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What is the Difference Between Cross-Selling and Upselling

What is the Difference Between Cross-Selling and Upselling

Chetna Sabharwal
Chetna Sabharwal
November 18, 2022
•
5 min read

Getting to a destination that you frequently drive to is a total breeze. You know your exits, a bunch of shortcuts, and peak traffic hours (pronounced hours to avoid). You save a ton of time on the road because of all your background knowledge.

Street smart for realsies!

Cross-selling and upselling are based on a similar principle - where you sell smart. These sales techniques use the knowledge of familiar places - or in this case, existing customers - to maximize profits and minimize efforts.

Existing customers already know your brand and trust your services. As a result, you can leverage insights from their purchase history and buying behavior to recommend additional products or higher-value products. 

On the other hand, dealing with new customers means starting afresh. This is the equivalent of planning a journey to unchartered shores. One wrong turn, and you might not reach your destination altogether. 

Face-palms, anyone?

Cross-selling and upselling achieve the same goal: they boost customer lifetime value. Although they use the same fundamental principle, there are a handful of differences between the two concepts, and these distinctions dictate their use cases. Let’s dive into each concept to get a handle on the distinctions between the two sales techniques. 

What is cross-selling?

Cross-selling refers to selling an attractive basket of products to your customers instead of selling a single product.

Imagine this: A customer walks into a pizza place and orders a spicy pepperoni pizza. A clever waiter takes his order and also maneuvers the customer’s attention towards a mint virgin mojito on display. The customer is intrigued by the price. The clever waiter might chime in, saying that a mint virgin mojito would go perfectly with the pizza that the customer has chosen. 

Bon appetite.

The customer bites and orders both. The simple, almost effortless act of drawing attention to an add-on has allowed the pizza place to improve its sales.

Cross-selling strategy works by bundling complementary products (note that we said complementary and not complementary) with the initial purchase made by a customer or the main product desired. You have the advantage of knowing the interested buyer and clearly, they already trust your brand. You don’t have devote time to preparing buyer personas, generating leads, and steering your customer through the entire sales pipeline. The customer is already at the end of the pipeline; you just have to work your magic of persuasion to sell additional items.

Let’s look at a couple of examples to understand the different ways of using cross-selling strategies.

Cross-selling examples to mimic and personalize

With a few minor modifications for context and sector, you can maximize cross-selling using these examples for inspiration. 

Amazon

ECommerce business giant Amazon is an ace at cross-selling. When you add an item to your cart or open a product page, the site makes recommendations under the section “frequently brought together...” This is how Amazon uses a cross-selling strategy to increase sales while satisfying a customer’s need.

In-store

A customer visits your store and tries on a dress. The salesperson can throw in a pair of earrings or shoes that will go with the dress. They don’t precisely need these, but looking at a perfect match, the customer may want to buy a pair of earrings.

What is Upselling?

A customer is deadset on a product; they want nothing but a 55-inch television. Your sales rep tried pitching discounts on complementary products, but the customer did not budge. They haven’t come to shop around. How do we improve sales and increase the lifetime value of this customer?  

Upselling is the sales strategy you are looking for. It is like an upgrade from the original purchase. You offer the customer another product that is slightly more expensive but comes with more features and better functionality. Instead of bundling products, you are making the initial purchase better.

Customers are often attracted by this sales technique because it promises far more value for a marginally higher price.

How about that technique?!

When you visit an OTT website like Netflix or Mubi, then you must have seen that when you want to buy a subscription, then the site shows you a comparison chart. You can either go for a monthly plan, a yearly plan, or a premium plan. Each plan has some distinct features you can use the application on multiple devices. You can see how the value is being added as the plans become more expensive and what they would miss if you chose a cheaper plan.

Now that you have understood the upselling strategy let’s take some examples to understand this concept further.

Some upselling examples

Amazon

When you land on a product page on Amazon’s website, you will see that a comparison chart appears at the bottom of the page.

Search for a 55-inch television. Whichever brand you select, Amazon will suggest a chart of with more expensive versions of the same television that boast better functionalities like enhanced resolution, more speakers, and other features.

In-store

A customer wants to buy wallpapers for his house at a local store. The salesperson in the store suggests they buy one that has better durability.

Another customer in the same store another customer comes to buy a bedside clock. The salesperson encourages them to buy the other clock that offers weather forecast, or one that doubles up as a reading light. 

Aaannnddddd… sold! 

We have understood the two sales techniques separately. Let's now put two and two together to evaluate the key differences between cross-selling and upselling.

What’s the difference between cross-selling and upselling?

  • Upselling and cross-selling both approaches increase your sales revenue but in slightly different ways. In upselling, the customer has already decided which product to buy the salesperson tries to sell a more expensive version of a product to the customer. As opposed to upselling, in cross-selling, the salesperson tries to bundle the original purchase with complementary products so as to increase the number of items sold. In both sales techniques, the output is the same - an increase in the total sales value.
  • In cross-selling, the customer spends more on related products to get a complete solution around their need. For example, if you search for an Apple iPhone 11 on Amazon, it will suggest earphones and charges that you can buy along with the phone. In this way, all your needs around your purchase are fulfilled. But on the same product page, if Amazon suggests getting buy iPhone 12 or another version, then by putting in more money, you can get a better product with increased longevity.
After all, it seems like a good deal.
  • The overall value of sales is increased when you incorporate a cross-selling strategy but in the case of upselling sales strategy, the actual value of sales is increased.
  • In cross-selling, you need to sell a bundle of the connected items that complements the initial purchase. But in upselling, you offer better features and functionality with the same product.
  • Cross-selling increases both, the average purchase value made by a customer and the average sale per customer. But upselling increases only the average purchase value made by a customer.

With the difference cleared up, let’s quickly glance at the advantages of the two strategies.

And proceed to checkout!

Advantages of cross-selling and upselling

  • Cross-selling and upsell sales strategies boost your revenue as the average sale per customer is increased.
  • Increased output from sales efforts. The customer ends up spending more on a complementary item or a more expensive product.
  • A strategy like cross-selling provides a complete solution, wins the customer’s trust and improves retention.
  • Both strategies provide customers with discounts and incentives and consequently increase customer loyalty.
  • Cross-selling and upselling improve the overall customer experience, as recommendations are based on their personality and behavior.

Add Wingman to your cart

Cross-selling and upselling are integral parts of your sales process. You cannot miss either. Both of these sales techniques require a thorough understanding of your customer's needs. If you don’t know what your customer wants, then how will you be able to suggest better or new products?

Understanding your prospect’s needs has never been easier than with Wingman. 

Wingman is an AI-driven sales intelligence platform that improves your sales team’s soft skills and gets critical information from your customers.

Wingman records and stores all your sales calls so that you can develop actionable insights from your own calls and the calls of other members of the team. It also creates customer profiles on the basis of the sales call so that you have a ready reference the next time you call. Your sales Wingman also tells you when to talk and when to stop during a sales pitch. In addition, you get prompts to improve objection handling and upselling: Is it time to offer complementary items or more expensive products? Know when to cross-sell or upsell. Wingman guides you using live, in-call prompts. For sales managers, metrics produced during sales calls help to evaluate performance and determine where training is needed. 

Just like Barney, Wingman always has your back.

Use every interaction with your prospects and existing customers to your advantage. Experience Wingman’s benefits with a free demo. Book now!

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