We Found the Easiest Ways to Increase Your Revenues – Upsell vs Cross-sell
All businesses have the opportunity to increase the average spend per customer using two simple strategies: Cross selling and Upselling. If a person intends to purchase one of your products, then you have already done the hard work of converting them into a customer. At this point, you have the ability to easily increase your revenue by showing them another component of your value proposition. Let’s get a closer look and see the difference between upsell vs cross-sell.
Upselling is often confused with cross selling. While they both will generate more revenue per customer transaction, they differ in execution. Product upsell would involve encouraging your customers to buy a higher end version of the interested product.
It is important to remember that upselling is most effective when you clearly communicate the value proposition of the higher end product to the customer. So get inside your customer’s mind and fully understand their needs. Then showcase clearly how the higher end product closely matches your customers’ anticipated needs. Let customers know if the higher end product will save money in the long run or has better features.
Always display options. Just don’t give too many options; three should be enough for comparison. Use a top of the range product to act as a price anchor, mid-range product and low cost product. The customer is more likely to purchase the mid-range product when compared to the lower priced version because they will value the increased benefits.
Cross selling strategies
Cross selling is simply encouraging your customers to buy related products. There are a few different strategies that you can use to implement this approach.
Get the look
Get the look’ strategy is standard for many online clothing retailers such as Asos.com. Next to the item your client is interested in, related accessories are displayed. Alternatively, after the item has been added to their basket, a small pop up box will appear to advertise a complementary item. This principle can also be used in other industries to solve the customer’s need.
Social proof: Join the crowd
What products have your other customers looked at that are related? Try following in Amazon.com’s footprints. The internet marketplace expertly introduces prospective customers to items they may not have been originally aware of. Next to the item a customer is investigating on their website they will show: Other people who bought this product also bought this other related item. This encourages the customer to join the crowd and also purchase the related item.
Impulse add-ons are usually displayed in the checkout area. They are products that are so convenient, enticing or cheap that the customer requires little convincing to purchase. For example, offering your customer, a smart phone screen protector with a purchase for a fancy new phone case. You want your customer to think: ‘Why not?’ then prompting purchase it.
This isn’t an exhaustive list of cross-selling strategies and upselling techniques. However you can see that by making a few tweaks you can easily increase the average spend per customer by giving them an offer they can’t refuse.