Cross-selling
and up-selling
Cross-selling
is the action or practice of selling among or between clients, markets,
traders, etc. or the action or practice of selling an additional product or
service to an existing customer. This article deals exclusively with the latter
meaning. In practice, businesses define cross-selling in many different ways. Elements
that might influence the definition might include the size of the business, the
industry sector it operates within and the financial motivations of those
required to define the term.
The
objectives of cross-selling can be either to increase the income derived from
the client or clients or to protect the relationship with the client or
clients. The approach to the process of cross-selling can be varied.
Up-selling is
a sales technique whereby a seller induces the customer to purchase more
expensive items, upgrades, or other add-ons in an attempt to make a more
profitable sale. Up-selling usually involves marketing more profitable services
or products but can also be simply exposing the customer to other options that
were perhaps not considered previously. Up-selling implies selling something
that is more profitable or otherwise preferable for the seller instead of, or
in addition to, the original sale.
The
difference between up-selling and cross-selling are fairly nuanced, which is
why many sales reps and marketers talk about cross selling and up-selling as a
single discipline. Philosophically, when sales reps up sell, they convince your
customers to increase the value of their orders (both to you and to them) by:
- Moving up
to a more expensive version of what they're already considering purchasing
(e.g., the six cylinder vehicle instead of the four cylinder, upgrading from
economy to business class for a flight, a 42” TV instead of a 40”)
- Adding to
their orders with additional vertically related products or services (e.g., "Would
you like fries with that?", extended warranty, DVD player to go with the TV,
paper to go with a printer, a hands free car kit to go with a mobile phone)
Vertically
related are products or services that enhance or are related to the core or
base product. A cross-sell refers to sales of another product/service type
horizontally related (i.e., another type of product/service usually
orthogonally related if at all) to what you're already considering. For
instance, when one purchases a new vehicle and the car salesman encourages the
buyer to use the manufacturer's auto financing capabilities... Another cross
selling example is when one calls the reservation centre of an airline and at
the end of the call the agent asks if buyer needs a rental car at the destination,
and if so, he/she would be delighted to connect him/her to one of their car
rental partners.
How to up-sell
A little
not a lot
Up-sell
works better when there’s only a small difference in price between the item
that you’re suggesting your customer purchases and the product they’re looking
at. Otherwise it can be as successful as convincing someone who’s taken a
second hand Toyota Corolla for a test drive that they should purchase a Porsche
instead.
Match key
features
Up-sell
works best when the key features of the product are kept the same.
Be brand
aware
For some
products, a customer considering a particular brand is more likely to up-sell
to products by the same brand. This is relevant for cross sell as well. Sure,
that Canon lens does fit the model of Sony camera your customer’s looking at,
but they are much more likely to purchase a Sony lens for their Sony camera. If
they’re considering a Nokia phone you’ll probably have more luck up-selling
them to the next model up also by Nokia.
Benefits
count
When trying
to persuade your customer to spend more, make sure you clearly spell out the
benefits of upgrading from what they were originally considering.
How to cross-sell
Choose
carefully
Certain
products work better than others for cross-sell. Think like your local
supermarket.
Watch the
price
Cross-sell
works better when the suggested items are half price or lower than the item
being purchased.
Relate
Products
that naturally go together work better for cross sell.
Higher
price
Cross sell
tends to be more effective when the original product is higher priced or
requires more thought. Cross sell is less successful when trying to convince a
customer to spend extra when they were going to buy a lower cost item.
