Customer acquisition is at the core of every business. Whether you do physical retail, offer a service or sell B2B SaaS software, without customers, no business is possible.
The problem is that finding new customers is really difficult. Most companies these days spend a lot of money on digital advertising, engage in cold-calling and try to piece their network together.
At the same time, there are existing customers who already like you and are committed to buying from you. Chances are, you haven’t maximized their ability to pay and can offer them some of your extra services or products they might not have even known about.
That’s why savvy business owners say that “the sale doesn’t end” with the agreement of purchase.
So let’s explore two popular ways to increase revenue from your existing customers: upselling and cross-selling.
Skip ahead:
- What is upselling?
- What is cross-selling?
- What’s the difference between upselling and cross-selling?
- The best examples of cross-sells and upsells
- Effective cross-selling and upselling strategies
What is upselling?
Upselling means offering your existing customers (or about-to-be customers) a higher-end version of your product or service. Which in turn, boosts revenue too.
It’s not about charging more for nothing — upselling is meant to persuade your customers that their needs and goals would be better met with a version of a product or service that costs more.
In SaaS products, for example, upselling is often represented with more expensive tiers that give customers extra features. In traditional retail, it can be persuading the customer to purchase a more expensive version of the product (e.g. a car with alloy wheels and a surround-sound audio system).
As a result, upselling increases the average order value, which has a direct impact on your bottom line, even if the number of customers stays the same.
What is cross-selling?
Another popular strategy to increase revenues for your existing customers is cross-selling.
When you cross-sell products, you offer your customers additional items and show them product recommendations that are complementary to what they already have.
If you’ve seen “this item pairs well with…” sections in various online stores, you’ve seen cross-selling in action. In a way, cross-selling is seeing all products as bundles that could be sold together, rather than stand-alone SKUs. Often these bundles are also discounted, such as when you get internet and cable TV from the same provider.
You can, in fact, use both a cross-sell and upsell strategy at the same time — offering a more expensive product while suggesting some additional products that would make it even better!
What’s the difference between upselling and cross-selling?
While cross-selling and upselling resemble different approaches, they really have the same goals: to provide more value to your existing customers while increasing the revenue you get from them.
The difference between the two is that upselling is offering a premium version of the same product, while cross-selling is about offering additional products to go with the one you’ve already picked.
If you’re not sure whether to use upselling or cross-selling, do both and look at the data. For some companies, it’s more profitable to upsell if more expensive products have much better profit margins and their customers can afford it. For others, cross-selling works better because customers buy lots of items around the same price point all the time.
Learn more about brand extensions used in cross-selling
The best examples of cross-sells and upsells
As soon as you understand upselling and cross-selling, you’ll start seeing it everywhere.
Amazon has been a champion of cross-selling for a while, with their “Buy it with” category that’s always highly visible and that allows you to buy all the suggested items with one click.
Car dealerships, on the other hand, are very skilled upsellers. It’s practically impossible to leave the car lot with the same configuration you expected at the beginning.
Even fast-food restaurants are upselling experts. Have you noticed how a large drink can be double the size of a medium one but only cost 50 cents more?
Effective cross-selling and upselling strategies
If you’re interested in implementing cross-selling and upselling strategies in your business, start with a book titled How to Upsell and Cross-Sell to E-commerce Customers. The authors write:
Upselling is not about finding new customers, instead, it’s about increasing the average order value or AOV of a lead you’ve already converted.
The last word is key. You want to make sure you’ve already converted the potential customer before you offer upselling or cross-selling suggestions. Otherwise, you might alienate them with too much choice and too many product pages, decreasing your conversion rate as a result.
But if your lead is still a lead, you can be selling products to them that work better together through personalized emails, for example. We’ve already written the exact guide on how to do that before.
Another way to upsell leads is to turn them to subscribers and customers through your blog, whether it’s selling services, digital products or even online courses.
How to upsell your online course
One of the most successful digital content offerings that can be upsold today is an online course.
Whether you run a blog, an agency or a product company, you can share your niche knowledge with others through an online course and get paid for it! All you need to start is a capable online course creation platform.
Thinkific is an intuitive online course builder that doesn’t require you to know any programming skills to create and sell your course online. This platform is easy to experiment with and features a simple (but powerful) drag-and-drop editor as well as hundreds of professionally designed templates you can leverage at any time.
In addition, Thinkific offers you all the tools you need to sell your online course to others, including creating a membership community.
Looking to start upselling or cross-selling your offering?
Download our Ultimate Customer Success Guide to take the first steps.
Reference: How to Upsell and Cross-Sell to E-commerce Customers: Learn Upselling Techniques As Well As Why Cross-Selling Is So Important. (n.d.). (n.p.): ARX Brand International LLC.
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