The most effective strategy generally implemented by businesses to make their customers spend more is up-selling and cross-selling. Keeping in consideration the importance of existing customers, it’s more fruitful to explore various selling opportunities with them rather than finding a completely new set of customers.
Let’s start and learn what up-selling & cross-selling strategy is and how you can implement those even in your business.
What Is Up-Selling?
Up-selling is the process of selling the upgraded & more expensive version of the same product than what the customer was actually planning to buy.
Let the word ‘more expensive’ not steal your focus.
The upgraded product is more expensive because it has more features, more benefits, and offers more value to customers.
And customers understand that added value comes with additional cost.
The right way of up-selling will only make your customers more satisfied, delighted, and loyal.
If YouTube gives an option of upgrading to a paid but no-ad version of it, YouTube is trying to up-sell. But let’s not overlook the fact that YouTube is also solving its customers’ problems and not just trying to get some money out of their pockets.
YouTube customers who have upgraded don’t feel cheated. On the other hand, they feel satisfied as they enjoy the additional benefits that they are getting.
When you’ll start noticing, you’ll find up-selling examples everywhere. In the basic terms, up-selling will be –
Product 1) Pencil $2
Product 2) Pencil with an eraser on top $2.5
If your customer wants a pencil (product 1), and you sell her a pencil with an eraser on top (Product 2), you have just made an up-selling.
Here are some other examples –
Up-selling Example 1
Do you remember going to a website and finding two or three subscription packages, maybe one free and the other two are paid?
These businesses are trying to up-sell their products to you in the form of premium subscriptions.
For example The New York Times, Spotify, Google Docs, YouTube, and many more.
Going to a mobile store and ending up buying the more advanced and more expensive phone than what you earlier planned for.
What Is Cross-Selling?
Cross-selling is the process of selling complementing or supplementing products to customers in addition to what they have planned to buy.
In this case, you are not selling an upgraded version of the same product. In contrast, you are offering a completely new product.
Let’s take the same pencil example and see what cross-selling will look like in its case.
Product 1: Pencil $2
Product 2: Sharpener $2
Product 3: Eraser $1
Product 4: Colored Pencil $2
So, if a customer comes to buy a pencil (product 1) from you and you sell him a pencil plus a sharpener or eraser or a colored pencil or a combination of any of these or all, you have just practiced cross-selling.
Few other examples from our day to day lives –
Have you ever gone to McDonald’s? Do you remember the staff saying to you while confirming your order, “would you like to add French fries to your order?” If yes, then you have seen a business doing cross-selling.
Let’s discuss another example from the digital world.
While shopping on Amazon, have you ever seen “customers who bought this item also bought” section? I am sure you have.
I have browsed those products many times myself. This is a great example of cross-selling on a website.
Going to an electronic store to buy a laptop and returning with a laptop, laptop stand, laptop cover, laptop cooling fan, and speakers. We have all been there!
How To Up-Sell & Cross-sell?
You must have understood the importance of up-selling and cross-selling until now. Then, you must be wondering about what kinds of strategies you can adopt to up-sell and cross-sell in your business.
No doubt, up-selling and cross-selling are techniques that should be implemented by all businesses.
They lead to repeat purchases, satisfied customers, and increased customer lifetime value.
Make It A Part Of Your Business Strategy
The most important thing to remember is that up-selling and cross-selling shouldn’t be just implemented into your digital strategy or even your marketing strategy, but these techniques need to be implemented into your entire business strategy.
This means that whenever there is a customer touchpoint (interaction between your brand and your customer), you have an opportunity to up-sell and cross-sell.
Customer touchpoints are not related to just limited to the digital world.
You can have an interaction with a customer in your store, in your client meeting, in an event, and in many other places.
And whenever you get a chance to interact with your customers, you have a chance to offer them additional values.
Know Your Customer Well
In fact, the success of every strategy depends on how well you know your customers.
Better research you have done to learn more about your customers and their needs, better results all your marketing strategies are going to generate.
But if you do it to an audience whose needs you haven’t understood well, you will end up only frustrating them as your stalking ex made you.
When you are familiar with your audience, your up-selling, and cross-selling strategies will add value to your customers’ lives and they will appreciate you for that.
But when you have not researched your audience and are poorly targeting them with your messages, you will only look like a scammer who is trying to get more money out of their pockets.
Align Up-sell & Cross-sell With Customer Journey
Selling according to the customer journey is one of the most effective ways of increasing your sales number.
You can never sell to a customer who isn’t ready or is looking for it.
If your customers are still in the awareness stage which means if they are still learning about you and don’t know your product so well, you can’t up-sell or cross-sell a product meant for those customers who already know you and trust you.
A customer, generally, goes through the following customer journey stages:
- Post-Purchase Behavior
All your selling techniques should be aligned according to the customer journey stage and customers’ thought process in that stage.
Focus On Customer Needs, Not On Sales
Customers have needs and businesses have a way to satisfy those. This is the foundation of any business.
In short, businesses sell because they want to serve customers, and customers buy because they have unsolved problems.
It’s a mutually beneficial transaction for both. This is something that defines the existence of a business.
If your business goal is something else rather than serving your customers, you will not achieve much success with your up-selling and cross-selling techniques.
Up-selling and cross-selling strategy is always done to solve customer problems.
Any strategy which benefits only one party is destined to fail.
Make sure that you first align your up-selling and cross-selling goals to your customers’ needs and goals. Once you have done that, you will find these strategies as highly effective for your business growth.
Have you ever noticed other businesses doing up-selling and cross-selling?
Did it work on you? Let us know in the comments.