Cross-selling and Upselling: What Are They?

Nowadays, eCommerce companies have many techniques to increase their sales. So, if you have a store, you have probably wondered which marketing and sales strategies are the most appropriate.

Among the most commonly used marketing tools are Cross-selling and Upselling. Both techniques focus on providing additional value to customers, rather than limiting them to products already found.

Their business objective is to increase order value and inform customers about additional product options they may not yet be aware of. Its success lies in truly understanding our customers’ needs and then responding with products and features that meet those needs.

It's important to know the differences in order to decide which strategy to implement. One approach may be more appropriate than another with different customers, so you have to know how to differentiate them.

If you want to know what is the difference between them and in which cases to use them, continue reading the article.  

Cross-selling & Upselling in which cases to apply them?   

Cross-selling

Cross-selling is a recommendation tool that consists of offering a customer related products that are complementary to the product the customer wants to buy. In this case, the goal is to motivate your customer to add an additional item to their original order.

Cross-selling identifies products that satisfy additional and complementary needs that the original item does not satisfy.

Often, it suggests products to users that they would have purchased anyway. So, by showing up at the right time, a store is sure to close the sale.

When a customer adds an item to their cart or initiates the checkout process, they implicitly tell the company that they are intend to buy. It is at this point in the buyer’s cycle that companies will often look to implement a cross-sell.

Since most customers are ready to make a purchase at this step anyway, are more likely to make a last-minute impulse purchase. For example, if a customer is about to buy a smartphone, there’s a much better chance that they’re willing to also buy a pair of headphones or a phone protector if it’s a good deal.

In eCommerce, cross-selling is often used on product pages, during checkout and in lifecycle campaigns. It is a highly effective tactic for generating repeat purchases by demonstrating the breadth of a catalog to customers. 

Cross-selling can alert users to products they previously didn’t know you offered, further gaining their trust.

Upselling 

Up-selling is a method of recommendation that is generated with the purpose of persuading a customer. In this case, clients are encouraged to purchase a more sophisticated or modern and more expensive version of the product they originally intended to buy. 

Upselling occurs at the part of the buyers’ journey where they have added something to their cart or initiated checkout and are more receptive to final sales efforts.

Since the customer has likely already researched the product, they may have already considered the upgrade or add-on, which should increase the likelihood that they will ultimately decide to make the switch at the last minute.  

Upselling often employs comparison tables to market higher-end products to customers. Showing visitors other versions or models that may better meet their needs can increase the average order value and help users leave more satisfied with their purchase. 

Companies that emphasize upselling are effective at helping customers visualize the value they will get from ordering a higher-priced item. For example, imagine a customer is looking for a computer. To apply the up-sell, we could suggest a more up-to-date computer model than the one the customer wants, presenting the advantages and benefits.

Cross Selling vs Upselling

Upselling can be up to 20 times more effective than cross-selling. This is because it is easier to sell the customer something related to what they have already bought than to sell them something completely unrelated. 

Both strategies are carried out in the intermediate and late stages of the conversion funnel, where the customer has already indicated that he will make the purchase. Moreover, these tools promote products that are similar to the item the customer plans to buy. 

The two strategies are essential to improving average order value and profitability, and can often be used together. However, each will have different impacts on your business.

Your business model will determine which of these strategies will make the most sense.

Now that you know how cross selling and upselling work, it’s time to put them into practice.

CONCLUSION

Using cross-selling and Upselling are invaluable strategies for expanding your clients’ carts and increasing income. For these approaches to work, you’ll need an eCommerce platform with the functionality to implement them. 

Adobe Commerce provides the tools you need to generate cross-selling and upselling campaigns that convert. Get a free consultation on these features for both Adobe Commerce and Magento Open Source.

Take full advantage of all the tools Adobe has to offer and start increasing your sales!