Upselling And Cross-Selling: Techniques for Maximizing Profits!

Upselling and cross-selling are two marketing strategies that are widely used by brands to increase their profits and average order values. Both these marketing strategies are very simple yet highly effective in boosting sales for a business. This makes it even more important to explore the concept of upselling vs cross-selling.

According to McKinsey, upselling, cross-selling, and other product-recommended marketing tactics are responsible for increasing sales by 20 percent and 30 percent.

The best company to list that leverages upselling in the most authentic and accurate approach is Amazon. Statistics have proven that Amazon earns half of its revenue directly by using an upselling strategy. Amazon gives the credit of 35% of its revenue to upselling and cross-selling.

With the help of this blog post, I’ll be shedding some light on upselling v/s cross-selling. Also, the benefits of implementing these marketing strategies to your business model.

What Is Upselling and Cross-Selling?

Before jumping into the differences between these marketing strategies, it is crucial to understand what each of them means. Let’s start with,

1. Upselling

It is a sales technique where a seller offers the customers to purchase a more expensive product, upgrades, or other add-ons, in an attempt to make a more profitable sale.

It constitutes an approach where customers are prompted to consider purchasing a more premium version of a product than their initial intent. Although the term “upselling” might evoke thoughts of pushy salespeople aiming to extract more money from customers, in reality, it’s a potent and valid sales tactic that can strengthen customer connections, elevate the overall customer journey, and boost revenue.

2. Cross-Selling

It is the technique of selling an additional product or service to an existing customer at the time of shopping. Cross-selling is used to gain more revenue by showing products related (variable product) to the purchased product (parent product) to the current customers.

When effectively executed, cross-selling proves mutually advantageous for both you and your customers. The optimal scenario arises when an existing customer remains unaware of a product or service that could enhance their experience. Discovering this opportunity aligns seamlessly with their customer journey, via their preferred communication channel, and elicits a positive response, resulting in their adoption of the suggested offering.

Now that we know what cross-selling and upselling are, let’s understand upselling vs cross-selling. In the coming section, we will talk about the difference between the both.

Pre-Purchase Upselling And Cross-Selling In Brief

In an eCommerce ecosystem, a pre-purchase offer is shown to the customer either on the product page or on the cart page.

Commonly the pre-purchase offers are shown in the form of a banner, popup, or an on-page div, and if the offer is accepted the cart is either updated or the product is added to the transaction.

The challenge is to find the right balance.

Offers that you recommend should be inexpensive and relevant to the current purchase order. The last thing you want is to scare your customers away with aggressive upselling offers before they finish their transactions.

Therefore, before placing a pre-purchase upselling offer make sure the offer is soft, relevant, and clear for a shopper. Understand this, if your offer doesn’t match with these parameters your overall conversion rate will be negatively affected.

Pre-purchase upselling and cross-selling offers are also known as order bumps.

In eCommerce, an order bump is an upselling and cross-selling marketing technique in which a merchant tries to increase the average order value right before the checkout process is completed.

Upselling vs Cross-Selling – What’s The Difference?

Let’s first start with upselling v/s cross-selling which will help us in understanding the difference between the two.

Upselling vs Cross-Selling

These terms are often confused, but there’s a slight difference.

While upselling focuses on increasing the order value by persuading the customer to make expensive purchases, cross-selling involves making a product recommendation that can be purchased as an add-on.

You might have unconsciously come across many upselling and cross-selling offers when you are shopping online.

Comparison Between Upselling And Cross-Selling

LIVE EXAMPLES

Anyways, let’s understand the concept of upselling v/s cross-selling with some examples. For instance, you visit Amazon to buy the iPhone 12 pro 128 GB variant.

Suppose the price shown to you on the product page is $949. You choose to buy the phone and when you press the Add To Cart or Buy Now button Amazon shows you some more product operations. The product shown to you by Amazon lies in one of the following categories, either an add-on or an upgrade of your current purchase.

Let’s understand this with the iPhone we were purchasing. You found the product, pressed the Add To Cart button, and visited your cart page. On the cart page, you’ll be recommended some add-ons such as phone cases or screen protectors for your phone by Amazon. This can be the perfect example of upselling vs cross-selling.

By making product recommendations Amazon is trying to cross-sell some of its products that go well with your current purchase.

Suppose you added the product to the cart and scroll down a bit further on the page you’ll find a section where you’ll find a comparison of the recent purchase with all the upgrades.

The “similar items” section is the place where you see upselling offers and as a result, the customers can upgrade their purchase. In simple words, Amazon is trying to make you spend more on the same item for a better average order value.

So this was all about how upsell and cross-sell are two different marketing strategies. Now as an online business owner, you can show upselling and cross-selling offers either pre-checkout or post-checkout.

I’ll be sharing the concept of pre-purchase upselling vs cross-selling in brief.

Benefits Of Upselling & Cross-Selling

Upselling and cross-selling are age-old techniques that have been used by business owners to surge their profits. These techniques are traditional and still prevalent in the modern online shopping scenario. Therefore, it is a sin to think upselling and cross-selling are pointless endeavors.

I’ll make my point even more evident by sharing the prominent benefits of upselling and cross-selling.

1. Personalized Customer Experience

We’re living in the era of personalization and customers prefer to engage with brands that can offer suggestions that are relevant to their shopping behavior.

The product recommendations made in upselling and cross-selling are so personalized to the customers’ needs that they are persuaded to grab the offer. Apart from being personalized, the offers are reasonable and no one can ignore them.

Here’s an example from my favorite brand Apple:

As you can see Apple provides an AppleCare+ service to their customers for just a few additional bucks when a customer buys an iPhone or a MacBook. In short, you not only get to relish your favorite gadget but protect them from theft or damage too.

2. Boosts the ROI (Return on Investment)

The obvious benefit of adding upselling and cross-selling to your marketing arsenal is that it boosts revenue.

Source: Venture Harbour

The above screenshot from Vimeo shows us how the brand uses upselling to recommend its customers a better plan to curb weekly storage limits. This not only increases the profits for Vimeo but conveys a message to the audience that by spending a few more bucks they can increase the usability of the product.

Signing on new customers can be a tedious job, this is why brands adopt upsell and cross-sell marketing strategies for customers. By doing so, you see an instant hike in profit and receive a better return on your investment.

3. Increase Average Order Value (AOV)

Upselling and cross-selling are responsible for increasing the average order value. As a result, the value of every sale is optimized. As you might be aware the chances of making a sale to an existing customer are 60 to 70 percent more upsell and cross-sell targets customers that are currently buying from you.

Here is a basic example to make our readers understand the concept and this benefit better, the example explains two scenarios (upselling vs cross-selling),

By providing value-driven upgrades to customers’ current purchases you get 2 benefits:

• It increases the average order value in the short term and
• Increases the customer’s lifetime value in the long term.

4. Offers Customer Retention

The competition in the eCommerce space is tough and getting new leads is a mammoth task, therefore, successful brands focus more on customer retention than customer acquisition.

While many marketing strategies induce customer acquisition, cross-selling and upselling are some of them. They allow your customers to buy and leverage a complete solution and do long-term business with your brand.

Here’s how:

• Customers can view all your offers in a more holistic way and on a single page. Also, the best part is that the offers are exclusively related to the products that they are buying. In this case, Apple customers can see all the offers related to network and phone care on a single product page without having to browse all the pages.No one likes to run around to buy different products from various spots, therefore, it is better to provide everything at a centralized location.
• If you’re successful in providing offers that are relevant to your audience, they are going to love it. As a result, it increases customer loyalty for your brand to reach new bars. By showing relevant upsell and cross-sell offers you are telling your customers indirectly that you know what they want and that you care about their choices.

5. Unparalleled Shopping Convenience

The unparalleled shopping experience is one of the underrated benefits. The marketing strategies are responsible for easing the decision-making process for customers.

The question is how?

While making an upselling offer you demonstrate your customers’ choices by highlighting them through your content.

Here’s how Instapage does it:

In its newsletter email, Instapage first demonstrates the needs of the customer by highlighting the problem area. After a brief explanation, you can see a CTA from where you can schedule a demo with their team and get enlightened about the product.

With the help of upselling, Instapage creates a seamless shopping experience for the target customer and deepens the relationship. These were the prominent benefits of including cross-selling and upselling while building your marketing blueprint.

Now as I promised, let us see some tips you can consider for overcoming the challenges businesses face while implementing upsell and cross-sell offers.

Tips For Cross-Selling And Upselling

The biggest challenge is to be soft, less aggressive, and relevant with your upselling and cross-selling offers because the last thing we want is to scare away your prospects.

Adopting upsell and cross-sell techniques is just the beginning, businesses don’t just start making profits instantly. Let us through some tips and tricks, that will help you in the long run to make your brand profitable.

1. Try To Know Your Audience

It may sound obvious, but knowing your audience first is important. Try to build a buyer persona using various analytics tools and demographics. You can also perform quarterly reviews with your existing customers and understand their needs.

In short, understand the goals and challenges of your customers and tailor offers that help them reach their goals.

2. Trace Your Customers’ Journey

Tracing your customers’ journey will help you understand how they are going to use your products and services. If your products are adding value and helping your customers to grow you’ll reach a point where they’ll automatically refer your products to others.

It is at this point in their journey that they would want to hear your cross-selling and upselling offers and buy more from you. If you remember the example of Vimeo the brand suggests the customer an upgrade at a certain point when he/she has used it enough.

3. Try Making Bundles

Bundling your products is a smart move for making upselling and cross-selling offers to your customers. Dollar Shave Club bundles all the important products in a package where the customers don’t have to search for different products.

It saves shoppers’ time and the brand doesn’t have to show multiple upselling and cross-selling offers for different products.

The chances that a customer will buy a bundle of products are dramatically high and on the brighter side, your upsell offers are less aggressive and more relevant.

4. Keep A Check On The Prices

Pricing is a major factor in making your upselling and cross-selling offers a huge success. If the products you’re cross-selling are priced reasonably lower than the product then the chances of the item being purchased become higher.

5. Keep It Simple

It doesn’t matter how big your discounts are if your customers cannot access every marketing effort will go in vain. If you’re making your customers overwhelmed by offering too many discounts and offers, the strategy might backfire. The reason is it may cause a sense of confusion and disrupt the buying experience.

The key is to keep it simple; limit your upselling offers to a minimum. Offer products that you think will score the highest on the relevancy scale.

6. Use Multiple Channel

Upselling and Cross-selling should not be restricted to one channel. Merchants can use multiple channels to make their customers aware of these activities. They can use email marketing, and Social Media Platforms as well for this purpose. This maximizes your chances for success and also ensures that you are consistently tracking the various campaigns.

Other channels can be text messages, and social selling i.e. asking influencers to promote your products. It was revealed in a study that the CTR (Click Through Rate) is 9 times higher than any other sales channel, this introduces a new way of cross-selling and upselling. Similarly, online store owners can ask influencers to promote products along with supplementary products.

7. Create Urgency

Store owners can also take advantage of social media platforms to make their customers aware of the ongoing upselling and cross-selling activities. They can incorporate limited-time offers, countdowns, and flash sales exclusively announced on platforms like Instagram and Facebook.

Utilize social proof through customer testimonials and reviews to build trust. Offer exclusive deals to your social media followers, making them feel privileged and motivated to act quickly.

These are some of the tips that you can use to tailor your upselling and cross-selling strategy for the coming years. To summarize, all the upselling and cross-selling offers should be built on the foundations of relevancy, personalization, and customer satisfaction.

When To Use Upselling & When To Use Cross-Selling?

Before jumping into the plugins that will help you streamline your upselling and cross-selling process, it is also important to understand when to start using these selling techniques.

Let’s Begin with upselling,

To upsell, you must have multiple tiers of the same offer. For example, Netflix has different subscription tiers for different pricing plans.

Similarly, Saas Companies also develops a full-featured product. But reserves some of the best features for the plans to be sold for a premium, without the company having to pay extra.

Moving on to cross-selling,

Cross-selling is a selling technique that can happen both in-cart and post-purchase. Just make sure of the following criteria,

• Should be personalized to customers
• Related to the initial purchase
• Less expensive than the original purchase

Plugins to Help You Streamline Your Upselling Process

If you’re a customer of WP Swings reading this article you know how much effort we put into building eCommerce solutions. Countless entrepreneurs are making their way toward building a successful online business. Therefore, we strive to build solutions that help marketers, entrepreneurs, and business owners fight their way and break all the barriers to success.

Our team of WooCommerce experts has built the following solutions to help you implement the power of upselling and cross-selling on your store efficiently.

Let’s learn about them one by one.

(Note: These solutions are exclusively for eCommerce websites that are running their businesses using WooCommerce)

1. One Click Upsell Funnel For WooCommerce

One Click Upsell Funnel is a WooCommerce solution that allows merchants to create post-checkout upselling and cross-selling offers. Customers can grab these with a single click and no hassle entering shopping details.

The best part of this plugin is that you get to track the success of your cross-selling and upselling offers. With the help of the deep analytics tool, you get the opportunity to know which upselling offers the best and which needs improvement.

It is easy to set up and user-friendly for the merchants, to make the sale across their platform engaging for the customers, If you still have any donuts regarding the set-up of the plugin – Documentation for One-Click Upsell. 

With the One Click Upsell Funnel plugin, you can:

• Trigger upselling WooCommerce funnels on target products or categories.
• Creates category-based offers or product-based offers.
• Accept payments from core payment gateways.
• Use the 8 pre-built templates that are customizable and mobile-friendly.
• Build one-time upsell offers by major page builders with zero coding.
• Show post-purchase upsell offers that your customers can grab in a single click.
• Our upsell plugin is fully compatible with the WooCommerce Currency Switcher plugin, which allows you to convert the price of your upsell products and shipping into any currency type available.

2. Upsell Order Bump Offer

Another highly recommended solution developed at WP Swings for WooCommerce store owners: Upsell Order Bump Offer. This is similar to the previous plugin except it helps you create pre-checkout upselling and cross-selling offers on the cart page.

Merchants can create WooCommerce order bumps and offer funnels for simple, variable, and subscription products through this plugin. The plugin also allows merchants to track the sale and behavior of every order bump upsell they’ve added to their store. If you want to learn more about the plugin— Documentation for WooCommerce Order Bump!

With the Upsell, Order Bump offer plugin you can:

• Customize and Personalize to a whole new level. The admin can now customize and make their very own Order Success Page.
• Smart Skip to skip the bump offers if already purchased
• Offer Upgrade to offer an upgrade on the existing purchase
• Create multiple order bumps to offer funnels
• Incorporate an evergreen timer on the checkout page, which automatically resumes whenever the page is refreshed
• Merchants can set bump recommendations, which will reflect when the customer is adding a product to their cart.

Over To You…

These were a few solutions that have been developed by our team of WooCommerce experts. With the help of this, you can practically implement your upselling and cross-selling strategy. Upselling and cross-selling do the same thing i.e. increasing AOV and profits but have a slight difference in the way they work. Rather than understanding the concept of upselling v/s cross-selling it is more important that you make sure your offers are relevant and less aggressive. I hope we can properly explain the concept of upselling vs. cross-selling.

But Hold On!

We have an exclusive treat for all our lovely readers. Are you ready to amplify your profits? You can do this with an Upsell Order Bump Offer. Because upselling will always be the Ultimate Hack for Selling!

Are you ready to expand your profits & revenues this festive season? Start incorporating cross-sell and upsell marketing techniques today!

Happy Selling :)