Doing Up Selling and Cross Selling can give your sales a major boost. If you don’t know what we’re talking about, sit back and read this guide devoted to these two particular sales strategies.
Up Selling and Cross Selling: what they are and why they work
Up Selling and Cross Selling are techniques that make it relatively easy to increase the turnover of a store or e-Commerce site. Easy, however, it becomes for real only if you know well the meaning of Cross Selling and Up Selling and the difference between these two terms. Let’s proceed in order.
What is Up Selling?
Up Selling consists of suggesting to the customer the purchase of a product or service that is superior or more complete (and, consequently, also more expensive) than the one in which interest has been shown.
A practical example of what has just been said is represented by audio and video streaming platforms that, nowadays, are used to using Up Selling techniques, proposing packages with different services, benefits and costs and suggesting to customers the subscription of “premium” packages, with the promise of ensuring a better experience (for example, the possibility of listening to songs or watching movies or TV series without the inclusion of advertising content).
What is Cross Selling?
The technique of Cross Selling, on the other hand, is to suggest that the customer purchase products or services related to the one he or she is intending to buy, with the implicit promise that this will enable the customer to take earlier and better advantage of what he or she originally intended to buy.
A classic example of Cross Selling is batteries: many devices, such as electronic toys, work only with batteries but are often sold without them. Suggesting that the customer buy an appropriate battery pack saves him the hassle of having to look elsewhere later and gives him the opportunity to use the toy right away, thus translating into a win-win strategy.
Another typical example of Cross Selling occurs in fast food establishments: in these establishments it is now customary to propose to the customer who asks for a simple sandwich to accompany this dish with chips and a soft drink, so as to complete the taste experience. In fast food restaurants, however, Up Selling techniques also come into play: someone asking for a plain hamburger sandwich may be advised, for example, to purchase a double hamburger sandwich.
Importance of Selling Techniques for Startups
Sales techniques such as Up Selling and Cross Selling are important to the sales process because they increase the average order value of customers and build customer loyalty, since-through these strategies-you can provide more value and improve the buying experience of those who buy your products or services.
We will elaborate more on these aspects in a few lines. First, however, it is necessary to further clarify what unites and, more importantly, what divides Up Selling and Cross Selling from each other.
Key differences between Up Selling and Cross Selling
Often, even today, there tends to be far too much confusion between Up Selling and Cross Selling. Don’t fall into this mistake too, which risks irreparably undermining your sales strategies. There is a substantial difference between these two techniques that you cannot forget. You will find it below.
Objectives and approaches compared
The ultimate goal of both sales strategies is to increase the total value of the customer’s order, leveraging the (correct) principle that it is easier to complete a sale to an existing customer than one you have yet to win over.
The paths the two techniques take to achieve this goal, however, are different: in Up Selling the customer is pushed to buy a higher-end product, while in Cross Selling he is encouraged to buy related products that can help him make the most of the potential of the purchase he has previously chosen.
When to use Up Selling and when to use Cross Selling
You can take advantage of both Up Selling and Cross Selling at various times and in different ways.
Let’s start with Up Selling: you can activate this technique before, during, or after the sale. Pre-purchase Up Selling occurs when the customer selects a product and is ready to check out: at that time you can show him additional components that may entice him to complete a more onerous purchase than the one he budgeted for. You should know that, at this stage, Up Selling proves particularly effective when dealing with small products, for which the customer does not need to retrieve too much information before being convinced to proceed with the purchase.
Post-purchase Up Selling, on the other hand, should be activated between the checkout stage and the thank-you page. It has the advantage of not risking compromising the purchase the initial and relatively easily increasing the conversion rate, since customers can complete the purchase with a single click, without having to re-enter their payment information. You must be, however, careful, because this particular type of Up Selling also has cons: if you don’t personalize offers and insist too frequently on this gimmick, for example, you risk making it irrelevant or, even, annoying to your customers.
Cross Selling is also effective only if done at the right time. Following the order of the buying process, you can adopt this technique on the sales page, in the shopping cart or on the thank-you page for the purchase made, but you can also do Cross Selling through follow-up e-mail or through advertising, either on Google or on the various social platforms.
Mind you: the possibility of adopting Cross Selling at different times does not mean that you necessarily have to adopt it at each of them. The advice, in this regard, is to carry out tests so as to find out at which stage(s) this technique is able to assure you a higher conversion rate and aim, accordingly, at that one(s).
Benefits of implementing these strategies
We have previously mentioned the main advantages that Up Selling and Cross Selling are able to ensure, with the promise to return to the topic to elaborate on some aspects. Well, the time has come to do so.
Increased Average Order Value
The main benefit of implementing strategies such as Up Selling and Cross Selling lies in their ability to increase Average Order Value (AOV), which is the average amount each customer spends in the store or on the e-Commerce site, a metric of crucial importance to a company’s business model. As mentioned, this average value can be increased by pushing the customer to buy more products than budgeted or only one product, but more expensive.
Improving customer satisfaction and loyalty
Up Selling and Cross Selling also help you to improve buyer satisfaction and customer loyalty, since thanks to your buying advice he can identify the right product for him and/or buy everything he needs to be able to use the product he originally chose immediately and to the best advantage.
Optimization of marketing and sales resources
Skillful use of Up Selling and Cross Selling also has another benefit that, so far, we have not discussed: these two techniques help you make better use of the resources you have, promoting products or services that are underutilized and thus bringing obvious benefits in terms of inventory turnover and overall efficiency.
How to Implement Up Selling and Cross Selling in Your Startup
This is it: it’s time to move from theory to practice and understand, in essence, how you can implement Up Selling and Cross Selling techniques in your startup. Remember these words of Michael Porter:
“The real essence of strategy is to choose to do business differently than your rivals.”
Analyzing customer behavior and preferences
Personalizing offers to be submitted in Up Selling and Cross Selling modes is critical, but to be able to do this effectively, you must first conduct an analysis of customer behavior and preferences and then adopt a data-driven approach. It is only by analyzing the information and numbers, in fact, that you can figure out with a good margin of accuracy which customers are best suited to receive your shopping recommendations and, more importantly, what to recommend to them based on the specific needs and desires revealed by your analysis.
Developing personalized offers
You will not be surprised to learn that, according to a survey conducted by Deloitte, 8 out of 10 consumers prefer to buy from brands that offer them personalized experiences. Similarly, Up Selling and Cross Selling techniques also prove more effective if they are built around customers’ preferences and in the wake of what they already buy.
Training the sales team on new techniques
There is another aspect that you have to take care of if you want to successfully implement Up Selling and Cross Selling techniques: you have to make sure that your sales team is aligned on the objectives, the timing (which, as we have seen, must be chosen carefully and after a series of tests) and the way these particular strategies are implemented.
Mistakes, in fact, are always lurking and risk not only undermining the ability to take advantage of Up Selling and Cross Selling, but also irreparably and permanently driving customers away. We will see what these mistakes are in more detail in a few lines.
Using technological tools to automate the process
Remember that technological tools are your valuable allies: email marketing, for example, helps you maintain a channel of communication with customers even after the purchase (thus making sure that they do not forget about your brand) and increase customer retention. Through this tool-among other things-you can share valuable content, special discounts, and personalized offers based on their preferences and past purchases.
Artificial Intelligence can also help you: you’ll find it useful to know that there are AI tools, such as Amazon Web Services (AWS), that analyze data and automate the process, providing companies with the same system that Amazon uses to recommend related products to users browsing its site.
Common mistakes to avoid when applying these strategies
There are three main mistakes generally made by those adopting Up Selling and Cross Selling techniques. Let’s look at them together, one by one.
Proposing irrelevant products or services
The most glaring mistake you absolutely must not make is to propose the same purchases to all customers or, more generally, to suggest irrelevant products and services. All this would risk creating confusion and, not only would it not allow you to successfully complete the Up Selling or Cross Selling process, but it would also make your brand lose credibility, with negative consequences on sales even in the medium to long term.
As already extensively emphasized, Up Selling and Cross Selling must take off from the specific preferences and needs of customers and ensure a tangible advantage over the “simple” purchase they budgeted for.
Being too aggressive in proposals
Another mistake to avoid is to push too aggressively with Up Selling and Cross Selling techniques. Remember that purchases should be suggested, not imposed, because the priority is to respect the customer’s personal needs and choices, without trying to “force” him to buy something he does not actually want.
Equally wrong is to be too aggressive in your choice of products or services to suggest: a good tip in this regard is to avoid up sell or cross sell with products that increase the overall value of the order by more than 25 percent, because you risk an announced flop.
Do not monitor and analyze the results of strategies
Last, but certainly not least, is another mistake you need to stay well clear of: not monitoring and analyzing the results of your Up Selling and Cross Selling strategies risks thwarting all your efforts in this regard, not allowing you to optimize them based on your customers’ responses and conversions generated (or not generated).
Integrating Up Selling and Cross Selling for Startup Growth
Having reached this point, it should be clear to you by now, but it bears repeating: integrating Up Selling and Cross Selling techniques into your startup’s sales strategy can propel its growth dramatically on a number of fronts, from “simply” increasing the average value of orders to increasing the loyalty of your customers, through increased visibility given to your products or services.
Do you want to read all the articles related to the stage your startup is in?
