What is cross-selling?

Cross-selling is the act of selling products or services to existing customers. A customer might go to a store to purchase a new subwoofer but leave the store with a new subwoofer in addition to a new receiver, speakers, and more, as a result of the salesperson convincing the customer to purchase them. The customer may have had no intention of purchasing all the additional equipment, but the salesperson was so convincing that the customer couldn't resist.

You can use this same technique to increase the number of products that your customers purchase from you, as well. If you offer multiple products, then you need to use cross-selling because it can double or even triple your earnings in a single transaction. Just think how quickly sales can add up if you're able to successfully incorporate cross-selling into your business and marketing strategy.

Examples of cross-selling

Cross-selling occurs on a regular basis, and many people have no idea that there is an official term to describe it. One good example of cross-selling is if you visit your favorite fast food restaurant and you order a cheeseburger and the employee asks you if you want fries with your burger. Another example of cross-selling is if a customer goes to a clinic for acupuncture on their back and the acupuncturist asks the customer if they would like a back massage as well.

What is upselling?

Upselling is when a business attempts to encourage customers to purchase enhanced versions of something that they're already purchasing. For instance, a company that sells backpacks might encourage a customer who is going to purchase a smaller backpack to purchase a larger one instead because of multiple benefits.

Upselling has many benefits when compared to other forms of marketing because the customer is already right there in front of you. It's much easier and cheaper to retain the customers that you already have rather than pay for marketing to attract new ones.

Of course, the idea is to retain current customers and attract new ones, but for new businesses just starting out, this can be difficult due to limited funds. Upselling can help to keep new businesses afloat as they work to build their earnings and customer base.

Examples of upselling

Upselling is a popular sales tactic that is very effective for many businesses. One example of upselling is if you go to the cellular phone store to purchase a basic cell phone and the salesperson tells you the benefits of buying an advanced cell phone instead.

Another example of upselling is if you go to the nail salon for a traditional manicure for the lowest price, but the technician raves about the benefits of opting for a premium manicure instead. Of course, this will be enticing to the customer who has already shown an interest in getting a manicure.

Being offered a premium manicure for a higher cost is an ingenious way to maximize a business's earnings because, in many cases, if a customer is already there requesting a service, there's a definite likelihood that they will respond favorably to upselling.

Another example of upselling is if you go to the store to purchase the cheapest smart TV that is for sale, but the salesperson convinces you of the benefits of buying a more expensive TV that has all the latest and greatest features.

You can see how subtle but effective upselling can be, and if you're still failing to completely understand upselling, then opting to contract with a marketing and sales expert like Mailchimp can help you immensely. In fact, the MailChimp marketing experts will take over the entire campaign for you, and help you increase your revenue in the process.

Cross-selling vs upselling

By combining cross-selling and upselling, you can dramatically increase your revenue. Cross-sell or upsell emails with Mailchimp can work wonders for improving your endeavors.

But first, you need to understand the keys to each sales technique.

Complexity

Another difference is that upselling is selling a more expensive product and is often significantly more simple to achieve than cross-selling, which takes more sales expertise to achieve. Meanwhile, cross-selling requires that you find out more about the customer and what their wants and needs are. It's easy to cross-sell, but if you want to cross-sell the right way, then some research and knowledge are necessary.

Earnings

With upselling, your earnings are increased because the customer is spending more on a larger or enhanced product. When you cross-sell products, you increase your earnings because you are selling more products at the same company.

For example, upselling a customer looking to buy flip-flops could mean convincing them to buy the premium pair with more foot support rather than the basic pair. A similar cross-selling example would be something along the lines of convincing a customer looking to buy shoes to also buy socks or a shoe-cleaning kit, too.

How to cross-sell

Cross-selling can seem complicated and confusing in the beginning, but it's actually an easy way to quickly increase your earnings. In fact, there are many benefits to a cross-selling strategy that so many businesses are already taking advantage of, and you need to do the same.

Here are some of the best tips for increasing sales. To get started, you need to learn what your customers want.

Knowing your customers' past purchases and online activity is important, as well, because it can help you know how to cross-sell a particular person by giving them relevant suggestions.

For example, if you own a natural foods store and your customer is interested in finding a supplement to help them lose weight, don't just sell them a weight-loss supplement. If you do a bit of research, you might notice that they’ve also been searching online for hair growth supplements, and they’ve purchased biotin from your shop in the past.

Obviously, this customer is interested in improving their overall health and appearance, and you can use that to your advantage and offer them multiple products in addition to the weight-loss supplement they’re requesting. Not every customer is going to respond to your cross-selling techniques, but the more you practice them, the more customers will respond and actually purchase the extras that you're offering. So, if one customer declines, the next two could accept.

How to upsell

Upselling is also easy to implement, and the more you do it, the easier it will become and the more comfortable you will be. To start upselling, first identify what you offer that could be upsold, whether because there is a more expensive version or some value add features available.

For instance, if you offer three types of services—a basic, advanced, and premier—for every customer that visits your business and requests basic or advanced services, you can immediately explain to new customers, or even previous customers, the benefits of opting for the premier plan instead and encourage them to switch.

Not all customers are going to budge when you try to upswell them, which is fine. Your customers are entitled to purchase what they want to purchase without upgrading to the superior version or getting an add on.

At the end of the day, it is important to remember the value of brand loyalty and customer retention that can lead to repeat purchases and increase your revenue.

On the other hand, there will be customers who can be easily convinced to go with the advanced or premium plan, so be sure to be consistent and try to upsell each customer to increase revenues.

Boost revenue by cross-selling and upselling

So, if you want to maximize your earnings, then you need to learn to perfect both the cross-selling and upselling sales techniques. Not every customer will be an opportunity for upselling and cross-selling, but by understanding how both processes work, you can make the best decision for each situation.