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Cross-selling VS. Up-Selling; Which Is More Profitable

Cross-selling and up-selling both help with customer retention if done correctly. Let’s dive deeper to help you understand which strategy is better for your unique needs.

By Hermes FangPublished 2 years ago 3 min read
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Cross-selling VS. Up-Selling; Which Is More Profitable
Photo by Towfiqu barbhuiya on Unsplash

It wouldn’t be unfair to say that cross-selling and upselling are the foundation of any business, especially e-commerce stores. Gaining a rudimentary understanding of cross-selling and upselling can help you significantly enhance your online sales and profits.

Before specifying which marketing method is more profitable, we need to understand profit. The success of an online business lies in customer retention. In other words, any strategy that brings your old client back to you is a surefire recipe for success.

The probability of retaining an old customer is 50–70% higher than selling to a new prospect. This leads us to conclude that whether you want to upsell or cross-sell, the real deal is in retaining a customer. Otherwise, there’s a risk of losing a customer even before making their first purchase.

Cross-selling and up-selling both help with customer retention if done correctly. And many e-commerce website builders encourage people to use cross-selling and up-selling techniques. Many software extensions are available for Shopify, Shoplazza, and other platforms to assist store owners in creating a supplementary product list in their product description.

Let’s dive deeper to help you understand which strategy is better for your unique needs.

By Igor Miske on Unsplash

What is Cross-selling?

Cross-selling is an effective sales technique used to increase sales profit. It's based on the simple concept of presenting a customer with related products while shopping at your store.

Let’s say a customer purchases a new laptop from your online store. You can cross-sell laptop-related accessories such as screen protectors, laptop bags, laptop cooling fans, and more by featuring them in sections like “frequently bought together,” “people also purchase,” etc.

It’s understandable that if a customer invests in a laptop, they may not be ready to make another heavier investment. The price of the cross-sell products is usually lower, giving the customer enough reason to click on the options displayed. If the customer is satisfied with the relevancy of the products, more than a few things will end up in the shopping cart.

Once a customer spends a hefty amount, an additional accessory is just a last-minute impulse. Cross-selling is just about making the most profit out of that impulse purchase.

Let's weigh the pros and cons of cross-selling to help you make up your mind.

Pros

  • The customer has access to multiple products;
  • Customers are more likely to feel understood and valued when all options are just a click away.
  • Cross-selling enhances the overall shopping experience.

Cons

  • Cross-selling carries a more considerable risk of customer discontent since customers may become irritated if the available options aren't relevant.
By Marvin Meyer on Unsplash

What is Upselling?

Upselling is a sales technique where the customer is offered better options than the original searched product. The upsell items are costly but offer better features and good reviews.

Although many business people believe that upselling is the way forward in e-commerce, many disagree with the idea.

For example, a customer is looking for a laptop from a specific company. Upselling would mean offering the potential customer upgraded options like laptops with better battery life, the latest Intel Core processor, a more flexible screen, etc. This might convince the customer to invest in a slightly more expensive laptop, considering that the specifications are worth the money.

However, if you show options that are way too expensive with features that don’t go with the original searched product, you may lose a potential customer. The key to upselling is always to sell upgraded products, which inculcates client interest and leads to higher sales profit.

Upselling a product might not always be favorable. You have to make an offer your client can not decline. In a few cases, introducing a product that’s way too expensive might put off a potential client. In addition to the relevance of the price difference, the specifications and features should be the same.

Let’s have a look at the pros and cons of upselling:

Pros

  • Upselling provides better sales options;
  • Upselling gives the latest insight regarding trending products.

Cons

  • Customers may think the e-commerce store is costly and decide not to buy anything.
By Frank Busch on Unsplash

Concluding Thoughts

With online shopping, most customers not only want you to shop on their behalf, but they also expect you to think for them. A satisfied consumer expects you to present all of the most recent selections and supplementary accessories on the same page.

The best method to keep a customer hooked is to think like a customer and provide all the desirable accessories and upgraded products just a click away.

Whether you should opt for upselling or cross-selling depends on your unique business needs. They are both fantastic sales techniques that can help increase your sales and revenues.

(Contributed by Iram Ghafoor & Hermes Fang)

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About the Creator

Hermes Fang

Eyes open wide, feel your heart and it’s glowing.

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