Cross selling vs upselling are two powerful strategies to increase your customer’s average order value (AOV).
Did you know that the probability of selling to an existing customer is about 70%, while the probability of selling to a new customer is only around 10%?
That means you have to make the most of every customer. And upselling/cross-selling is the ticket to make it happen.
These techniques are designed to maximize a customer’s purchasing potential and elevate their overall shopping experience, but they differ in their approaches and goals.
So this article will be a comprehensive guide on cross-selling and upselling, including the difference between upselling and cross selling, cross selling and upselling examples and how to take advantage of them.
What is cross-selling?
Cross-selling is a sales technique of suggesting additional, complementary, or related products to the one the customers have shown interest in or already purchased.
There are 5 main benefits of cross-selling:
- Boosts revenue by encouraging multiple purchases from a single customer
- Diversifies revenue streams, reducing dependence on single-product sales
- Enhances customer engagement and overall shopping experience
- Encourages impulse buying, increasing the likelihood of spontaneous purchases
- Deepens customer relationships by catering to diverse needs and preferences
What is upselling?
Upselling is a sales technique of encouraging customers to upgrade to a more expensive or premium version of the product or service they initially intended to purchase.
There are 5 main benefits of upselling:
- Increases the average order value (AOV), leading to higher revenue per transaction
- Showcases the value of premium offerings, enhancing perceived product quality
- Fosters customer loyalty by providing enhanced features and benefits
- Improves customer satisfaction through personalized recommendations
- Strengthens brand reputation by delivering exceptional customer experiences
Difference between upselling vs cross selling
Even though upselling and cross-selling are similar sales tactics to increase profit, they are still different.
You can distinguish between cross-selling vs upselling based on 2 main points:
- Upselling increases revenue by suggesting a better quality and more expensive option for the product the customer wants to purchase
- Cross-selling increases revenue by offering other items that go along with the product the customer wants to purchase
In short, upselling is an upgrade to the existing purchase, while cross-selling is an additional purchase.
Cross selling vs upselling examples
To make it easier to differentiate these strategies, let’s take a look at 5 different scenarios and the corresponding cross-selling and upselling examples to them.
|Case||Cross-selling example||Upselling example|
|A customer adds a pair of sneakers to their cart||Suggesting socks, shoelaces, or shoe care products||Offering a pair of similar, but more expensive sneakers from the new collection|
|A customer wants to buy a cell phone||Suggesting a screen protector, phone case, or headphones||Offering a cellphone with a bigger screen, better camera and, thus, a higher price|
|A customer is about to book a hotel room for their vacation||Suggesting sightseeing tours or transfer options||Offering a more sophisticated suit at the hotel|
|A customer is interested in a cupcake baking course||Suggesting bread baking or donut training courses||Offering a professional cupcake design and baking course|
|A customer is craving for a pizza||Suggesting coke and spaghetti||Offering the similar pizza with extra cheese|
How To Cross-Sell And Upsell?
In this section, we will introduce you to some of our best practices to cross-sell and upsell:
Know your audience
Understanding your customers is the foundation of successful cross-selling and upselling.
You should analyze their purchasing behavior, preferences, and pain points. Don’t forget to check out the customer feedback, too.
This data will enable you to tailor your offers to their specific needs and interests.
Personalization plays a key role in effective cross-selling and upselling, as customers are more likely to respond positively to offers that resonate with them.
Build customer journeys
Crafting a seamless customer journey is essential in cross-selling and upselling.
Map out the various touchpoints where additional products or upgrades can be introduced naturally.
For example, after a customer selects a product, suggest related items that complement their purchase.
Ensure that the cross-sell and upsell offers are strategically placed throughout the buying process to enhance the overall shopping experience.
Identify the problems and solutions
Identify the pain points and challenges your customers may face, and align them with relevant products or services that can serve as solutions.
Position your cross-sell and upsell offerings as ways to address specific needs and enhance the value of their initial purchase.
By demonstrating the practical benefits of these additional items, customers will perceive them as valuable investments rather than mere add-ons.
Consider pricing strategy
A well-considered pricing strategy plays a crucial role in the success of your cross-selling and upselling initiatives.
For cross-selling, the additional products should be low enough for the customer to add them to their basket without a second guess but high enough to contribute a remarkable amount to the AOV.
For upselling, though the aim is to increase the profit and sell a product at a higher price, a price difference between the initial and the recommended product shouldn’t be too big so the customer might consider it.
Tips for Successful Cross-selling and Upselling
Now, let’s move on to some useful tricks that apply to both techniques.
Product recommendations based on purchase history
Utilize customer data and past purchase behavior to offer personalized product recommendations.
By understanding their preferences, businesses can suggest relevant add-ons that resonate with customers, increasing the chances of cross-selling success.
Offering additional services
Enhance the customer’s primary purchase by presenting supplementary services that complement the product.
For instance, if a customer buys a laptop, propose tech support or extended warranty services to enhance their overall experience and provide added value.
Capitalize on the moment of purchase decision by displaying in-cart recommendations.
Presenting complementary products at this critical stage can prompt customers to consider additional items, increasing the average order value.
After a successful purchase, continue cross-selling efforts with post-checkout offerings.
Leverage order confirmation emails or post-purchase pages to suggest related items, enticing customers to explore more and fostering customer loyalty.
Incentivize customers to embrace cross-sell opportunities by offering enticing discounts on related products.
Time-limited or exclusive deals create a sense of urgency, motivating customers to take advantage of the cost-saving benefits.
Create attractive product bundles that combine related items into a convenient package.
Bundling simplifies the shopping experience for customers and encourages them to purchase more items, leading to increased sales and a higher perceived value.
When a customer adds a product to the cart, display an Added to Cart pop-up to recommend you upsell products.
By presenting higher-tier or upgraded versions of their selected products can tempt customers to consider more valuable options, leading to increased sales revenue.
Utilize the cart page as a prime location to showcase your upsell suggestions.
By offering related, premium products at this crucial decision-making point, businesses can entice customers to upgrade their purchases and enjoy enhanced features and benefits.
Even after a successful purchase, continue upselling efforts with post-checkout offerings.
Utilize confirmation emails or post-purchase pages to present customers with additional, upgraded options, enticing them to reconsider their purchase or note them for their next purchase.
To incentivize upsells, consider offering exclusive discounts on higher-tier or bundled products.
These limited-time deals create a sense of urgency, motivating customers to upgrade their purchases and take advantage of the cost-saving benefits.
3 Best Magento Store Extension For Cross-Selling vs Upselling
Magento 2 Frequently Bought Together
Magento 2 Frequently Bought Together is an incredible practice of cross selling vs upselling. It is a very interesting way of showing upsell products to your customers.
The Frequently Bought Together section is a product recommendations section that shows products that are often browsed and purchased by other customers.
Using this module, you can promote products under the label “Frequently Bought Together”.
Better yet, after installing, the AI algorithm will automatically take care of the FBT section for you.
And it also supports adding multiple products of the ‘frequently bought together’ list.
- Add frequently bought together block to the product page
- Enable setting frequently bought together list from related, cross-sell, or up-sell products
- Automatically track products commonly bought together from real orders in the purchase history
- Display frequently bought together products in a convenient slider
- Easily customize the display of frequently bought together list
- Allow customers to add all frequently bought together products to the cart
Magento 2 Customers Also Bought/Also Viewed
Customers Also Bought/Also Viewed is an additional extension that recommends to customers the most relevant products when they are checking an item.
It will automatically display product suggestions to customers based on records from real-view browsing and purchase actions.
The admin can also set rules or conditions to recommend related products.
- Display relevant products in Customers Also Bought/Customers Also Viewed widgets
- Automatically apply customers’ purchase data
- Customize product suggestion rules
Magento 2 Free Shipping Bar App
Magento 2 Free Shipping Bar App is another great app for cross-selling vs upselling. It allows you to apply the free shipping strategy beautifully.
First of all, this module enables you to set the minimum cart total to get free shipping.
But what makes it the best is that this module allows you to display a free shipping bar showing the progress towards the cart goal to reach free shipping.
You can display this free shipping bar on any page of your website ( homepage, product page, category page, cart page, checkout page, etc.)
- Display a free shipping bar to show the cart amount left until free shipping
- Auto-update the current cart total and the remaining amount
- Allow setting free shipping amount and message for each store view and currency
- Display free shipping bar on multi-page: homepage, product page, checkout page, etc.
- Include tax in the displayed subtotal on the message bar
- Show success message when customer’s order reaches free shipping amount
- Allow customizing fonts and color of the free shipping bar and success message
In conclusion, a well-crafted cross-selling vs upselling strategy can propel businesses toward unparalleled success.
By implementing these tactics with care and precision, companies can not only drive revenue growth but also forge lasting connections with their customer base.