There are several techniques used by marketers to increase sales. Two such strategies are known as upselling and cross-selling. In these techniques, the sales representative tries to encourage customers to purchase a better product or buy other complementary products in addition to the ones the customer was originally purchasing. When companies use upselling and cross-selling strategies, they are able to generate greater sales from the customers. The objective of these tactics is not only to increase sales revenues for the companies, but also to offer increased value to the customers.
Upselling is basically the strategy in which you convince your customers to buy a higher-end product that has better features than the one they were planning to buy. Cross-selling, in contrast, refers to the strategy used to convince customers to buy other related products, in addition to the ones they are already planning to buy. In this article, the two terms upselling and cross-selling will be described in more detail and the differences between the two will be explained.
Definitions and explanations
Upselling
Upselling is the strategy used to convince customers to buy a premium product that includes more features than what has been promised in the product they were actually planning to buy. The purpose of upselling is to increase the overall value of the sales. The seller is basically trying to sell a more profitable product to the customer or to present a newer or improved version of a product so as to make a bigger sale. This strategy is effective when there is the highest possibility of customers going for the higher-end product.
In upselling, the seller makes the customers aware of the improved version of the original product and explains to them the benefits of buying that product. The seller may perform a comparison of the product the customer wants to buy and the newer product so as to highlight the additional value being offered. They try to explain to the customer that they will be getting a better value for money when they buy the more expensive product as they would also get several more features with this product.
For example, if a person wants to purchase a particular mobile phone, the sales representative may show a more recent model of that phone to the customer, while explaining to them the improved features provided by the newer model. They may try to convince the customer to purchase the newer, more advanced model of the phone so as to gain higher profits.
Cross-selling
Cross-selling is a strategy used by sellers to persuade the customers to buy other products that are related to the ones they are already buying. The seller may present other complementary products to the customer with the intention of fulfilling other needs that the original item may not fulfill. This would not only establish a complete set of products, but also lead to achieving the greatest value for the initial purchase.
The purpose of cross-selling is to compel the customer to buy other products along with the ones they were planning to purchase originally. The seller tries to benefit from other needs that may emerge from the purchase of the initial product, with the aim of enhancing their shopping experience, while also obtaining the highest revenue from them.
It can be asserted that cross-selling basically refers to the recommendations made for other products that the customer may require. The seller logically recognizes the best set of products that can be sold together. For example, several online stores and retailers have a “frequently bought together” option, in which customers are shown the products that are often brought along with the original purchase of the customer. In addition, companies also offer combo packages of related products so as to entice the customers to purchase the entire set. For example, if you are purchasing a laptop, you may be convinced by the sales representative to buy a laptop bag or a mouse along with it.
Difference between upselling and cross-selling
The main points of difference between upselling and cross-selling are listed below:
1. Meaning
The customer is persuaded by the sales representative in upselling to purchase a better, more advanced version of a product that they were actually planning to buy, with the aim of increasing sales revenue and offering better value to the customer. In cross-selling, however, the sales representative tries to convince the customer to spend more money to purchase other items that are related to their original purchase, with the aim of selling a greater number of products and hence, increasing the overall sales revenue.
2. Purpose
The purpose of upselling is to sell a product that has more value and costs more than what the customer was actually buying. Cross-selling, on the other hand, has the aim of persuading the customers to spend more money by offering them to buy other related products in addition to the one they were actually buying.
3. Value of sales
Upselling seeks to bring an increase in the actual value of sales, whereas cross-selling tries to increase the overall value of sales.
Upselling versus cross-selling – tabular comparison
The comparison of upselling and cross selling in tabular form is presented below:
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| Meaning | ||||
| Convincing the customer to buy a higher end product instead of the one they were actually planning to buy | Convincing the customer to buy more products that are related to the one they were buying originally. | |||
| Purpose | ||||
| Selling a product with more value and higher price | Sell other related products in addition to the one the customer was initially purchasing | |||
| Value of sales | ||||
| Actual value of sales increases | Overall value of sale increases | |||
Conclusion – upselling vs cross selling
Upselling and cross-selling are two techniques that are used extensively by companies to increase the overall worth of the deal. The two strategies are similar in the sense that the objective of both is to offer higher value to the customers. Both the strategies aim to increase the worth of the order and to present product alternatives to the customers that they were not aware of. Upselling and cross-selling can only be effective when you comprehend the things that your customers value and need, and then offer them products and services that fulfill those needs. When carried out properly, they present a win-win situation for both the company and the customer, in that the company is able to generate greater sales revenue from the customer, while the customer makes a more valuable or useful purchase.
