Upselling vs Cross-Selling: The What, How's, and Why's

Most companies work hard to boost their profits. Getting customers to buy more should be easy, especially when you sell the right products and process card payments online. But lots of eCommerce businesses make it more complicated than it needs to be. Preference is often given to expensive marketing campaigns to increase the customer base. But, what few South African online shopping startups realise is that two simple on-page strategies targeted at the right people could be all they need to encourage more sales from their customers.

The on-page selling strategies referred to have long been implemented by brick-and-mortar stores to get customers to increase their basket size. Consider the following scenarios: A customer orders takeaways from a fast food restaurant and the cashier asks them if they would like to upsize their meal with extra fries and a soda. A car buyer walks into a dealership where the salesperson convinces him to buy a better variant of the same car model. The benefit of these two techniques – known as cross-selling and upselling – is that they can generate better value for customers, which, in turn, can drive loyalty and more revenue.

What are upselling and cross-selling?

Before the customer arrives at the payment gateway, your website can influence them in two ways to raise the purchase amount.

Upselling is a method of encouraging shoppers to buy a product of higher value, such as one that is slightly more expensive and has more features than the customer's original choice in the same product range. This can only be achieved when businesses successfully tap into the practical and emotional needs of the customer. For example, a customer looking for a new mobile phone may want to be one of the first to own the latest smartphone, but they also want to be assured that the smartphone will give them a range of physical benefits such as better video quality.

Cross-selling targets customers who have already purchased a product but may need related or complementary items. This method of selling typically occurs in online stores that stock more than one type of product that consumers will find useful. So, the customer who purchased the smartphone may also need a protective case, power bank, selfie stick or mount. The customer may have forgotten to add these complementary products or they may not know that your website offers them. Therefore, as soon as they added the main product in their basket, your website should show "recommended products" or "people who bought this also bought...."

How to upsell and cross-sell

Although upselling and cross-selling can both strengthen your bottom line, their main difference lies in the way your promotional messages relate to the customer's main purchase. Note that human interaction and personal touch is still the fundamental approach needed for either method. But, with cross-selling, you should attempt to solve a problem for the customer. By generating a preliminary list of additional products, you provide a solution that meets a customer's needs. With upselling, you should understand that it's less about the needs of the customer and more about the comforts or elegance that the product delivers to the customer.

When engaging in upselling and cross-selling strategies, it's important to remember the following pointers:

1. The relevance of the product

Do your recommendations match the product the customer came to buy? Upselling and cross-selling can only be successful when they relate to the customer's original purchase. This means you should either offer them a premium model with more features than the basic model or a product that complements their purchase.

2. The benefits the customer will reap

You may find an accessory that goes nicely with the customer's product, but if they don't personally find it useful there's no point in trying to sell them that add-on. For example, while a selfie stick may round out a smartphone purchase, it may not be properly aligned to the needs of the customer if they are a senior citizen.

3. Are they really willing to pay more?

If a customer primarily shops on your "Sale" page, it could be that they have less cash to shell out. In this case, upselling or cross-selling may not work. If a customer has already indicated that they are not interested in additional products (for example, by dismissing a product recommendation pop-up), do not overwhelm them with further offerings.

4. Promote your most reviewed, most sold and most relevant products.

Some products work better as upselling and cross-selling offerings. It will be much easier to convince customers to upgrade or supplement if you show them your best-selling or most reviewed products, provided that they are truly relevant to the customer's purchase.

Cross-selling and upselling are simple yet powerful strategies that can help online entrepreneurs and eCommerce business owners achieve a higher conversion rate. With either method, the goal is to increase basket size by notifying shoppers of other products they may not be aware of. To accomplish this, you need to be able to identify the things that are most important to consumers, and then come up with the best products and features to fulfill their needs.