Introduction
Did you know that the chances of selling to an existing customer are 60-70 percent, while the possibility of selling to a new client is 5-20 percent? Statistics also show that 80 percent of the organization’s future profits originate from only 20 percent of the existing customers.
These findings indicate that attracting new clients is a challenging task. As a business owner, you are always in competition for the market with other more established players, yet the number of new entrants keeps rising. One of the best marketing approaches to keep up and retain your market share is by upselling and cross selling.
In this article, you will learn about all the important aspects of upselling and cross selling. You will also get ideas on the best ways to apply the two concepts in your business for improved sales, customer attraction, and retention.
What is cross selling?
Cross selling is a sales approach where you get your customers to buy more of a related product or service. As a business owner, you want to entice your shoppers to spend more.
Imagine instances when clients go through your product catalogue, but cannot find what they are searching for. This is the time when the cross selling meaning comes into play.
The best tactic to apply is to suggest additional items to a customer already committed to making a purchase. You can make more sales by suggesting related, additional, or complementary products, tactics that we will discuss later in the article.
The difference between cross selling and upselling
The upselling meaning differs from cross selling in that the former refers to a sales technique where the seller persuades consumers to buy a more expensive, premium, or upgraded product.
Unlike in cross selling where the goal is to sell additional commodities from related items in your catalogue, upselling entails encouraging buyers to acquire higher-end versions. Other upselling techniques involve selling extra features for the same product.
How would you differentiate between upselling and cross selling methodologies in an eCommerce setting?
Let’s take it that your customer is buying fries, you could suggest a complementary or related product, such as a burger. If you are selling computers, you could cross sell mouses to accompany them.
If you are selling softwares, such as antivirus, you could upsell upgraded versions with more protection or other better features. If you are running a restaurant, you can upsell by asking customers if they want super sizes for their meals or beverages.
What are the examples of cross selling?
Businesses, including top-notch eCommerce retailers, are increasingly adopting cross selling tactics to increase their sales revenues.
To avoid upsetting your customers with irrelevant offers, you should ensure that you’re promoting the right items at the right time. To get it right, market commodities that are compatible with what the customer is shopping.
Some common ideas to cross selling could be:
- Suggesting pillow covers to a customer buying a pillow set
- Showing HDMI cables to purchase with a HD ready DVD player
Examples of leading retailers using the cross selling approach include:
The company’s product pages feature items bought by other people.
For instance, if you are buying a fitness tracker, you will find a section named “Frequently bought together” or “Customers who viewed this item also bought” (Amazon.com).
These tactics help to validate the customer’s decision to buy items bought by others. They also show the best way you can use customer data to improve the accuracy of product suggestions.
You can use customer data to establish cross selling opportunities, and use a language that makes customers feel that their purchase decision is sensible as others share it.
This retailer cross sells high-quality cosmetic products, such as body washes and shampoos. They stand out by promoting items, which are already selling and getting outstanding reviews.
Lushies Product Page – Image Credit: Lushusa.com
This cross selling tactic works best when you use a brand-specific language, such as “Lushies are loving these right now” (lush.com). The goal is to target buyers with the fear of missing out (FOMO).
What are the examples of upselling?
If you’re upselling, it is because you want to entice a customer to buy a more expensive product, to upgrade to a higher version of an existing product, or to purchase other add-ons.
But how do you do this without scaring your valuable customers away? Let’s have a look at a few leading retailers employing this approach effectively:
This prolific domain name seller employs upselling tactics as you buy the domain from them.
For instance, if I wanted to register a domain starting with “grabb,” I would not be able to because the name is already taken by grabb.co.uk. However, GoDaddy upsells by proposing the domain broker service.
They could contact the owner of the taken domain and negotiate a price. I would pay a 20% commission if the owner was ready to sell.
GoDaddy Domain Registration Page – Image Credit: uk.godaddy.com
GoDaddy Domain Broker Service – Image Credit: uk.godaddy.com
Other upselling strategies employed by GoDaddy include custom-made business email addresses affiliated to your domain.
These tactics work because they are affordable, necessary, and convenient. The domain seller has all the essential packages, giving customers a variety of services to choose from. They’re forced to stick around for a while before moving to a competitor site.
This retailer’s strategy is the epitome of upselling. In addition to them featuring all types of flowers by categories, they upsell by offering customers to join the ProGifter Club.
This package allows members to schedule flowers to any addresses up to one year in advance. For $99, customers enjoy quick checkout, free shipping, and free glass vases, which would otherwise cost $70.
ProFlowers Product Page – Image Credit: proflowers.com
This upselling tactic gains the business a loyal clientele and guaranteed sales for a specified period.
The customers keep coming back as the service helps them to save money and to remember their loved one’s birthdays and anniversaries. The upselling strategy also helps clients celebrate important occasions like family birthdays, graduations, and weddings.
Cross selling strategies
How can you cross sell your products to new and existing customers?
The first step should be to identify complementary items for which you can create related offers.
The second step should be to test the timing and positioning of your product offers to ensure you’re making the maximum sales.
The third and most common practice is to apply cross selling strategies on your website’s product pages. You could target customers as they checkout or by sending follow-up email campaigns.
Keep track of abandoned carts and send automated emails reminding the shoppers who left their carts to return to your website to complete the purchase.
Other frequently utilized cross selling strategies include:
Promotions Brochure – Image Credit: freepik.com
- Bundling
You can package goods or services that go naturally together.
If you’re selling clothes, you can accompany them with accessories like belts, bracelets, necklaces, etc. You can maximize your store sales by letting customers understand that they need all these other items for the proper use or appearance of the initial purchase.
Capture more of your customers’ attention by offering package discounts to your bundle promotions.
- Visual Aids
Use short videos or how-to guides to demonstrate how the additional products work well alongside the product your customer is buying.
This approach is particularly useful in the lifestyle and fashion industries because the target customers are driven primarily by visual cues.
When you show how the product looks and functions in real life, you empower the customer, prompting them to buy the entire package, instead of purchasing a single unit.
- Use past experiences
This cross selling strategy is commonplace and easy as it entails sending recommendations to your customers based on their shopping history and interests.
You can send emails, app notifications, or list products similar to what they have bought before.
The “related purchases” feature is also a super effective approach for converting your site visitors. Use a persuasive language, such as “Hey, we thought this too might interest you. Customers who bought ABC also bought XYZ.”
- Loyalty rewards
Loyalty points are so appealing that they not only gratify the customer, but they may also prompt the shopper to buy more of your products.
You could implement this approach by adding points to your customers’ e-wallets, which they can convert into cash for future purchases.
Many businesses, including airlines, are using this cross selling strategy to encourage customers to continue using their services to earn free services.
- Gather customer feedback
Did you know that the number 1 most common way of gaining new leads is referrals?
According to a report by PayFort, when you engage your customers to understand what drives their behavior, you increase the frequency of them buying your products by about 90%. Highly-engaged customers also spend 60% more per purchase.
Invest in knowing your audience. You can do so through surveys or user data to understand your customers’ goals and challenges.
You will be pleased with how this approach enables your business to identify the most useful products to cross sell to your customers.
Upselling best practices
When upselling, you are going deeper into your customers’ pockets and space – they will have to accommodate additional products or services.
You do not want a customer wondering if the existing version was overpriced or is substandard.
To successfully add new commodities to your clients’ portfolio, you should apply these upselling best practices:
- Provide the maximum value
Demonstrate to the customer the best value for their money. Showcase the product features to the buyer, allowing them to see the bigger picture.
Let the customer see that the sticker price is nothing compared to the additional benefits in reliability, convenience, wear and tear, and depreciation, among other features.
- Listen for cues and respond appropriately
Rather than push a product to the customer with little concern on how it will help them, it is better to identify the need to be filled.
Let your recommended products and services be relevant to the needs of your customers. For instance, if I am buying a computer for my child, it would be inappropriate to upsell business software. Doing this shows that the seller is only interested in my money, not my results.
Instead, listen and look out for what is being said, what is not being said, and opportunities to serve.
When you use this upselling best practice to understand a user’s search query or complaint, you are more likely to identify and sell a product or service that would suit their needs or solve their problem.
- Timing and context
Assess when is the appropriate time to adopt the upselling practices.
A report by Segment indicates that 40% of customers buy something more expensive than they originally wanted to once they have experienced personalized customer service.
When you gain the customer’s trust and have settled the issue they contacted you about, you can jump in to upsell your products.
Conclusion
Upselling and cross selling are related terms that marketers use to improve their customer engagement and product sales.
While upselling entails selling more expensive, advanced versions of the original product, cross selling involves promoting related products, which are complementary to the item being bought.
As a marketer, all you need is a Grabb Ai tool to help you to assess your customer behavior to understand the right time and the right products to upsell and cross sell.
Our standard system will analyse data about your company’s clientèle and provide key recommendations on what other products you can sell to your existing customers.
Curious to learn more about how Grabb Ai can help you to boost your business selling strategies, Just let us know, we’re more than happy to help.
