If you’re in business, you’re selling something. That’s true if you sell widgets door-to-door or your only product is yourself. While competition has always been a business reality, the era of the Internet ushered in an international market. You can buy an eBook from someone in Saigon, Capetown, or Mumbai, and pay the same amount. (The payment value to the seller can vary, but that’s an article for another time!)
When you’re competing with the entire world to succeed, it’s all about maximizing every opportunity, expending the least amount of energy. It sounds simple enough, right?
With a cross sell or upsell, it is simple.
Cross Sell vs. Upsell: What’s the Difference?
To cross sell is to present an additional product to an existing customer, or offer a package deal with at least two distinct products. There should be some relationship between your products, of course. For example, when you sell pots and pans, a crossover opportunity might entail an offer of table linens or stainless flatware. They’re independent lines, yet share a relationship. In terms of services, you might cross sell website work with copy editing, or SEO with content production. They are separate services, yet dovetail in application and the right customer wouldn’t hesitate to cross into buying them.
One international company packages home repair services under their umbrella. Each service fills a distinct niche – plumbing, electrical, and HVAC – yet the parent company ties them together with a home warranty package crossing all three business lines. When a client calls for plumbing services, they may also be cross sold a tune-up on their air conditioner, or a repair plan encompassing all three lines of business.
An upsell is narrower in spectrum. If your client has hired you to build them a website, for example, an upsell would be an offer to maintain that same website. It exists in direct relationship to the original product. An upsell is taking product A and offering a value increase by taking the deal to product A-Plus. An artist might upsell by adding a frame to the just-sold painting. A copywriter might upsell a package of three articles in lieu of a one-off project. A car salesman will upsell to model XYZ, the more expensive version with booming stereo and custom rims.
Why Upsell? Shouldn’t I Diversify?
To upsell is to take your buyer to a better place as soon as they’re getting started.
“Would you like fries with that? Do you want to supersize your order for only $1 more?” Upsells are common throughout the online and offline world.
Cellular services excel at the art of upselling. When a phone company talks to a customer, whether a new or existing one, they only get a few minutes. You’re already talking with them about their products. A typical customer looks at the cheapest everything: the cheapest phone, the lowest cost plan, the shortest length of contract. The customer’s gut instinct is to go for whatever has the lowest immediate hit to the wallet.
If you’re not using an upsell tactic with your customer, you’re leaving money on the table.
The cellular representative is going to encourage your buyer to get a better phone and a better plan, and present it as a benefit, maybe even an imperative. It’s more money for the phone company. If done right, an upsell is a better overall experience for the customer, too. Very few people are happy with no-frills products. Most buyers arrive with the expectation they’ll be offered something better, and even the most adamant will often purchase at least one or two tiers over what they originally planned. The right upsell techniques create a win-win situation for all concerned.
Here’s a quick example: If you’re selling a 4-person camping tent that offers 70 square feet of tent floor space, a great upsell would be to offer a 6-person tent with 100 square feet of tent floor space for only $30 more. Even if they don’t need room for extra people, it’s easy to sell a buyer on the fact that more space means more comfort, and at such a great price it would be hard to say no.
Upsells work exceptionally well when used as a one-time-offer, which are a common part of marketing funnels. We’ll get more into one-time-offers in another post, but keep in mind that adding true scarcity to an offer makes it much more compelling and can boost conversion rates.
Why Cross Sell? Why not stick to one thing?
It’s always easier to sell to someone who’s already bought from you. That’s the definition of a cross sell.
Cross-selling is nothing new, people have been doing it for ages because it works (when done correctly).
The concept behind Apple Inc. is a perfect example of how & why to cross sell:
Apple epitomizes “Work smarter, not harder.” Monster-level corporations understand that by reaching out for repeat customers, sales are a slam-dunk. Repeat buyers bring in more money, with less effort than new buyers. Big names diversify within their line, building on brand familiarity. Internal diversification creates opportunities to cross sell.
How many people buy two or three laptops at a time? It happens, but it’s rare. Most laptops are a big investment, replaced only when the machine breaks or becomes obsolete.
Apple understands that. It continues to build their flagship computers, but branched off to product iPods, iPhones, and iPads with resounding success. Each of those products became a new must-have for Apple’s existing customer base. At their heart, the iPhone and iPad were still Apple technology, yet they were different enough that it was feasible for someone to come in and buy all three products at once: a MacBook, an iPad, and an iPhone.
An even clearer example of a more direct cross-sale could be: a user goes to purchase a smartphone through a website. Right after they click the “Buy” button, and before they enter their information to finalize the transaction, they’re hit with an offer directly related to their purchase, such as a wireless charging station for their new phone.
Bundling a Cross-Sell Offer
A great way to capitalize on cross-sales is to offer a bundle that includes the item your visitor is about to purchase, along with related, useful products thrown in at a discount if they purchase all the items together.
This can help boost cross-sale conversion rates because the user was already going to buy the primary item, and they are likely to have at least some interest in your cross-sale offer(s)–as long as they’re relevant–so giving them the chance to save more while getting more is a no-brainer.
When you cross sell, you maximize and streamline profits from each buyer.
“Soft” Cross-Sells & Upsells
Instead of trying to push a related offer or trying to upgrade an order by hitting a customer with an offer page after they’ve hit the purchase button, you can also try suggesting other similar products or complimentary products by displaying them near your primary offer, with phrases that build social proof, such as:
“Customers who purchased this also purchased…”
“Customers who viewed this item were also interested in…”
And so on. If you’ve ever shopped at Amazon, you’ve likely noticed this tactic, and they may have even convinced you to bundle and by more than initially planned using this exact same tactic.
Timing is Everything
If you’re going to implement cross-selling & upselling into your marketing funnel or sales process (you should), it’s important that you present these offers at the right time.
If you’re selling something on your website, the ideal time is generally right after they’ve committed to purchasing an item, and before they enter any payment information.
If you’re offering something for free in exchange for personal information (a lead magnet), the thank you/more information page right after they submit is the perfect chance to try and sell a mid-priced item. This is often referred to as “tripwire marketing,” and can be very effective when executed properly–it’s also a great way to break even or potentially turn a profit on lead generation efforts so you can build your list without losing money to acquire new leads. However, I’m not a huge fan of the term “tripwire,” but we’ll save that for another post when we get more into creating effective offers.
The Cross Sell & Upsell: Branding Nirvana
With either sales approach, whether using a cross sell or an upsell, it’s about building your company’s value in your visitors’ and buyers’ eyes. It simultaneously capitalizes on and builds the brand. Those are benefits beyond the inherent monetary value of the immediate sale, though increasing the average transaction value is definitely a primary goal.[callout font_size=”13px” style=”bluegrey”]Always Remember: Most people build relationships with brands, rather than products.[/callout]
By building a great brand, you unlock potentials unreachable by any other means. The only way to build a brand is to sell more than one level, and more than one product. The only way to achieve that goal is by doing two things: cross sell and upsell.
Upselling & cross-selling are both important steps to take in your marketing funnels if you want to maximize customer lifetime value. It’s important to always remember that your goal is to help your customers and potential clients, so be sure to use upsells & cross-sells when they make sense, but don’t try to force them. Providing these types of offers can help guide your customers to making purchases that will benefit them and save them time; abusing this is transparent and can turn customers away before they ever complete the checkout process.