Cross-selling and up-selling: differences and examples in 2024
Whether for an e-commerce site or a physical store, mastery of several marketing methods aimed at increasing the average customer basket and developing sales is now absolutely essential. Among these methods, cross-selling and up-selling are among the most effective and proven techniques. These terms refer to the concepts of cross-selling and up-selling. In this article, we'll explain how these two key concepts of up-selling and cross-selling work, and provide you with practical case studies and examples to inspire you to increase your conversion and loyalty rates, while boosting your sales.
Cross selling: what is it?
Definingcross selling and how it works
Cross-selling promotes additional products that complement or enhance the product the customer is looking for. As a result, a successful cross-sell leads the customer to purchase the initial product and one or more related products.
The aim of a cross-selling campaign or one-off action is therefore to offer products that are highly relevant to the initial purchase and likely to make the customer's life easier. In other words, we're inviting customers to increase their shopping baskets, so the product offered must be useful to them.
In fact, this strategy aims to increase the average basket size, as well as the number of products per basket. In particular, the purchase of a phone may involve the supply of several accessories, enabling the customer to get the most out of his or her main purchase, such as a protective shell and glass, an external battery or headphones.
In terms of customer experience, this merchandising technique is also a way of offering personalized service to satisfy customers and build loyalty. It enables the levers of enchantment to be triggered: customers will be even more satisfied if they feel that one of their additional needs has been anticipated, and they may become loyal customers. This action adds value to their purchase: thanks to the related item added to their basket, their purchase is complete, and the use of the main product is enhanced as a result.
However, in order to cross-sell, you first need to know your customers well, identify their needs and predict their behavior. There are several ways of refining this knowledge. It's essential to build up a customer file with actionable data such as the products customers buy most often, the trends they're drawn to, the offers they're interested in, and so on. By personalizing the entire customer journey through active listening, it is possible to capture valuable information on customer needs and expectations. In this way, customer knowledge and analysis tools, together with CRM, can be used to implement cross-selling actions that are truly relevant to additional customer needs.
Benefitsof cross selling
Like all sales strategies, cross-selling can be effective and produce a number of advantages or positive effects. Here are the main points:
- Increase sales: Cross-selling helps increase sales and margins.
- Adding value : Customers are satisfied when the company is able to meet their needs. A brand that takes an interest in its customers is likely to know more about their habits and interests. As a result, it can better satisfy their needs. This positive approach adds value to the company.
- Improving brand loyalty: cross-selling makes it possible to offer products and services that might be of interest to the customer in relation to their main purchase, saving them time by avoiding the need to scour the catalog for them. In this way, the customer develops a positive feeling towards the company, which has the merit of having understood and anticipated his needs.
- Building customer loyalty: Cross-selling builds customer loyalty and strengthens brand loyalty. When customers feel that their needs have been understood and met, they are more likely to turn to the same brand for future purchases. Little bonus: following a good buying experience, they'll also be in a position to make positive recommendations and subsequently bring in new customers through word-of-mouth.
Crossselling: 6 mistakes to avoid
There are no real drawbacks to cross-selling. There are, however, certain risks and mistakes to be avoided. Here are the main ones.
1. Proposals without added value : One of the most common mistakes is to present customers with an indiscriminate range of proposals without first analyzing the behavior and trends of each profile. The items proposed must be relevant and bring real added value to the customer, at the risk of being badly perceived and creating a feeling of disappointment with the brand.
2. Not making the most of your database: In order to make truly relevant proposals, it's important to know your audience and to study the information they provide to find out what corresponds best to them, based on their original purchase on the one hand, and their interests and expectations on the other. This is possible thanks to cookies, but also thanks to information gathered via Google Analytics or other customer profile analysis and segmentation tools.
3. Not measuring results: As with any marketing strategy, it's essential to study and measure the results obtained, in order to optimize them. Indeed, as more and more users buy, the company will have more data to analyze and, on this basis, will be able to offer its customers better solutions.
4. Overpricing: For a successful cross-selling campaign, it's essential that complementary products are not overpriced. In fact, the prices applied should remain 25-30% below the price of the main product.
5. Too many options: In order to avoid creating a negative feeling in the customer, the number of related products to be presented to users should not exceed 5 items, at the risk of producing the opposite effect: the customer could feel disoriented or even disturbed, and thus abandon the purchase.
6. Confusing cross-selling with up-selling : The two concepts are often confused. Whereas up-selling consists in persuading the customer to select the same product but from a higher range, cross-selling always involves a different but related and complementary product to the one initially chosen.
What isupselling?
Upselling: definition and operation
Upselling is a strategy used by sellers to encourage customers to increase the average basket size. However, instead of recommending additional products as in cross-selling, up-selling invites buyers to invest in a more expensive product or a better version of the original item. For example, the salesperson in a high-tech store might offer the customer a phone model from the same range, but more recent and incorporating the latest technology. In other words, in up-selling, the customer wants to buy a basic model of the product, and the sales assistant shows him the advantages of a more advanced version of the same product.
Like cross-selling, this strategy aims to strengthen the bond with the customer by providing real added value, and to increase sales by encouraging them to spend more. The aim is to encourage consumers to increase the size of their shopping baskets, by choosing higher-value products. They will therefore spend more money, but will benefit from an improved version of the product initially chosen, with additional, more advanced features.
Upmarketing is also useful from a customer experience point of view: by suggesting a product that the customer wasn't even aware of, we personalize the customer's shopping experience, thereby increasing satisfaction and loyalty.
Advantagesof up-selling
Here are the main benefits that upselling can create.
- Highlight certain products: Moving upmarket has the advantage of being able to draw customers' attention to products they may not even have been aware of. It's a good way to highlight a whole range of products and show customers how these are likely to meet their needs.
- Increase sales: Up-selling increases sales by encouraging customers to spend more. If you offer your customers a similar but more expensive product, you increase your company's revenues.
- Increase customer satisfaction and loyalty by exceeding their expectations: A successful up-selling strategy increases customer satisfaction and loyalty. When a customer is looking for a product and the salesperson offers a similar but higher-range product, the customer's expectations will have been exceeded. In this way, the brand brings real added value to the customer, while creating a personalized experience. The result: the relationship with the customer and their trust in the brand are strengthened.
- Facilitate the customer's decision-making process : A customer who is satisfied with the brand's services will tend to buy several products from the same company, rather than comparing different offers from different brands. According to a study conducted by PYMNTS(Study: 69 Percent Of Consumers Say They Want Subscription Bundles, Pymnts, 17/12/2020, https://www.pymnts.com/subscription-commerce/2020/study-69-percent-of-consumers-say-they-want-subscription-bundles/), almost 70% of buyers prefer bundled offers. Designing all-in-one services for customers makes their lives easier and strengthens the bond of trust.
- Reduce customer disengagement : If a customer uses several products of the same brand, he's less likely to abandon it completely, whereas a customer who uses only one product is likely to disengage more easily.
Upselling: the 3 risks of an uncontrolled strategy
If not implemented correctly, the up-selling technique can lead to a number of risks and mistakes that should be avoided:
1. Deterioration of customer relations: Like cross-selling, up-marketing must be implemented in a reasoned way. In other words, the items offered to the customer must provide value. The aim is not to convince them to spend more, but rather to show them the benefits of acquiring a higher-end product (more options, etc.). Incorrect use of up-selling can give customers the impression that their expectations and needs are not really being taken into account, and that the brand's sole aim is to increase sales.
2. Customer dissatisfaction : Unlike cross-selling, up-selling involves suggesting a more expensive item than the one initially considered by the customer. When this suggestion is made too insistently, or even aggressively, it could be badly perceived by the customer. This inevitably spoils the customer experience, creating a loss of trust and a feeling of dissatisfaction, while damaging the brand's image.
3. Cart abandonment and lower sales: An overly aggressive or inappropriate up-selling action could have the opposite effect, driving customers away from their purchase, even the one they had originally intended to make.
So it's essential that the brand uses up-selling in a well-thought-out way, based on the customer's needs: suggested products must be genuinely useful and add real value.
Crossselling and up selling: the main differences
It's easy to confuse these two notions, as they are two seemingly very similar strategies. Both aim to increase sales by improving sales performance. Here are the main differences between these two marketing concepts:
- Cross-selling suggests additional products that the customer was not considering, while up-selling suggests an improved version of the original product.
- Cross-selling suggests products that customers previously had no interest in buying, while up-selling suggests products in which the customer has shown interest.
- Cross-selling can also be used post-purchase to encourage buyers to return, while up-selling consists in improving the purchase initially envisaged by suggesting a similar but higher-range product.
Cross sell and up sell strategy: some examples
There are many ways to encourage customers to add complementary products to their shopping baskets, or to opt for a similar product in a better range. Here are just a few examples.
Examples ofcross-selling strategies
- Ephemeral / temporary price cuts: A limited offer on a website or in a physical store can lead consumers to give in more quickly to their need to buy, for fear of missing out on a good deal. This strategy is widely used during Black Friday, sales, private sales or flash sales: in these cases, the temporary connotation of the discount is clearly indicated, creating a sense of urgency in the customer.
- Automatic delivery of personalized offers (marketing automation):
This involves developing a cross-selling action using digital tools, in particular automatic e-mails addressed to pre-identified customer segments. This makes it possible to design a completely personalized offer and send it directly to the customer. In order to personalize the offer, the customer's previous purchases are taken into account: in this way, the customer's expectations and needs are matched as closely as possible, and the likelihood of their finalizing the purchase is increased. Thanks to this approach, companies can increase cross-selling opportunities based on customer data, and at the same time offer customers a truly personalized shopping experience.
Examples ofup-selling strategies
- Creating a pack or product bundle: This involves grouping products or services together to create a bundle or package. This approach is interesting for customers with a limited budget who are potentially interested in purchasing a certain quantity of the same product or service. To achieve an upsell, these products are grouped together and offered at an advantageous price, e.g. a pack of batteries at €X instead of a single pack at €Y. As an accessory, the customer can also add a product to the basket that he or she was not thinking of buying in the first place, if he or she finds the price particularly attractive. Creating packages of products or services at high prices makes the price more acceptable to the customer.
- The basic or trial version VS the premium version: this approach is particularly useful for companies marketing online tools such as SaaS software: initially, the aim is to bring the customer closer to the product through a basic version of the latter. The brand then proposes a possible upgrade by offering the customer an enhanced version, more expensive, but giving access to additional and/or superior functionalities. This creates a need in the customer and increases the likelihood of conversion.
Would you like to find out how to implement cross-selling and up-selling strategies by leveraging customer data? Come and find out how Batvoice AI can help youanalyze data using AI: we'll put our expertise to work for you to help you understand your customers' needs and expectations, and respond to them in a personalized and relevant way.