What is Upsell? Distinguishing Between Upsell and Cross-selling
When you want to eat fried chicken, you wander on Lotteria’s website to order. You accidentally see a banner ad like this:
In the process of researching information about the iPhone X, do you see a list of accessories in the right corner like this?
Do you think the above banner ads are arranged randomly? No, it’s a trick that retail businesses often use to stimulate user shopping behavior. This sales tactic is called upselling and cross-selling .
You wonder, what is upsell? What is the difference between Upsell and cross-selling ? What makes the big boys in the retail industry apply these two tricks to their business? Can you use them to boost your own sales?
All of the above questions will be answered in the following article of Malu.
Upsell is a sales tactic aimed at directing customers to choose a more expensive, premium product/service package in the purchasing decision process. This sales trick is often applied by e-commerce businesses with the ultimate goal of increasing sales and maximizing profits.
Upsell can be applied to any business, from fast food products like McDonald’s, KFC; to technology products such as sales management software, online movie watching applications (Netflix), …
Netflix is a business that provides an online movie viewing service. The company is very wise: When customers choose service packages, Netflix will list a list of tariff plans, along with the features that customers enjoy when using that service plan.
Of course, the more expensive package will enjoy more attractive features (such as 4K standard picture quality, Dolby sound, …). When choosing a charge, seeing this information, customers are very hesitant and confused. Many customers are willing to choose a higher package than they originally intended.
2. What is cross-selling? The difference between Upsell and Cross-selling
What is cross-selling?
Cross-selling is a sales tactic in which businesses encourage customers to purchase additional products along with the main product. We often encounter this trick in businesses that retail phones, household goods, etc.
You can visualize this trick through the following example:
When you buy the latest iPhone on FPT Shop, the retailer is very clever in integrating the list of accessories that come with the phone that it is providing.
The form of stimulus “buy peanuts with beer” proved to be quite effective, when many customers felt the need to buy bluetooth headsets, phone cases, tempered screens, power banks, … after seeing the offer list. this item.
So what is the difference between Upsell and Cross-selling?
Upsell and cross-selling are often misunderstood as identical. In fact, these two concepts are completely different .
With Upsell , the essence of this trick is to stimulate users to choose the more expensive, premium version of the same product. For example, Netflix’s Premium plan, compared to the Standard plan for cheap and less features.
As with Cross-selling , this trick directs users to buy the product categories that go with the main product. These bundled products are often complementary and can often be purchased individually and independently by the user. Like when you repair and maintain your car regularly, the shop often offers you a car wash service that includes an oil change and an inspection of car parts, for example.
However, the ultimate goal of both these tricks is the same: Increase the revenue and optimize the profit of the business .
Retail businesses regularly use Upsell and Cross-selling tricks in their business activities, and here’s why:
Upsell and Cross-selling help build strong relationships with customers: These two tricks are not just tricks, they actually help businesses provide customers with a great experience using the product / better service. Obviously, when using a high-end product package, or buying additional accessories, customers enjoy more attractive features, and will definitely feel more satisfied.
It is easier to sell products in bundles, rather than selling them individually: When customers perceive a connection and complementarity between products, they tend to be persuaded and easily pay a higher price to use. Some businesses even use a trick: offer a cheaper combo price than buying each product individually. That encourages customers to spend more money to shop.
Upsell is especially effective with loyal customers: A study has shown that the probability that old customers buy products and are willing to spend more money on businesses reaches 60-70% . While, for new customers, the probability is only 5 – 20%. Once customers have trusted to use your product / service, they do not hesitate to spend more money to give themselves a more optimal experience.
Frequent customers : Upsell and Cross-selling are a form of adding value to customers. This is also the best way to get them to come back to use the product/service. Of course, don’t forget to elaborate on after-sales policies to ensure customer satisfaction at any time.
4. Apply Upsell and Cross-selling in business activities
To be able to integrate Upsell and Cross-selling tricks in your business, you need to follow these steps:
Pre-sales: Show suggestions to customers in easily accessible locations (maybe in the sidebar, right corner of the screen, or in the “suggestions” section just below the product information).
During Sales: Display pop-ups during checkout, at check-out page, shopping cart page, or via notifications.
After-sales: Regularly send email suggestions to customers to choose from in the next purchase.
Tips to help businesses Upsell – Cross-selling effectively
Upsell or Cross-selling is an effective sales tactic. But there is no denying that customers feel aversion to businesses whose sales promotion methods are insensitive and obvious.
Here are a few tips that can help your business Upsell – Cross-selling effectively, without making customers feel annoyed, or aversion.
#1: Choosing the right Upsell – Cross-selling
Businesses have many methods of Upsell and Cross-selling. With different customers, you can choose the appropriate method:
More advanced version
You can suggest to customers to choose a more advanced product/service package. Emphasize the aspects that customers can get, such as better product quality, more advanced features, more durable, faster, more powerful, etc.
You can suggest customers to use auxiliary products with “main product protection” feature. For example, after a customer buys a mobile phone, don’t forget to suggest that they buy tempered glass to protect the screen, buy a case to prevent scratches on the back, buy a power bank to take away.
Personalized ancillary products
Every customer wants the product they use to be unique, no one else but them has it. You can fully utilize this mindset to cleverly upsell or cross-sell.
For example, a customer after buying a phone may be suggested to buy a stylish phone case. The design of these tiles must match the personality and style of the customer.
Sold in packs
This method is quite common. Businesses can completely combine different types of products, sell them into 1 package at a cheaper price than each item when sold individually.
This is a smart way to do it, because it hits the customer’s “saving” mentality, and doesn’t make them spend a lot of time choosing each item one by one.
#2: Always in Upsell – Up-selling
As you know, it is always more effective to sell to old customers than to do the same thing, but with new customers. Not everyone is willing to spend their money to buy your product. And when the customer nods to your offer, do you want to maximize your profits?
Surely the answer is yes. Therefore, do not forget to do the following things when interacting with customers at touch points:
When customers refer to information, do not forget to show many options for customers to consider.
When the customer adds products to the cart, show the ancillary products. Emphasize what customers get when they buy more of these products.
In case the customer has made a successful purchase, don’t forget to send an email “to lure” them to buy a premium product with superior features.
#3: Don’t push the customer
Even if you really want to upsell your customers, don’t push them too hard. Constantly firing popups in front of customers can be annoying, and stop the entire shopping activity.
Right time, right person is the right advice here. Carefully study their shopping behavior and habits, from there, push the right upsell – cross-selling message. Typically, customers tend to shop more at the time they add the product to the cart, or during the checkout process.
#4: Upsell must be related to the main product
This is obvious. You can’t ask customers to buy more food while they’re busy shopping for their phones.
Not to mention, when you Upsell or Cross-selling, you also have to build a link between the main product and the complementary product, emphasizing the benefits when customers use both products.
#5: Use the “urgent” aspect
This is another tip when Upsell – Cross-selling. When you set a time limit on Upsell packages, customers have less time to think, hesitate, or linger. Often, “for later consideration” will lead to customers forgetting the package that you just offered. All efforts are thus poured into the river into the sea.
Creating “pressure” in terms of time is also a way for you to close sales quickly, without being too obvious or rude.
#6: Use a comparison table
Like the Netflix example at the beginning of the article, you can completely give a comparison to “seduce” customers. Emphasize what they don’t get when using the lower-end package. Like this Spotify friend’s example:
#7: Limit the price increase for product packages
In Upsell cases, businesses are wise to limit price increases between product bundles.
The business offers 3 service packages. The basic package costs 300,000 VND / 3 months of using the service. Intermediate package, instead of the price of 600,000 VND / 6 months, businesses only sell 500,000 VND for 6 months of use. With the premium package, the price is only 800,000 VND for 12 months of use.
This hits the psychology of customers: The more you sign up for the premium package, the more you will save when using the product.
#8: The rule of “3-legged tripod” in setting up the service package
Have you ever heard of the ” 3-legged tripod ” rule in Upsell. This rule means: Customers usually choose the middle of the three product packages.
Therefore, many businesses today often only offer three product packages to optimize business performance, like this MailChimp friend:
5. Upsell example – Successful cross-selling from big businesses
Surely you are no stranger to the media giant Sky – the unit that owns and elevates the copyright of the English Premier League for many consecutive seasons.
Like other cable TV providers, Sky cleverly offers many different service packages, with a variety of prices. Young children already have the Kids package to watch their favorite shows, men have the Sky Sports package to enjoy the top matches, etc. But the airline still maintains the main £22 package of basic TV channels. best version. The right to choose add-on packages belongs to the customer.
If you feel overwhelmed with too many packages, guests can choose from premium packages for £39 (down from £54) and £47 (down from £61) with one or all above add-on packages.
If talking about Upsell and Cross-selling combo packages, there is no better unit than fast food chains. And Lotteria is one of the first brands to apply the concept of food combos to business activities.
Do you find that, when deciding on a meal during an outing, you always wonder whether you should order each dish, or order the chicken/burger-drink-potato combo? Understanding this problem, Lotteria thoroughly applies the sale of products in packages, when the combo proposal is a completely separate item in the menu.
There are more than 10 combo sets for customers, with a variety of dishes, serving from groups of 2 to the whole family. The price of the combo set is usually much cheaper than buying each product individually. Like me, I would definitely choose the combo set because of the convenience, not having to think about ordering separately, and saving money.
Retailers of electronic devices, including FPT Shop, are the units that apply Upsell Cross-selling most thoroughly.
When you learn about a new smartphone, there is immediately a line of notes recommending that you buy more combos to enjoy a discount of 1 million when buying the total.
Not only that, the right corner of the screen also has recommendations to buy more accessories for the smartphone. Buy or not is up to you, but with attractive features, you can hardly help but learn more about those ancillary products.
Through this article, hopefully you have a better understanding of Upsell and Cross-selling, as well as how to apply these two tips to your business. Good luck!