What is an Upsell and what is a Cross-Sell?

Do you want your ecommerce to be professional level? Then this will interest you.

This time you will learn what an Upsell is, how it differs from a Cross-Sell (we will also see what this is) and you will know the importance of implementing these 2 basic sales strategies in your Ecommerce or sales pages to improve the shopping experience and increase your revenue.

When we sell on the Internet, we can always come across concepts that can be confusing. Of the most effective and above all most common techniques that we can see in ecommerce par excellence are Upsell and Cross-Sell.

But what is the difference between an Upsell and a Cross-Sell?

An upsell aims to convince the customer to buy a more expensive version of the product, while  cross-sell focuses on making personalized recommendations of related, complementary products.

What is Upsell?

Upsell is a sales technique whose objective is to persuade customers to purchase a more expensive, upgraded or premium version of the chosen product or service in order to generate a larger sale. Many online businesses combine Upsell and Cross-Sell techniques in an attempt to increase the Average Ticket and maximize profits.

What is the... Cross-sell?

Cross-Sell, also known as cross-selling, is a technique that identifies related products or services that complement and satisfy needs that the original item or service does not meet. For example, when selling a hamburger, you can offer fries or a soft drink.

Generally, cross-selling (cross-sell) points users to products that they would buy anyway; by displaying them at the right time, the merchant ensures the sale of that product.

3 important reasons to start practicing Upsell in your business.

While these types of techniques might sound a bit aggressive at first (to some of us), when executed correctly, they can positively affect the shopping experience. Online sales depend on these techniques for a number of reasons:

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1. Practicing Upsell can help you improve your relationship with your customers.

When put in perspective, this is not a "bad" technique. If you focus on helping your customers "earn more" by offering premium products or better quality add-ons that will eventually add more value, it will make them feel like they got the best deal. It will become a technique to increase customer satisfaction that at the same time will help you generate additional revenue.

2. It is easier to sell to existing customers than to acquire new ones.

Generating qualified leads is a practice that can result in high costs. It is much easier and cheaper to optimize the sale with a customer who already trusts you and has purchased something in the past or someone who is about to make a purchase than to sell to a new potential customer who has never heard of your service or brand.

The probability of selling to your existing customers is 60-70%, while the probability of selling to a new potential customer is 5-20%. It's an easy and quick win for many Ecommerce companies in their mission to accelerate growth and improve results.

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3. Practicing Upsells automatically increases Customer Lifetime Value (LTV).

Customer Lifetime Value refers to the average monetary value that a new customer represents. With this in mind, you could divide your customers into 3 different categories:

• Unprofitable customers
• Profitable customers
• VERY profitable clients

Increasing LTV (Live Time Value) means that your business generates more revenue per customer without having to invest more. This also means that your company has more budget to acquire new customers.

Recommended practices

You can implement Upsells at 3 different times:

1) Before Purchase: Display recommendations on your product/service page or side-bar.

2) During Checkout: You can show recommendations using pop-ups, in the shopping cart, at checkout, in your retargeting campaigns or in abandoned cart emails.

3) After Purchase: You can use personalized email campaigns to follow up and entice customers to come back for more.

A properly implemented Upsell is based on understanding your customers' needs and improving the shopping experience.

Remember, an Upsell should leave the client with the feeling that they "won more"... these are some of the best practices you can implement:

1) Incentivize Upsells and reward your customers for spending more money on your website, for example, you can offer free shipping or a discount on the next purchase.

2) You can use comparisons to demonstrate the value of the more expensive product or service (Microsoft does this very well).

3) Make sure the product you are trying to sell is within a reasonable price range. Customers will rarely pay more than 25% of what they planned to spend.

4) Don't be too aggressive. You can show the different alternatives, but leave enough space for the customer to make the decision calmly.

5) You can create a sense of urgency by communicating the end date and time of the offer or shortage by displaying an actual update of your inventory (only 3 available).

6) Use the right language to communicate the benefits of buying the product or the risks of not buying the product or service. Defining your Value Proposition well will help you a lot.

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As you can see, although they are two very different concepts, you can perfectly implement both within your online sales strategies. Understanding the differences will help us make better decisions when making product associations, tagging categories and measuring conversions of different combinations.

It doesn't matter if you don't have an Ecommerce, these strategies work perfectly when you sell by email, on your landing pages, in offline sales, etc... these techniques work, not for nothing have been present in our day to day for decades.

Now it's your turn, you already know what an Upsell and a Cross-Sell is, you just have to imagine how you can implement it in your business, practice it and then let me know how it went 😉