While it’s an incredible accomplishment to convert a potential customer to a paying customer, the job of an e-commerce business doesn’t stop there. In fact, it’s only just begun…
In other words, the goal isn’t only to increase one-time conversions, it’s to turn those one-time conversions into lifetime ambassadors of your brand or business, ultimately capitalizing on the revenue potential of a given customer.
Although there are several marketing strategies and sales tactics that can be employed to accomplish such a feat, two of the most popular are upselling and cross selling.
With that said, in what follows, we’ll be taking a deep dive into the world of e-commerce sales, particularly via the lens of upselling and cross-selling. More specifically, we’ll define each of the two strategies and outline their key differences, while also providing examples throughout.
Finally, we’ll share some key tips on how YOU as an e-commerce business can succeed at executing such a sales strategy… Need help? Continue reading!
The reason many confuse upselling and cross-selling is that they both share the same or similar intent. The difference, however, is primarily in the strategy, or approach, if you will, that you use to achieve said intent.
The good news is that though it may be confusing at first glance, by examining just a couple of real-world examples that you as a consumer have likely experienced in the past, a better understanding of both will be accomplished.
While both share distinct differences and offer opposing benefits, they can, in fact, be used in tandem for the best results! Before getting into the examples, however, let’s first clearly define each!
Upselling and its Definition
Simply put, upselling is the calculated act of appealing to an already paying consumer, encouraging an add-on that is likely to complement, enhance, or make superior in some way, their initial purchase.
Upselling isn’t to be confused with the encouragement of additional product purchases. That, you’ll learn, is cross-selling. Instead, it employs a convincing comparative approach that tends to both educate, inform, and ultimately encourage a superior, more expensive version of their initial purchase.
In order to avoid coming across as “pushy” or “sales-y” from a business standpoint, it’s important to clearly outline the value, whether real or perceived, that the consumer is getting for the higher purchase price.
Cross-Selling and its Definition
Conversely, cross-selling is the calculated act of appealing to an already paying consumer, encouraging an additional purchase in conjunction with their initial purchase.
Unlike upselling, cross-selling doesn’t employ a comparative approach. Instead, it employs a relevancy approach that tends to appeal to temptation and logic. With that said, a successful cross-selling campaign will result in larger order carts compiling similar and/or complementary products.
An unsuccessful cross-selling campaign, then, is one that fails to increase order size due, in large part, to promoting and encouraging the purchase of irrelevant and uncomplimentary products.
Upselling and Cross Selling Examples
Whether you’re privy to it or not, upselling and cross-selling take place on a daily basis in many different mediums; from casual conversations and apparent “recommendations” to automated email marketing reminders and e-commerce promotions.
More often than not taking place at the point of purchase, upselling and cross-selling strategies are used as a mere final ditch effort to increase the value of purchase.
Below are some common real-world examples to help you gain a better understanding of both…
Upselling an Upgrade
In this first example, we use arguably the largest e-commerce platform to illustrate just how a successful streamlined upsell takes effect. While it doesn’t use a tangible product but rather a digital service, the strategy itself can be carried over to any e-commerce business.
Consider that you’re a new business seeking to create your very own e-commerce online store. Deciding on which platform to choose, you ultimately land on Shopify. In the beginning, your initial intention is to begin with their free trial; not only will this allow you to try the platform at no risk but it’s free!
Proceeding to sign-up, however, you receive a notification of their other tiered plans, all with different prices and added features. Upon further analysis of this information, you learn that you’ll end up saving on your annual fee if you choose to pay for the middle-middle-tiered plan today; so, while you’ll certainly be paying more upfront, the value, in the long run, convinces you to move forth.
Congratulations, you’ve just been upsold!
The Fast-Food Frenzy
In this next example, we outline a classic everyday example of a casual brick-and-mortar cross-sell. While this may not be directly relevant to the function of e-commerce strategies, it’s a great easy-to-understand example of the intention and approach behind a cross-sell.
Consider that you’re on your lunch break, in a rush to get back to your 1 o’clock meeting. For the sake of time, you pay a visit to the McDonald’s drive-thru… As you always do, you proceed to checkout and order the BigMac meal with a medium Pepsi and small fries.
The cashier kindly takes your order and, in passing, asks if you’d like to add a dessert for an extra $2.99. On the spot, you think to yourself “$2.99 for two cookies?! Of course!”… The cashier proceeds to add the cookies to your order.
Congratulations, you’ve just been cross-sold!
Final Word of Advice
As an e-commerce business looking to implement an upselling strategy, cross-selling strategy, or both, there are a few important considerations to take into account in order to ensure success.
While this advice deserves an entire article of its own, we’ll proceed with a quick summary for your perusing…
First, you need to know your audience. Next, it’s imperative that you map out your buyer’s journey; while it’s likely to vary, a general understanding will help tremendously. Third, upselling and cross-selling are all about solving problems and providing solutions. Take some time to consider the most pressing problems of your consumers and present solutions that help both them and your business’s bottom line.
Finally, while selling involves a lot of action on your behalf, it’s just as important to listen; it may just result in the identification of a potential opportunity for an upsell or cross-sell!