Cross-selling entails targeting existing customers to sell them additional products or services. On the other hand, upselling is the technique of offering customers more expensive or upgraded versions of existing products.

Both upselling and cross-selling are sales tactics that can improve customers’ shopping experience and business revenues when you execute them appropriately.

These techniques are both practical and easy for the overall revenue growth of your business. You are more likely to sell to an existing customer by 60-70%, but the likelihood of selling to a new client stands at only 5-20%. 

These and other factors are the reasons you should keep upselling and cross-selling on the list of your top marketing strategies.

In this article, we will dive into the benefits of upselling and cross-selling for B2B or B2C companies. We will also look at some cases of real-world implementations.

Why upselling and cross-selling are important?

Sales techniques don’t always have to feel as if they’re invading the customer’s space. If done right, they should not invoke negative feelings in the target audience. Instead, they can improve customer engagement and business sales and growth. 

Online retailers are consistently using upselling and cross-selling tactics for several reasons:

Immediate benefit: business growth

Business Growth – Image Credit:

According to a report by ashwebstudio, upselling can drive sales by over 4%, while cross-selling can add up to 0.2% to your revenues. Research by PredictiveIntent also indicates that cross-selling can be low when done on the product pages, but can increase sales by 3% when presented on checkout pages.

While these figures may not appeal to every marketer, many online retailers consider these margins a big improvement in the revenue position.

Effective upselling and cross-selling holds the following benefits for your business’ growth:

  • Improves order volumes
  • Increases conversion rates
  • Offers flexibility and convenience to your customers
  • Promotes innovation – the ability to experiment with new products and services
  • Exposes the best-sellers and affordable products with high margins
  • Easier to sell slow-moving products
  • Enhances differentiation and market position

To reap from the full benefits of upselling and cross-selling, your business should offer products and services that customers actually want.

This approach gives the perception that your company has taken time to understand the customer’s needs and wants, hence, improved conversion rates and profitability.

Strategic benefits

Online shopper – Image Credit:

The benefits of upselling and cross-selling can vary across business settings. The two tactics form the core component of a customer-focused sales strategy whether your company sells products and services to other businesses (B2B) or directly to customers (B2C).

Your ability to combine different sales techniques will create a big difference in performance between your company and the competition over time.

The reason lies in the following benefits of upselling and cross-selling:

  • Improves return on investment (ROI)

Upselling and cross-selling allow you to gain profits more quickly, compared to signing on new customers. 

When you sell suitable products and services to existing customers, you increase returns because this target clientele no longer incurs acquisition costs (lower cost of sales).

  • Enhances customer satisfaction 

Customers can find and buy appropriate products and services conveniently through rapid one-stop shopping.

When you visit a page, such as Amazon, you find all product categories, including automobiles, beauty, and personal care, books, etc. Before selecting a category, the retailer features the “best sellers” or “most wished for” in each, helping customers to buy the most appropriate products for all their needs.

Amazon products page – Image Credit:
  • Broadens the range of product offering

You get to recommend complementary or additional products to buyers, shortening your inventory conversion period.

  • Discourages churn and enhances customer experience and loyalty

If your upselling and cross-selling tactics focus on value-adds, such as premiums, upgrades, and additional high-value features, you can make customers feel that they are gaining more from the deal.  The customer will be happy to be associated with your business for the long-term.

  • Improved customer lifetime value (CLV)

CLV is a measure of how much net profit your business can generate from one customer within a given period. 

Your business should focus on the old wisdom that holding onto your existing customers generates more value than acquiring new ones – it is cheaper this way and is also a great source of referrals.

Customer lifetime value
Customer lifetime value

But what does the CLV have to do with upselling and cross-selling?

We saw previously that appropriate upselling and cross-selling increase customer loyalty, purchases, all the while reducing customer acquisition costs.  Intuitively, we see that this combination can greatly boost CLV. Here is an example of CLV calculation:

For instance, if you sold software to customer A for $99 per month.

Customer A’s annual revenue = $99*12 = $1,188

Customer relationship with your company = 5 years

5-year revenue = $1188*5 = $5,940

Cost of acquisition = $40

Cost of service = $40*5 years = $200

Total costs = $200+40 = $240

CLV for customer A = $5,940 – 240 = $5,700

Upselling and cross-selling are the best approaches to turn your shoppers into very profitable customers due to its effect on CLV.

Improved customer loyalty is linked to customer satisfaction, a factor that can help reduce the costs of customer churn. Invest in happy customers, and you will not have to worry about lost sales.

Insights from case studies

Charts and tables – Image Credit:

What insights can we draw from companies that have applied upselling and cross-selling practices in their sales models?

Let’s have a look at results derived from real-life practices.

  • Bain & Company: Bank Case Study

This case study of Bain, a leading global consulting firm, affirms the importance of using cross-selling strategies in your business.

Bain’s project aimed to improve the level of cross-selling interactions among existing customers and to enhance every customer’s spending on a leading bank’s services. The analysis revealed that cross-selling a new product would increase the individual customer spend and profitability significantly. 

Bain’s findings on av. spend & profitability – Image Credit:

Before the launch of the cross-selling practice, the average customer spends over 6 months was $17.2k. After implementing the campaign, the total spend on the old and the new product was approximately $19.1k. This change marked an 11.05% overall increase in customer spend. The average profit per customer rose by 19.64%.

These results can be replicated in any business setting. If you were to adopt appropriate upselling and cross-selling practices, you should expect similar performance. However, the exact level of increment in customer spend and profitability may vary depending on your timing and approach.

  • Bain & Company: Highly focused segmentation

In another case, Bain suggests that companies using upselling and cross-selling strategies should know their most profitable customer segments. 

They should also understand how these customers’ behaviors have changed over time and their preferred products and channels.   Businesses should then observe how they fare against the competition in every area and calculate the real economic value per segment. 

The first objective is to develop well-defined high-value customer growth goals, which will enable the business to create tailored and targeted sales strategies that will be profitable.  Focus is of key importance!

To demonstrate this scenario, Bain uses the case of a large US telecom company, which wanted to enhance the value of its existing client base. The company’s cross-selling tactics targeted high-potential customers, who have demonstrated a high level of product engagement, as they were very likely to upgrade.

The practice yielded positive results because the telecom company’s cross-sales increased threefold. The company also learned which elements customers responded to best.

Discrete customer goals produce more cross-selling results in a variety of campaigns – Image Credit:

The approach, as seen in the above figure, shows that the consumer products bundling approach had a 5-point response rate compared to standard sales campaigns. 

You can bundle products by adding complementary items in your promotions. By doing so, you can offer these items at discounted prices to raise the customer’s perception of the value of buying multiple products/services at once. 

When implementing this approach, remember to leverage user data to identify and understand your high-value customers and their needs. When executed well, upselling and cross-selling can help improve your sales revenues.

  • BMW: Giving a self-service tool for clients to play with upsell options

Did you know that you can use predictive analytics to determine profitable customers, estimate performances, and understand the market no matter your industry? 

ECommerce stores are increasingly using algorithms to predict consumer behavior, including regression models, market basket analysis, clustering, and deep neural networks

BMW Group applies predictive analytics on its website, where customers are allowed to build the car they would like to buy. As an upselling tactic, customers can change wheels, seats, etc. at an extra cost. They get to design and see how their desired output will look in real-time. 

 BMW’s upselling tactic
BMW’s upselling tactic – Image Credit:

With analytics in place, BMW can now model future cars the customer might be interested in using his/her previous online designs. 

How can your business take advantage of these tactics in its upselling and cross-selling strategy?

You can collect data, then use clustering algorithms to automatically group customers into segments who display particular activities and traits.  When presented with an offer, these customers are likely to behave in the same manner. You can then design promotions targeting these shoppers.

  • Amazon: The king of upselling and cross-selling

Amazon has been implementing upselling and cross-selling practices for years. Even in 2006, the company already reported that 35% of their annual sales originated from implementing strategies, such as “Frequently bought together” and “Customers who bought this item also bought.” 

Every Amazon product page has high-converting marketing tactics, which contribute to the company’s high revenues. The Amazon Prime membership, which is the result of upselling, currently comprises 150 million subscribers, a 50% increase from 100 million in 2018.  Members enjoy faster and free two-day shipping, video and music shipping, and other benefits.

In a survey conducted in 2019, 20 percent of Amazon Prime members reported that they buy items on Amazon a few times every week. 7 percent said that they shop almost daily. Talk of the power of an engaged clientele!

Your business can also benefit from upselling and cross-selling by implementing these premium members programs, which will be attractive to your most engaged and loyal customers. 

An additional benefit of these programs, is that you are guaranteed of revenues for a given period, usually one year. These customers are more likely to buy complementary products and upgraded versions, and less likely to buy from competitors, because of the discounted pricing.


Upselling and cross-selling strategies are good for customer attraction, conversion rates, and overall business growth.

Statistics by Amazon, BMW, and banks show that these sales practices yield higher customer spend and profitability. As a B2B or B2C company, you can also benefit from implementing upselling and cross-selling tactics in your online or traditional business. 

Automated tools for upselling and cross-selling are normally thought of as the purview of online stores but new technologies are now being made available for in-person selling also.

As a starting point, you should consider using the Grabb Ai to help you automatically segment your clientele, assess their behavior, and obtain recommendations on the suggested actions to take, including what other products you can sell to your existing customers.

Curious to learn more about how Grabb Ai can help you boost your data analytics, customer experience, and business growth? Just let us know, we’re more than happy to help.

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