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What’s the Distinction Between Upselling & Cross-selling?

Sailun Tires

Hardly anyone questions the benefits of marketing and its specific methods for increasing the profits of companies. However, the interpretation of both marketing itself and its tools determines what forms they will take in the activities of particular companies. Clarification of what is upselling and cross-selling should be among the first activities marketers make in advance to develop a strategy for boosting a company’s income.

Broad and Narrow Definition of Marketing

If we talk about the general idea of ​​marketing, then it can be defined as the promotion of goods or services for the purpose of making a profit. However, if we take more specific definitions, they directly indicate what needs to be done for this. Such definitions state that marketing is based on the study of market needs. Promotion of goods and services that are outside these needs becomes difficult.

Does this mean that the manufacturer and the seller are confined within the strict limits of demand, and no new products can enter the market? Not at all. If you know the principles of upselling and cross-selling, you can push the limits of consumer demand.

How to Distinguish Between Upselling and Cross-selling

Both techniques aim to increase the seller’s profit, but they do it in different ways:

· Upselling: increasing the cost of a purchase

· Cross-selling: increasing the number of purchased goods

Let’s clarify this with an example. Imagine that a customer comes to your electrical tools store for a conventional drill. He requires a basic drill for DIY work, so he could sometimes drill a hole in the wall.

· If you manage to convince him that he needs a more modern drill, such as one that remembers the settings from previous jobs, you will sell him a more expensive drill. This is called upselling.

· If you can convince him to buy an extra set of drill bits for more complex repair efforts, you’ll realize cross-selling.

Base Your Upselling and Cross-selling on Market Research

The deeper your knowledge of the market, the more accurate marketing tools will work:

· knowing the preferences of consumers and what products are sold in pairs, you can easily select kits for package sales

· by studying the qualities that consumers value most in a particular type of product, you will figure out what to stress when upselling

For example, after conducting market research, you found out that the most important characteristics for buyers of vacuum cleaners are power, multifunctionality, and weight. Then, when upselling, you will sell more advanced products precisely in relation to these characteristics. On the other hand, if you focus on less significant indicators, such as the shape or quality of the brushes, you will achieve less success.

In cross-selling and bundling, this implies that you offer complementary products. For example, when buying a ski suit, it is natural to offer quality thermal underwear. If you offer a swimming cap, you will hardly be able to increase sales.

How to Convince the Buyer When Selling Online?

Selling goods in retail stores involves the possibility of personal communication with the buyer. This means that you will be able to use various psychological tools to increase sales, such as persuasion, contagion, and others. But what if the purchases are made online in the absence of direct contact? How to stimulate the buyer to expand his consumer basket? The mechanism is quite simple:

· in case of cross-selling, offer related products on the ordering page

· when upselling, demonstrate more advanced models of purchased goods as bestsellers

Try to put all products on one web page and avoid pop-ups. Compulsion is damaging for both upselling and cross-selling.

Do the Upselling and Cross-Selling Principles work in the Service Industry?

When conducting services, the techniques of upselling and cross-selling also allow you to increase profits:

· offer a more advanced service while upselling

· propose additional services when cross-selling

For example, a customer contacted a computer repair shop to help fix a problem. When performing this service, draw his attention to the fact that there are additional weak points in his device. If he does not improve something now, repairs can be more expensive if it breaks down. This is how cross-selling works.

If you work in a dental office and a client has asked for a cheap dental crown, talk about its disadvantages and the advantages of a more expensive option. So you will get additional profit on upselling.

Additional Techniques for Increasing Sales in the Service Industry

Also, when working in the service industry, you can use additional methods to increase consumer interest in more complex services through upselling:

· design tariff plans outlining the benefits of more comprehensive ones

· offer a demo version of more advanced functionality

With cross-selling, an interesting mechanism is the dilution of the services provided by several companies and mutual advertising of each of them. For example, your company may offer a broad list of services. Divide them into 3 blocks and make a separate firm for each of them. In this case, you will achieve more in cross-selling than if you offer to use some other additional service of your single company.

Connect Products and Services for Upselling and Cross-Selling

A well-proven modification of upselling is the combination of goods and services in the sale. Supermarkets often take advantage of this when they sell electrical items. Offer insurance for more years in addition to the standard warranty period. With a successful deal, your profit will increase.

And vice versa: when providing a service, offer an additional unique product that will help the client to keep in perfect state whatever he came to you with.

The more inventive you are when developing marketing strategies, the more opportunities will open up in the process of implementing them. And then the stories of millionaires who made their fortune, starting with the sale of paper clips, will not seem surprising to you. They have built their fortunes based on increasing upsellings. When the consumer raises his demands for more advanced product models, the seller’s offer also increases. The path from selling paperclips to selling yachts is covered by upselling.


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