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Looking for ways to unlock growth and increase your revenue potential? That’s where the art of upselling and cross-selling comes into play.
These tried-and-true techniques not only enhance the customer experience but can also boost your bottom line. Just look at the numbers: Almost 91% of salespeople actively upsell their customers, with team upselling tactics driving an average of 21% of company revenue, while 87% of sales professionals engage in cross-selling, which similarly drives 21% of company revenue.1
If you’re looking for ways to promote your small business online and in person, upselling and cross-selling may be the answer. In this guide, learn some potential benefits behind these tactics, plus effective upselling and cross-selling strategies you can use in your business today.
Upselling occurs when a salesperson encourages a customer to purchase an upgraded or more expensive version of a product or service. The goal is to increase revenue and boost sales by convincing the customer that the better, more feature-rich, or premium option is worth the additional cost.
For example, a fast-food restaurant may offer to "supersize" a meal by adding extra fries and a larger drink for a slightly higher price.
Cross-selling, on the other hand, is the process of recommending additional or complementary products or services to a customer already considering a purchase. The suggested items are related or relevant to the customer's initial purchase and can enhance their overall experience.
For instance, if a customer buys a camera, a cross-selling opportunity could involve offering camera accessories like lenses, memory cards, and camera bags.
Upselling and cross-selling aren't just sales tactics; they are transformative strategies that can turn casual browsers into loyal customers. You can use them to help:
Imagine every customer leaving with more than they planned to buy – this is the power of effective upselling and cross-selling. By leveraging these strategies, businesses can help increase the revenue per customer. In fact, studies have found that cross-selling can increase sales by 20% and profits by 30%.2
Ever found a product you didn't know you needed until it was suggested? Businesses that improve the customer shopping experience through upselling and cross-selling are helping customers discover new favorites.
Thoughtful recommendations of products that meet customers’ needs mean businesses can build customer relationships by demonstrating their commitment to their satisfaction, cultivating a sense of trust and loyalty.
Shoppers who want to complete their purchases quickly and easily tend to opt for one-stop shops. By cross-selling, businesses can offer a broader range of products, making it unnecessary for customers to shop elsewhere. This not only simplifies the shopping process but also helps to solidify customer loyalty.
Marketing and advertising to find new customers can be one of the most expensive aspects of running a small business. Cross-selling and upselling the customers that you’ve already earned, rather than spending to find more customers, could help you decrease expenses and increase revenue.
For example, a hair salon owner could offer a discounted haircut when new customers book a coloring session. This adds the value of another service to the interaction, without the need for the salon to attract an additional customer.
Effective upselling requires more than simply promoting add-on services or features at checkout. To make these offerings irresistible, consider tactics like:
Save now, benefit later — that’s the psychological allure of upfront customer savings. When you present the long-term benefits of opting for a more advanced version of a product, you make a compelling case for the higher initial expense.
For example, consider a customer contemplating a basic and an advanced home security system. By illustrating that the advanced system includes features like mobile alerts and remote monitoring — which could otherwise incur significant costs if added later — you make the value proposition clearer.
While the higher price might not be what the customer initially budgeted for, you help them see beyond it and appeal to their desire for long-term savings. This ultimately makes the premium option more attractive and sensible.
Bundling products or services provides a unique opportunity to offer more value while encouraging larger purchases. By combining complementary items at a discounted rate, customers perceive they are getting a better deal, which may increase their likelihood of purchasing.
To implement successful bundle savings, keep these tips in mind:
One-time upgrades involve temporarily offering customers a higher-tier product or service at a reduced price, creating urgency and showcasing the value of premium options.
For example, a software company might allow users to try an enterprise-level service at a mid-tier price for a week. Another example could be a luxury hotel offering an upgrade to a suite at a discounted rate during low occupancy periods.
These offers not only provide immediate enhanced experiences but also open the door for customers to consider permanent upgrades after experiencing the additional benefits firsthand, helping to increase customer engagement, satisfaction, and long-term loyalty.
Nothing is as convincing as the voice of happy customers. Utilizing social proof in upselling involves sharing positive testimonials, reviews, or case studies that highlight the benefits of upgrading.
Here are some tips to maximize the impact of social proof:
There's a reason why gamification is a buzzword in marketing – it works. Gamification taps into the competitive nature of customers, encouraging them to make more purchases or choose premium options to "level up" and unlock rewards or discounts.
Here are some potential gamification elements to explore:
Experience can be the best seller. Offering interactive demos of premium features, whether in-store or online, allows customers to understand the added value firsthand. This hands-on approach helps demystify the advantages of higher-tier products by letting customers interact with them directly.
For example, tech stores will set up stations where customers can use different models of smart home devices, comparing basic versus advanced functionalities. Similarly, car dealerships often provide test drives in upgraded models featuring enhanced navigation systems and superior comfort.
Product comparison charts are invaluable tools in illustrating the benefits of higher-tier products. By clearly displaying the differences in features between various product levels, they help customers make informed decisions based on their needs.
Use these tips to effectively implement product comparison charts:
Through cross-selling, you can encourage additional purchases based on a customer’s original selection. This can potentially result in a boost in overall sales.
Ready to get started? Here are some cross-selling strategies you can try:
With your upselling strategies and cross-selling techniques in place, it’s time to get your team on the right track and create systems to track your company’s progress. To start, you can:
Use personalized product recommendations on your website based on customer browsing and purchase history. Implement "Frequently Bought Together" or "Customers Who Bought This Also Bought" sections on product pages. Also, consider displaying limited time offers or bundle deals prominently on your site.
Regularly analyze customer behavior, purchase history, and trends to identify potential cross-selling and upselling opportunities. Use analytics tools to track the effectiveness of your cross-selling and upselling strategies, too.
Reward loyal customers with exclusive offers, discounts, or freebies on complementary products or services. Incorporate tiered loyalty levels that unlock higher-value offerings as customers make repeat purchases.
To utilize social media as a tool to enhance your cross-selling and upselling efforts, consider showcasing customer testimonials and success stories that demonstrate the value of using multiple products or services.
Lifestyle content, influencer partnerships, and user-generated content can be effective formats for cross-selling and upselling on social media. Use these types of content to show how your products work together by sharing posts about product combinations that offer enhanced benefits.
For example:
Be sure to use the social media platform’s product tagging features whenever available to make it as easy as possible for viewers to find information about each product shown.
Educational content is a powerful tool for selling in general, but you can also introduce educational content to enhance your cross-selling and upselling efforts.
You can use educational content to demonstrate how premium features, product upgrades, accessories, or complementary items can add value to an item they are considering.
Educational content can be presented in many different formats:
Example: A manufacturer of in-home laser hair removal pens could tout the convenience of a special stand or carrying case for the product in their setup guide.
Example: A power tool supplier could demonstrate the convenience of owning two or more battery packs, so that the extras can recharge while the others are in use).
Example: A company selling in-home water filtration systems could create a video titled “How to choose the best water filter for your home.” Then, within the video, the content can be used to educate the viewer on premium products and upgrades, and why they can lead to an improved quality of life for the viewer.
Example: After a user purchases a fitness tracking device, they could receive educational content showing how the device works in tandem with a premium workout app subscription.
By thinking strategically about your educational content, you can help users feel informed about their purchases and cross-sell or upsell your customers in the process.
Segmenting your customer base can help you cross-sell or upsell your products or services by presenting tailored suggestions based on the shopper’s needs, preferences, and behaviors.
To find customer segmentation opportunities, take a look at the customer data you have available. Use it to segment your customer base by age, gender, device, location, and any other data that you can glean.
Example: An outdoor supply company may use data analytics to discover that customers in a certain state tend to purchase kayaks, paddles, quick-drying clothing, and waterproof coolers. The company may find cross-selling success by proactively suggesting these items to customers with addresses in that state.
When used in this way, customer segmentation can enhance the relevance of your offers. Shoppers that are presented with relevant offers may be more likely to convert, and they could be more likely to increase their order value by purchasing additional suggested items.
Loyalty members are already “warm leads.” They’ve demonstrated interest in your brand, made purchases, and ultimately chosen to form a deeper relationship with your brand by joining your loyalty program.
This makes loyalty members the ideal candidates for targeted upselling and cross-selling offers. When implemented thoughtfully, cross-selling and upselling can feel like a benefit to your dedicated customer base—not a sales pitch.
One way to do this is by framing your offers as exclusive perks or rewards, reserved just for your members.
Example: A local cafe’s loyalty program could offer a “reward” of discounted size upgrades for members, or 2x loyalty points for customers who purchase a baked treat with their beverage.
To take it a step further, consider integrating a tiered loyalty program that presents upselling opportunities and rewards loyal customers based on their level of spending.
To illustrate, let’s say customers who spend $300 with your brand may be entitled to “Silver” membership, but customers who spend $500 are entitled to “Gold” membership. Silver members received a 10% discount on purchases, but Gold members receive a 20% discount and access to premium products or features. This could encourage shoppers to spend more in order to reach the higher tier of membership, unlocking better “perks.”
An additional benefit of loyalty programs is that you can gather more data about your customers’ preferences, spending habits, and more. Once a shopper logs onto their loyalty account, data like purchase history, shopping frequency, and products added to “favorites” lists can help you generate personalized cross-selling and upselling offers.
Train your sales and customer service teams to identify cross-selling and upselling opportunities. Teach them effective communication techniques to present additional, relevant products or services seamlessly.
If cross-selling and upselling are done excessively or aggressively, customers may feel pressured or manipulated. They also may begin to doubt the intentions of the business and question whether its recommendations are in their best interests. No one wants their business to gain a reputation that is only focused on making a sale rather than helping customers solve their problems.
It’s also worth noting that if the cross-sold or upsold products or services don't align with the customer's needs or preferences, it can lead to a poor customer experience and result in negative reviews or decreased loyalty. That’s why it’s important to educate your employees on these common pitfalls before encouraging them to employ cross-selling or upselling techniques in their sales strategy.
PayPal Open offers a comprehensive suite of tools that can enhance revenue streams for small and medium-sized businesses. From risk management to optimized checkouts, PayPal Open powers businesses looking to streamline the purchasing process, reduce cart abandonment, and offer shoppers a better experience.
Upselling and cross-selling are powerful tools to help drive revenue and enhance customer relationships. By implementing these strategies effectively, businesses can tap into the potential for increased transaction values, improved shopping experiences, and the development of long-lasting customer loyalty.
Through careful planning, training, and continuous analysis of customer data, you can leverage these strategies to create a win-win situation for your business and your customers alike. While you’re at it, learn how to create a compelling marketing strategy for your business and discover more ways to promote your brand online.
In partnership with three expert business owners, the PayPal Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.
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