What are Cross-selling and Upselling?

Cross-selling is the process in which a company increases order value by persuading the customer to buy a similar product to what they are already purchasing.
Upselling is along the same lines, except the related product is more valuable and therefore more persuasion could be necessary to convince your buyer.

An example of cross-selling would be suggesting phone accessories to a customer who has a mobile phone in their online cart. Upselling would include suggesting a newer version of that phone as an upgrade.

Why is Cross-selling so Important?

Cross-selling is a fantastic way to significantly boost customer satisfaction. Predicting your customer’s needs and offering them a solution haven’t considered before is a unique business superpower. A Salesforce study suggests that harnessing this into a personalised buying experience increases customer loyalty by up to 63%.

Cross-selling estimates what customers are most likely to buy and suggests related items, often in the same price range as an added incentive to purchase. By doing this, you can maximise your order value and strengthen your relationships with your customers at the same time.

Why is Upselling so Important?

Upselling is a straightforward way to generate profits and keep customers coming back. Showing buyers an upgrade that boasts higher quality than competitors and can provide additional features is bound to increase your CLTV (Customer Lifetime Value). 

By offering a premium item to customers, you can assist them in getting the best deal possible. This increases customer loyalty, satisfaction, and maximises the likelihood of buyers returning.

Best Practices:

1. Identify your ‘Champion’ customers

Champion customers are buyers that consistently purchase from you over a long period of time. Analysing what your ‘Champions’ purchasing patterns are and using that as a guide of what is being bought together often can increase customer satisfaction. 

2. Use reporting

Having plenty of customer analysis at your disposal isn’t a bad thing. In fact, it can be paramount to understanding your existing customers and building an ICP (Ideal Customer Profile). 

For example, monitoring the number of successful upsell and cross-sell sales that take place as well as overall change in average purchase value can give you a handy idea of what’s working in your business.

3. Build customer profiles

Building detailed profiles for each of your customers can create new cross-selling and upselling opportunities that broaden your target audience. Segmenting your customers into distinct categories allows you to send each group unique marketing campaigns.

The more you know about your customers, the more you can foster a relationship with them that will last. The 2020 LinkedIn ‘State of Sales’ Report states, that customers are 47% more likely to consider a company that provides personalised communication. 

4. Suggest related products

Upselling and cross-selling don’t necessarily need to be completed during a purchase – you can suggest items before a purchase has even been made. Listing ‘bundles’ or exclusive offers on related items to add genuine value to a customer’s purchase.

Even after a purchase is complete there’s ample opportunity to cross-sell and upsell. Try sending a customer an email with a related product a few days after an order. Or use order tracking to follow-up with a customer before they re-order to encourage higher order value.

5. Provide incentives

Providing tempting incentives is worthwhile investment for any business but combined with upsell and cross-sell techniques it can provide an excellent benefit. 
Incentives are an opportunity for a customer to experience a more enriching buying process. Some examples of incentives you could offer are ‘Free shipping on your next order’ or offering discounts on related items.

Keep in mind that customers are opting for convenience and are happy to pay for it. Showing your buyers tailored recommendations and upgrades will ensure your customer feels heard throughout their purchase.

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