upselling and cross-selling
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Upselling and Cross-Selling

Most businesses are constantly trying to sell more. But is upselling and cross-selling the most effective way? What are these methods and what are the differences between them?

Upselling

When a salesperson upsells, they are encouraging a customer to buy a more expensive version of their original choice, or a version with more ‘add-ons’, which results in a higher cost. An example of this is when purchasing a basic ‘no frills’ airline ticket. The ticket as advertised will be a basic economy class seat. When a customer starts the booking process, they will have the option to upgrade their basic level seat to one that includes luggage allowance, more leg room and priority boarding or simply a more flexible ticket that can be changed more easily.

One of the key considerations of upselling is the price point. If a customer only started the booking process because they wanted a cheap trip somewhere for £100, they are unlikely to want to spend an additional £100 on what they might see as unwanted extras. However, if you can price each extra attractively and show the value to the customer of the extra item, then you have more chance of upselling.

When considering upselling, you need first to decide which of your products is appropriate to upsell. Look at the products you offer and evaluate if you have a product that can be added to or upgraded relatively easily. The customer needs to be able to clearly see the added value they are getting for the additional cost.

The timing of making the upsell is important. One way is to wait until the customer has agreed to purchase the basic item, and then ask them whether they might be interested in a version of the product with more features or better functionality. You need to be careful not to end up criticising the basic level product while you extol the benefits of the upgraded version!

Always keep in mind what your customer needs and why they approached you. Consider their likely budget and requirements. You are unlikely to sell an upgrade to a first class ticket to someone who came in for a basic economy ticket, but you may be able to sell them more luggage allowance.

 

Cross-Selling

In contrast to upselling, when cross-selling, the salesperson is selling an additional product, rather than a replacement product. Consider the infamous McDonalds questions “Would you like fries with that?” or the Amazon section ‘Frequently bought together’ when looking at a product.

To be able to cross-sell in your business you need to have compatible products that go together well. Use your sales data to see what customers are typically buying together, whether its software bought when purchasing a laptop, or a hot drink when a meal is purchased. Think about your pricing, typically cross sold items have a similar price rather than being vastly different.

 

Which method should you choose?

Whichever method you choose, you need to be able to collect data to assess whether it is effective. Look into which of your products link to each other for cross-selling, and ensure that your sales team document what their customers originally wanted, and what they eventually bought. Only by collecting such data can you fine tune your sales techniques and ensure you use both methods effectively as possible.

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