cross sell and upsell customers

How to Upsell and Cross-Sell

6 min read • Dec 17, 2021 • Lendio

Consumer spending is on the rise and expected to increase 4.7% in 2022, according to Kiplingers. Customers are ready to spend.

But is that enough?

Even if you’ve launched a brand-new product that you know your customers will love, even if you’ve poured resources and energy into marketing and advertising, even if your sales team has a close rate for new customers that blows away the competition, you may still be missing one thing: that next step.

Single-item buyers are one thing, but what if you could get them to add to that order? Welcome to the art of the upsell and the cross-sell.

What Are Upsells and Cross-Sells?

Upselling is the practice of enticing a customer to buy a higher-end product than the one they currently have or are about to purchase. 

For example, your customer might be planning to purchase a pretty amazing kitchen knife for $100. You, however, may show them all of the additional advantages they receive with the leather-handled version of that knife, which costs $30 more. Or, you may persuade an existing customer with a basic wasp repellant service to upgrade to a premium spider, rodent, wasp, and ant combo package. 

Upselling increases the value of your transactions, and it also boosts your customers’ lifetime value (CLV) — the total worth of the entire, lifetime relationship you build with that customer. 

Cross-selling is when you encourage a customer to buy a related or complementary item. For example, a client who comes to you for a haircut may be cross-sold shampoo and conditioner. A customer in need of running shoes may also be persuaded to purchase new socks. A client wanting a furnace repair may decide to buy a duct-cleaning or maintenance package, too.

Cross-selling helps expose your audience to related products and services at the right time. When a customer buys a new car, they likely want insurance as quickly as possible. When a customer purchases the latest mobile device, they probably want a protective case to keep it from getting scratched. As a consumer, you’ve no doubt been cross sold many times: would you like fries with that burger?

5 Tips for Executing Better Upsells and Cross-Sells

Now that you know what upsells and cross-sells are, it’s time to make them happen. Below, we’ve compiled a few helpful tips to increase your opportunities of making the bonus sale. 

1. Offer Upgrades and Complementary Goods

You can’t upsell or cross-sell goods and services if you don’t offer them. Consider what your customers need. Do they purchase a product from you and then walk across the street or jump over to the next Amazon seller to buy the complementary goods they want? Think broad: while fries naturally go with burgers, what about a book light for a novel?

It’s your job to predict the upsell products and show them to your customers. It helps if you have a relationship with the customer already, since not all customers will see the same value in each potentially upsold item. Have a retail shop? Offer upsells at checkout so your customers know what’s available—and before they shop anywhere else. 

2. Nail Your Timing

Upsells and cross-sells are all about timing. Make it timely and convenient for your customer, and you won’t always need to have a better product or offer than your competitors.

The timing starts before your customer even makes it to your store or website. Start as early as possible to expose your audience to the possibilities. If that doesn’t get them to bite at a cross-sell or upsell opportunity, engage them at checkout—this opportunity could be on your e-commerce site or at the physical checkout desk at your store.

Offer a protective case to a phone buyer, and they’ll likely give it their solid consideration. If the sale isn’t as relatable or time-relevant, you might need to throw in a discount offer. For example, when a customer buys a new Xbox, you might offer them 25% off a new controller. 

3. Remarket to Past Buyers

Cross-sells and upsells don’t just happen at checkout—they happen days, weeks, months, and even years later. Continue nurturing your relationships with customers after they make a purchase. Keep them in the know about new product announcements and significant promotions.

Try remarketing tactics to target previous buyers through pay-per-click (PPC) ads, social media, and email marketing. Want to really stand out? The old standby, direct mail, may seem new again. Use the data from their past purchase to inform which products and offers you prioritize. 

4. Narrow the Choices

Too many options can overwhelm your customers, which can stifle the progress of a sale or stop it entirely. How can you avoid this? Narrow the upsell or cross-sell options. Don’t just offer your entire product selection as an upsell or cross-sell opportunity—get hyper-focused by suggesting the best potential items for the individual customer.

Need some inspiration for how to do this effectively? Visit any Amazon product page and scroll down to the “Frequently bought together” and “Products related to this item” sections. You’ll notice the page only features a handful of items—the ones that buyers are most likely to buy in conjunction with the primary product.

Collect data on your customers and products to understand buying behavior. You may find your customers are more willing to buy socks rather than laces when purchasing shoes—or they might be more inclined to buy a hat with a T-shirt rather than shorts or jeans.

5. Provide Bundle Deals

Instead of letting your customers mentally crunch the numbers, do it for them. Bundle up some of your complementary products and offer them in a package discount deal. 

An offer as low as 10% or 15% could be enticing enough to get a considering buyer to opt for the package rather than a standalone product—especially if they need the other items.

For example, if you sell camping equipment, consider creating a bundle deal that offers a tent, sleeping bag, and pad. Or, if you sell massage tools, think about bundling a foam roller, massage gun, and lotion into a package.

Take the Extra Marketing Step

Upsells and cross-sells might seem like a lot of work, but they’re worth the effort. You’ve already spent valuable time and money getting your customer to checkout (or beyond)—a little extra push can make a big deal for your ongoing relationship and your business’s bottom line.

Don’t go overboard trying all these tactics at once. Pick 1 or 2 that you like and begin to experiment. If it works, scale the marketing tactic. If it doesn’t, move on to the next one. Remember, while you want to sell more products and services, you also want to use upselling and cross-selling as a way to connect with your customer. Done right, these tactics also help you understand your customer’s needs and interests, which strengthens your relationship, too.

 

Disclaimer: The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.

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