Cross selling and upselling are quick ways to improve your revenue.
You’re engaging with customers that already have a relationship with you, your business and your brand.
It costs you less time and resources to educate, sell and convert, as your customer is already bought in to your product or service.
But how do you build an effective cross selling and upselling programme?
Read this blog post to find out what constitutes upselling and cross selling, whether online or in person.
Understanding upsell and cross sell methodologies
Comparing cross selling and upselling offers insights into both strategies and how you can utilize them.
At their core, both cross selling and upselling aim to boost the value of a customer's purchase. They both rely on understanding your customer and their needs. Sales personnel should leverage this knowledge to propose products or service upgrades.
The goal of cross selling and upselling isn't just to sell more, but to enhance satisfaction and customer loyalty by suggesting additional solutions/products to add to their existing suite of products.
Although similar, upselling and cross selling achieve the goal of greater customer satisfaction differently.
Upselling involves encouraging customers to buy a higher-priced product or service, typically an upgraded version of one they've already shown interest in. From the customer's perspective, the focus is on increased value, not spending more — for example, upselling a customer interested in a used car to buy a new model.
Conversely, cross selling means suggesting additional or complementary items. The aim is to increase the total number of products or services the customer purchases. For example, a window cleaner might recommend clearing your gutters on top of their usual service.
Timing may also differ with upselling and cross selling. An upsell is most effective early during the customer journey, ideally when customers are deciding which product to buy.
Conversely, cross selling often occurs at the point of sale since it involves proposing extras to complement the customer's purchase.
Both sales techniques need a delicate balance. Sales staff must avoid being overly pushy. An upsell or a cross sell should never be a hard sell. The key to both approaches is to demonstrate real value for the customer.
Otherwise, they might not buy anything or return as a repeat buyer.
How to build an upselling strategy
Encouraging customers to purchase a superior product or service add-on will increase the value of their purchase with virtually no additional costs to your business.
How do you develop an upsell strategy to which your sales personnel will respond?
First, pay attention to your best-selling and highest-margin products and services. When deciding which ones to recommend, identify items that are proven popular.
In addition, chosen products should have a strong sales record and a high margin. After all, there's no good reason to emphasize products and services in your upsell strategy that don't drive profits.
Upselling isn't just a matter of convincing someone to spend more. Instead, it should be personalized with their specific requirements.
Use your customer data to identify buying patterns and common needs that your products and services can meet. Understanding your customers' perspectives will help you target upselling practices more effectively.
When upselling, you need to communicate the benefits of your suggestions well. Never just list product features or service components.
Instead, get your sales reps to articulate how the upsell provides additional value. Customers who see the advantages won't be as concerned about extra expenses. For example, talk about how the upsell might save them time, resolve a problem or enhance their experience. The more convincingly you can tie the upsell to the customer's needs in terms of value, the more successful you will be.
Offering premium versions of your products or services is another element of a winning upselling strategy. This process could involve providing service tiers, such as gold, silver and bronze. Providing add-ons, upgrades or designing luxury versions of standard products could also work.
Another way to improve upselling is by incentivizing customers. For example, a small discount on an upgrade or limited-time offer can make it more tempting. Equally, a bundle deal with multiple products or services often makes a more expensive option more enticing.
Finally, measure the success of your upselling efforts. Use analytics tools to track the uptake of your offers and identify which sales staff upsell the most.
Seek hard data that indicates the changes in average transaction value, but also listen to customer responses, especially when an upsell hasn't worked. This way, you'll know how to refine your upselling strategy. Identify which tactics work and discard those that don't.
Eight tips for a successful upselling strategy
- Promote best-selling and high-margin products
- Understand your customers' buying habits
- Emphasize the value of the upsell product or service, not just its features
- Offer premium versions or bundled add-ons
- Don't push too hard – get your sales team to suggest an upsell, not demand it
- Utilize incentives to make an upsell more enticing
- Review the success of your upselling efforts
- Refine your strategy based on customer feedback and performance data.
Building a cross selling strategy
Cross selling involves recommending related or complementary products to customers. The idea isn't to replace their choice with an upgrade but to increase the total value of their purchase with an associated sale. In common with upselling, implementing an effective cross sell strategy requires attention to detail.
First, understanding your customers is vital. By analyzing the buying patterns of your customers, you can identify which products are frequently purchased together. With this data you’ll know when and which products or services to recommend to your prospects.
Equipped with the knowledge of what goods your customers regularly purchase, you can make meaningful recommendations. The strategy should add value to the customer's purchasing experience and not just feel like it's been randomly automated.
If a customer thinks you're trying to push extra products without good reason, it could put them off from working with your business in the future.
Cross selling at the right time is also a critical element of your sales strategy. It’s often most effective at specific points in the customer journey, such as during a checkout process or shortly after a purchase. This can vary in B2B sales environments, depending on the specific sector.
Offering discounts on combined purchases is a tried-and-tested way to cross sell more effectively. When customers see they can save money by buying a bundle of products, they'll be more likely to opt for the deal.
If it results in just one call-out fee, adding another service on top of the one they've ordered is another common way to cross sell field-based services.
Recommendation systems can, also, boost your cross selling efforts significantly, especially in e-commerce. These systems use data on typical buying patterns to suggest products that customers might want, even if the items aren't directly related.
For example, when someone buys hiking boots, they may also be looking for a tent, so suggesting a series of tents would be a good crossell opportunity.
Like upselling, you should track the success of your cross selling strategy. Analyze data and review your sales figures to understand what does and doesn't work for your company's sales pipelines.
Then adjust your plan accordingly, especially if you manage a sales team and some reps are better at cross selling than others.
Eight tips for a successful cross selling strategy
- Establish buying patterns to identify products that complement one another.
- Only recommend cross sells that make sense.
- Be subtle in your cross selling by only aiming to enhance the customer experience.
- Time your cross sell offers for the right moment during the customer journey.
- Incentivize cross selling by offering deals on combined purchases and bundles.
- Explain how buying an additional service can save time and money.
- Personalize cross sell offers based on purchasing histories.
- Track the performance of your cross selling strategy and adapt it accordingly.
How to bring your upselling and cross selling programs together
Combining upselling and cross selling strategies offers the complete approach to revenue growth. Integrating your method in both practices can generate a unified customer experience that fosters brand loyalty. Here's how to bring your upselling and cross selling programs together:
Create a vision of what you want to achieve
While upselling and cross selling require different techniques, sales reps should be comfortable utilizing similar skills. Explain to your team that the shared goal of cross selling and upselling is to enhance the customer's experience. Only a cohesive vision focusing on this goal will add true value, improve customer satisfaction and boost revenue.
Really understand your customers
To upsell and crossell effeciivley, you need to capture, analyse and undersatdn as many datapoints across your customer’s buying experience.
Consequently, you should merge data sources from different points in the customer journey. Integrating upselling and cross selling data will give you a complete view of your customers' behaviors, preferences and needs. This unified perspective will help you develop tailored upsell and cross sell offers that will resonate with your customers. It will also help you identify when to upsell and when to cross sell.
Tools like customer relationship management systems, analytics packages and machine learning recommendation systems to streamline your combined strategy. Such technologies help automate personalized upselling and cross selling opportunities. By leveraging technology, highly effective and scalable strategies become possible.
Align sales and marketing teams
Greater coordination between your sales and marketing teams is essential for building a better cross sell and upsell program. Both teams should have a mutual understanding of your common upselling and cross selling objectives.
While the sales team interacts directly with customers, your marketing efforts should reinforce their upsell and cross sell offers through targeted campaigns, personalized emails and customer-specific offers. Regular communication between these teams will lead to a more harmonized approach.
Design bespoke customer journeys for each program
Design a customer journey that logically incorporates both upselling and cross selling. Consider during a customer’s buying process where upselling or cross selling would be most effective, including post point-of-sale recommendations.
Then, integrate these opportunities in a non-disruptive way. For example, offer product upgrades at checkout or suggest related products while customers browse or immediately after each purchase.
Maintain a low-touch approach that doesn't overwhelm customers with constant sales pitches. Remember, the primary objective is to enhance the customer's experience. Empathize with your customers and ensure your upsell and cross sell suggestions are appropriate. If a suggestion doesn't make sense or fit the demographic, review how your upselling and cross selling strategies work together and then tweak your approach.
Using CRM to utilize upselling and cross selling strategies simultaneously
To upsell and cross sell in unison, you should encourage your sales personnel to utilize your CRM system to its full potential. Your CRM should prompt your team to upsell and cross sell by providing the necessary data to make personalized suggestions.
If you want your staff to stop having the 'upsell vs cross sell' mindset and think of ways to combine the two practices, then your CRM system is a valuable tool you can deploy. Here's how.
Segment your customers effectively
Use your CRM to segment your customers based not only on their purchasing behavior but on past interactions, too. Doing this will allow you to create tailored upselling and cross selling strategies for each customer.
Automate certain recommendations
Utilize CRM integrations with automated tools to develop a range of product recommendations. Sales staff can still make the final upselling and cross selling decisions, but data-driven insights will inform their choices.
Track customer interactions
Monitor every customer interaction. Tracking will help you identify the right moment for an upsell or cross sell. Your CRM should help track these touchpoints and trigger timely offers.
Train your sales team
Ensure your sales and marketing teams are proficient in using the CRM. Let them know about the features that support upselling and cross selling activities.
Regularly update your data
Keep customer information updated. Accurate CRM data is important for effective upselling and cross selling strategies.
Integrate where you can
Enhance your CRM's capabilities by integrating it with other software. Email marketing platforms and customer support systems are examples of what can be integrated with a CRM.
Use a CRM to measure success
Tracking and reviewing the success of your upselling and cross selling efforts is crucial. Your CRM system should make this easier.
Now, build your own upsell and cross sell program
Upselling and cross selling are similar but should not be confused. Although the strategies are often deployed to boost sales, they typically work best together. For best results, think about upsell and cross sell offerings from the customer's perspective, only suggesting products or services that will be of genuine interest and provide added value.
Click here to learn more about Capsule CRM and access a 14-day free trial.
