If you want to grow further as a business, you can either find more customers, or get your current customers to buy more. There are different strategies for getting your customers to buy more. In this blog, we take a closer look at cross-selling and upselling.
What is cross-selling?
Cross-selling is the sales process where salespeople encourage a customer to purchase additional or complementary products or services related to their original purchase. The aim of cross-selling is to increase customer satisfaction and total purchase value per customer. Cross-selling in practice can look like the following:
- Office supplies: An office supplies supplier suggests additional products such as printer, ink cartridges or ergonomic furniture when a business customer purchases laptops.
- E-commerce: A customer buys a laptop, and during checkout shows some additional accessories: a laptop bag, a mouse and wireless earphones.
- Telecom provider: Is a customer taking out a mobile subscription? If so, the company may recommend adding phone insurance as well to protect their device.
- Software: A software company selling CRM software offers other add-ons or modules to customers.
What is upselling?
Upselling, in turn, is the sales process of recommending a customer to upgrade to a more expensive or comprehensive product or service than they originally intended to buy. Your Sales department may try to convince customers to invest in product with more features, better performance or higher quality. Examples of upselling:
- Consultancy: A consulting firm suggests expanding the scope of consulting services to include strategy implementation, training or ongoing advice
- Hotel booking: a customer booking a standard room is urged to upgrade to a suite at check-in.
- Airline ticket: while booking an airline ticket, a better first-class seat is offered.
- Comprehensive maintenance contracts: an industrial machinery manufacturer can use upselling by convincing customers to take out comprehensive contracts, with more than basic repairs and regular maintenance.
The aim of these sales strategies is always to increase the customer's average transaction value. Whereas cross-selling is more about additional products or services that can be useful with the original purchase, upselling is more about enticing the customer to choose the more expensive option (with more features). Both cross-selling and upselling can be effective in increasing your sales!
