The consumer’s purchase journey doesn’t end once they have bought from your store but begins at that point. Businesses can employ varying strategies, such as upselling and cross-selling, to help build a robust customer base. We aim to explore upselling vs. cross-selling strategies and which suits your business.
What is Cross-Selling?
Simply put, cross-selling is purchasing anything alongside the main product. This technique is an excellent way for companies to make money. If the primary product, such as a phone, is being sold, a brand may also recommend buying a phone cover. This is the perfect example of cross-selling.
Sales professionals can use cross-selling to offer discounts and promotions. This helps them acquire prospective customers. It helps turn them into loyal customers, making repeat purchases. When an item is being offered at a discounted price, customers are more than likely to purchase it.
What is Upselling?
Up-selling encourages the purchase of a premium version of the same product. This adds value to the consumer’s overall buying experience. It can range from anything between getting an upgrade to opting for a value-added option.
When upselling, you are offering medial products that are upgraded versions of the item a customer has agreed to buy. This strategy can be effectively implemented if a brand understands the needs and goals of its target audience.
Use Cases Cross Selling
Customers are primarily interested in what they can gain from a product. Giving people a reason to care is vital to effectively market your product. Kajabi, a course-building platform, demonstrates cross-selling in an email promoting its podcasting feature.
It emphasizes the benefits of podcasts. You can use a subject line that appeals to business priorities: leads, growth, and revenue. By stating that over half the population of the United States already listens to podcasts, Kajabi communicates the podcast’s potential to those who may be unfamiliar with them.
The email then provides specific ways Kajabi’s podcast feature can be used to grow a business.
Here are some benefits of using Kajabi’s podcasting feature:
- It assists in lead generation.
- You can monetize your podcast.
- It helps distribute your podcast.
- You can import existing podcasts to Kajabi.
Instead of merely presenting a list of its features, Kajabi demonstrates what readers can accomplish using the platform.
Kajabi concludes the campaign with some comforting words. Podcasting is a supplementary feature to your current offerings, reducing the risk level. When a new product fits seamlessly with your existing marketing, taking a chance on it is easier.
InVision utilizes a powerful human characteristic, social proof, which is used to promote its Freehand tool. It is meant ideally for users who are interested in remote collaboration. Social proof is the tendency of individuals to imitate the behavior of others.
For instance, when a friend recommends a show on Netflix, you are more likely to give it a chance. InVision begins its promotional campaign by highlighting what Freehand can do for its users.
The distinctive selling proposition of “InVision Freehand” is that it enables you to collaborate in real-time with every member of your team virtually. This proposition effectively conveys how the tool simplifies the process of collaboration.
InVision’s campaign offers links to various case studies, one demonstrating how the in-house team at the company utilizes the tool and another showcasing the advantages of using the tool at Home Depot.
User reviews are considered trustworthy since they come from individuals who have firsthand experience with the product or service. The inclusion of Home Depot’s case study alongside InVision’s use study enhances the credibility of Freehand.
The promotional campaign also contains helpful tips and collaboration tools that demonstrate how Freehand can fit into existing workflows.
When it comes to personalization, don’t limit it to existing customers and those whose data you have. It’s crucial to make a good impression right from the first touchpoint. Retailer Target sets a great example by employing various cross-selling strategies.
On their landing pages, they utilize the available space to showcase related products that complement the primary product. The retailer uses data analytics to predict one’s preferences based on other customers who purchased the same product.
Moreover, Target understands that if someone buys a piece of furniture, they are more likely to look for accessories. Similar to Amazon, Target employs a “Frequently Bought Together” section. It displays items that other customers have bought. This section includes an option to add items to the cart with a single click. It includes the ability to quickly remove unwanted items.
Implementing various cross-selling techniques for products that complement the main item is essential, even on product landing pages for first-time visitors. Target is a great example of this as they show related products that other customers have purchased. Although not all items were relevant, some caught the customer’s attention and validated Target’s approach.
It is recommended to use curated collections that complement the main item and allow the customer’s impulses to take over when adding items to their purchase. Research has shown that impulse buying accounts for a significant percentage of sales.
B2B buyers interact with a plethora of vendors before making a purchase decision. Most of these interactions are self-guided and come from sources like social media.
It’s important to show up where your target audience is searching for information to close sales. Retargeting can help achieve this by following potential customers during their online journey and encouraging them to revisit your website.
For instance, if someone leaves your site because they couldn’t find the exact product they were looking for, offer them a similar item. When they return, you may persuade them to make a purchase. This can then open up additional opportunities for cross-selling. HubSpot utilizes Facebook ads to show relevant lead magnets to individuals who have recently visited their site.
Retargeting ads are shown to people who are already familiar with the brand. Using the word “Free” becomes less risky and more enticing. It removes the cost and requirement of sharing credit card information. Additionally, the offer of free templates helps customers solve a problem. It provides easy-to-use templates compatible with its existing software.
Upon clicking through to the landing page, users are presented with the potential outcomes they can achieve with the templates. HubSpot takes a proactive approach to alleviate potential concerns and build trust by answering common questions. It showcases social proof to encourage conversions.
Use Cases Upselling
Dollar Shave Club
Dollar Shave Club has broadened its range of products, attracting new customers to subscribe for a package. It contains both shaving and grooming items. Although, customers have the option to remove products from subsequent boxes. However, customers can still opt to receive only blades. The company strategically lists its most expensive option first. This is closely followed by less desirable, lower-priced options. They are displayed further down the page.
The brand uses more appealing names for their high-end razors, such as “The Executive,” while their budget-friendly option, the “Humble Twin,”. This makes the comparison easy for prospective customers. Dollar Shave Club makes use of user experience and design techniques to nudge customers towards purchasing the pricier option.
Florist websites differ from other retail sites in that customers are often shopping for someone else for them, making a positive impression all the more important. To capitalize on this, brands like Pro Flowers employ aggressive upselling techniques. They offer customers a choice of four bouquet sizes.
The site cleverly pre-selects the second-lowest price option, which immediately increases the likelihood of upselling. Setting the cheapest option as the default would risk customers opting for the second-highest instead of the third.
This approach reduces the chance of a downgrade. Additionally, the brand employs effective cross-selling strategies at checkout. This encourages customers to add extras such as greeting cards to boost the total cost of the purchase.
Away Travel employs a subtle upselling approach on its product pages.
For example, it presents customers with the option to upgrade to the following:
- A more spacious and versatile carry-on.
- It promotes an expandable version of the suitcase.
By doing so, the individual’s interest is naturally drawn to pricier options while being informed about the added benefits. Away Travel also uses a side-by-side comparison to showcase the advantages of the larger case.
Moreover, the company offers customers the opportunity to personalize their purchases for an additional cost. It’s a reasonable price for customers who are already investing in a high-priced item.
Airlines are infamous for utilizing upselling techniques. Some resort to questionable tactics to inflate costs. However, most reputable and well-established airlines are transparent, allowing customers to purchase additional services for added convenience.
A prime example is seat selection, which offers clear benefits in return, such as avoiding a middle seat. Although not every passenger may care about where they sit, but some do. This makes it an effective upselling tactic for airlines like Easyjet.
Cross Selling: Best Practices
Following are some of the best practices for cross-selling:
Track Purchasing Behavior
Cross-selling strategies tend to be more effective in converting customers because they suggest additional products. Recommendations are based on the items they have already purchased or shown interest in. Businesses can offer relevant recommendations and tailored offers by analyzing a customer’s preferences and previous purchases.
To gain a comprehensive understanding of a customer’s purchasing behavior, it’s important to track their buying patterns.
This can happen across various channels and devices, such as the following:
- Desktop App
- Mobile App
This customer data enables businesses to answer key questions.
Businesses can ask themselves the following questions:
- Which products are often bought together?
- What products do customers tend to consider when making a purchase?
- Which products do customers frequently come back for?
- At what point in the customer journey do customers add products to their cart?
A business should have a clear understanding of its customer’s preferences. It can offer personalized product recommendations at the appropriate time. This helps add value to the customer journey and increases conversion chances.
By utilizing customer segmentation, businesses can identify groups of individuals with similar buying patterns. It helps suggest complementary products to increase sales. Let’s take Rugs.com as an example. They segment their customers based on previous purchases. The brand then creates a personalized campaign that recommends products in varying sizes.
Numerous models for customer segmentation exist, and the most effective method for a particular brand or industry will depend on various factors. It includes value-based segmentation, which can identify which audience segment has the potential to yield the greatest ROI. You should choose the right approach to customer segmentation. It can offer significant benefits such as improvement in cost per conversion rate.
Send Auto-Triggered Messages
To keep customers engaged with your brand, automated follow-up messages can provide a gentle nudge. It suggests complementary products. You should wait until customers have shown clear signs of wanting to make a purchase, such as adding an item to their cart. Brands should identify the best cross-selling opportunities in the customer journey. This allows you to set up marketing automation workflows.
For instance, you can trigger an automated popup message suggesting similar items every time someone adds a product to their cart. The popups can help skyrocket your brand’s conversion rate. It helps engage already interested customers. Additionally, cart abandonment emails offer another great way to recommend additional products based on customers’ buying history.
Introduce Limited Time Offers
To encourage customers to buy more products and avoid missing out, a limited-time offer can create a sense of urgency. One example of such a technique is offering temporary discounts.
For instance, if a customer adds sunscreen to their cart, you can offer them a discount on a sun hat that expires in a few hours. Another way to create that sense of urgency is to add a countdown to your promotional messages.
Limited-time offers can be an effective way to introduce new products or promote existing ones. By offering a discount or other incentive for a limited time, you can encourage customers to try these products allowing them to become your repeat customers.
Such offers can help to build customer loyalty and satisfaction. Customers may feel special and appreciated when they are offered exclusive deals or discounts. However, it is only available for a short period of time. This can increase their trust in your brand and encourage them to return in the future.
Upselling: Best Practices
Following are the best practices for upselling:
In the present day, many online customers conduct research prior to making a purchase.
They compare the following elements:
The aspects listed above allow individuals to make informed decisions. Businesses can take advantage of this process by incorporating it into an upselling strategy.
One effective tactic is to display multiple products at once. This approach is commonly found on (SaaS) product pricing pages. But can also be applied to e-commerce. Show customers similar upsell products and highlight their primary feature differences. It enables businesses to streamline the buying process. This helps prevent customers from having to navigate through multiple pages. For those using e-commerce solutions such as Shopify, upsell apps can be a useful tool to consider.
Showcasing new and improved products with a higher value can catch a customer’s attention, but it’s not always enough to encourage them to make an upsell purchase. Since they’ve already invested time into selecting their desired item, an additional incentive may be necessary to motivate them to take the plunge.
When a customer is on the checkout screen, it presents a prime opportunity to upsell. As they’ve already made the decision to purchase something, they’re in a buying mindset. To persuade them to increase their spending, a special offer can be just the push they need.
Use Customer Feedback Score Wisely
You can use the assistance of Net Promoter Score to acquire customer feedback. Your brand’s loyal customers are likely to share feedback through various channels. This helps your interaction with them. Therefore, being proactive and examining how customers engage with the business offerings is important. NPS scores can be a valuable tool for collecting meaningful feedback and identifying what matters most to your customers and product users.
You can also conduct Quarterly Business Reviews. It helps provide a foundation for understanding what your customers are satisfied with. This also helps you identify any gaps before you scale your operations. As you conduct these reviews with your customers, they may offer additional feedback giving you valuable insights. This allows marketers to save time and money.
Asking the right questions is key. It’s important to have a good understanding of your business growth and needs to facilitate genuine upsell conversations. Ultimately, you’re not just pitching another offering as a salesperson. But acting as an advocate for your customers. It allows business owners to thrive and achieve more by leveraging your services at scale.
Offer Solutions to Customer Issues
New use cases can create upsell opportunities for your customers. Providing different use cases can inspire them to leverage your offerings in new ways. Your customers are investing in your company’s expertise in the field.
As a product expert, you can build recommendations for your customers based on use cases you have seen in different industries. This establishes you as a domain expert and motivates your customers to beat the competition.
If you don’t have any recommendations, do your homework and research your customer’s offerings to find potential use cases. By asking the right questions, you can show your customers that you care about their business and get insights to nurture them into upselling.
When Not to Cross-Sell
Businesses should avoid cross-selling in cases where it is not in the best interest of the customer or when the customer is unprofitable.
Here are some aspects that make customers unprofitable:
- If the customer has a low budget, they are not likely to make additional purchases.
- If the customer has a history of being unprofitable due to excessive returns.
- If the customer has a high demand for service attention.
Additionally, businesses should be cautious about cross-selling during sensitive or emotional moments. This includes times when customers are upset or experiencing a difficult situation. It may come across as insincere or opportunistic.
When Not to Upsell
You should avoid upselling in the following situation:
- When the upsell would compromise the customer’s trust.
- When the customer is making a simple or routine purchase.
- When the upsell doesn’t provide additional value.
- When the customer is already struggling financially.
Upselling Vs. Cross-selling?
There is no definitive answer to whether upselling or cross-selling is better. Both strategies have their own advantages and can be effective in different situations. Upselling involves persuading a customer to purchase an expensive version of the item they are already buying. On the other hand, cross-selling involves recommending related products to buyers. Ultimately, the best strategy depends on the specific situation and the business’s goals. Both upselling and cross-selling can be effective when done appropriately. But it’s important to make sure that the customer’s needs are always the top priority.
Featured Image: Justin