If you want to build a successful business online, you need to understand how to effective sell to your audience. While the concept is clear enough, there are actually many different ways to accomplish this, and if you aren’t focusing on each of them differently, it could end up costing you in wasted advertising dollars, and lost sales in the process.
A perfect example of this can be seen with the concepts of cross-selling vs. upselling. Cross selling is great as it can allow users to find different products they might already be interested, based off their original purchase. Upselling is trying to sell additional products and services in relation to what they are already purchasing.
When done correctly, this can actually add thousands of dollars to your revenue every single week, or month depending on your site volume.
Cross-Selling vs. Upselling in Motion
Here are a few more examples to help better understand the differences between cross selling and upselling, and also how you can implement these same methods into your own business.
“That’s a really nice home theater amplifier you’re looking at. In fact, it’s one of the best. And while its 5.1 surround and HDTV capability are certainly commendable, for another $300 you can get one with 4K ultra high definition video capability and 7.1 surround sound to future-proof your setup.”
This is a classic example of upselling.
“That’s one of the best home theater amplifiers on the market, you’re going to be very happy with its performance. If you really want to get the most out of it, you should invest in these premium HDMI cables with gold-plated connectors. The signals will be a lot cleaner, so your picture will be even sharper, and your sound will be even more clear.”
This is cross-selling.
Now that you have a better understanding on how each of these methods work, let’s discuss how they can be used with everyday business, and also serve value to your audience of customers in the process. Remember, the more focused and optimized your online store is, the easier it will be for your audience to click a button an add new products or services to their shopping cart and then proceed to the checkout process. This is just one of the many reasons why Amazon has done so well over the years.
The Benefits of Upselling
Basically, upselling entails introducing a higher-end product to a customer just as they’re about to make a purchase, with the hopes they’ll go for the more expensive item.
In ecommerce, this typically takes the form of a notation at the bottom of the product description stating; “There is a newer model of this item.” Or, “Customers looking at this item also considered—“.
This can generate more revenue, while ensuring your customer derives the maximum satisfaction from their purchase. The key is to focus on the benefits of the higher-priced item, so the customer can envision the value they’ll derive from being willing to spend just a bit more money.
The Benefits of Cross-Selling
In many cases, when you sell electronics, the more your customer gets, the more they’re likely to need. A new amp probably means new cables. A new 4K DVD player requires 4K DVDs to perform optimally. If they’re upgrading from a 5.1 amp to a 7.1, they’re going to need an additional set of surround speakers.
Bringing your customer’s attention to this adds to the value of the order, while saving them the trouble of shopping around for the ancillary items after they get the amp or DVD player home and realize they’ll need those additional products too. This improves customer satisfaction by ensuring they can get full enjoyment from their purchase as soon as they get it set up.
Cross selling is most effective on checkout pages when combined with a discount. It generally takes the form of; “Customers who purchased this item also bought—“. That combined with a discount, or an offer of shipping at the same price is usually enough to help them realize they’ll need those things too and make the buy.
In addition to providing that service for your customers, cross-selling can introduce items shoppers may not have realized could be bought from you. This increases your value as a seller, as you’re now providing a one-stop shopping experience.
Merchants can often accomplish cross selling by bundling related products. This saves the customer the trouble of tracking down everything they’ll need. You can also take advantage of economies of scale and offer discounted pricing on these bundles.
Another benefit of bundling is the potential it offers for saving your customer on shipping charges. Let them know items can ship in one package if they purchase the bundle, rather than buying items separately. Ultimately, this will be a win on both sides. You’ll sell more, your costs are reduced, and the customer spends less than they would have otherwise.
In an ideal world, rather than looking at cross-selling vs. upselling, you’ll work to both upsell and cross-sell. To be effective, you must have a firm understanding of what your customers value most and respond with corresponding products and service. You’ll make more money and your customers will be happier because they’ll get exactly what they need.
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