Tips for Upselling and Cross-Selling to Existing Customers
Your customers’ “sellability” does not end at the point of sale. There are opportunities for more after-sales business. Practices like cross-selling and up-selling can help you capitalize on that opportunity.
What is Up-Selling
Upselling encourages the customer to purchase anything that increases the price of additional purchases through upgrades, expansions, or premium options. When you upsell, you’re offering an upgraded or premium version of the product you just agreed to purchase, rather than offering the customer an additional product to complement their original purchase. So when you upsell, you’re building the product, not building the product. A study found that 88% of surveyed sales reps attempted to upsell their customers. 49% of reps in this group say understanding customer needs and goals is a key strategy
Understanding Up-Selling
As a more realistic example, consider a company that sells sales force automation software to small businesses. The company offers his 3-tier plan with extra features on the more expensive plans. A company representative is currently considering deals with small businesses that agree to buy the cheapest of his three options available. If a sales rep wants to upsell a prospect, they may promote relevant features that are not found in lower-tier options but are found in mid-tier options. Suppose a prospect’s business has matured and become more dependent on accurate forecasts. In this scenario, the lower tier plan lacks the forecast resources that the middle tier option provides. With this in mind, salespeople may try to persuade prospects by highlighting how upgrading to a higher option ensures they are adequately prepared to easily make accurate and productive forecasts as their business grows.
What Is Cross-Selling
Cross-selling drives purchases of items related to core products. For example, if a customer already subscribes to a marketing tool, cross-selling encourages that customer to purchase a subscription to her ERP. If your business offers another product or service that can complement or enhance your customer’s initial purchase, cross-selling can be a great way to generate additional revenue. Research shows that 67.6% of cross-selling professionals offer discounts or promotions, and another 66.1% recommend related or complementary products and services.
Understanding of Cross-Selling
Imagine that you work for an educational technology company that sells a suite of automation software that supports university administration. They offer him three products. One for curriculum planning, another for lesson planning, and one for academic reports. You contacted the university and agreed to purchase curriculum planning software. If you’re interested in cross-selling, introduce one or both of your other products and explain how they work together to simplify academic administration tasks. In this case, instead of providing the prospective customer with an updated version of the software they purchased, we provide separate products that complement each other to mitigate vulnerabilities.
Difference Between Upselling and Cross Selling
The difference between cross-selling and up-selling is in the name. Cross-selling complements the sale with additional horizontal products that complement the original purchase. Upselling occurs when a purchase is made by selling an upgraded or improved version of the original product to a potential customer. These terms are often used interchangeably, but have different approaches. Continuing with the fast food example, you upsell by adding additional toppings to the burger itself, but cross-sell by offering another option on top of the burger. With this in mind, let’s take a look at some cross-selling techniques to close deals every time.
How to Effectively Cross-Sell and Up-Sell
Cross-selling and up-selling can occur at any point in the buyer journey. And according to HubSpot research, mapping a customer’s journey to identify the most effective upsell or cross-sell opportunities is one of the most effective strategies. Other key strategies include:
- build customer trust
- survey client’s business to identify challenges and opportunities
- use of personalization or behavioral segmentation
Below are some best practices for learning how to cross-sell and up-sell.
1. Know your audience
You may already know your buyer persona well, but it’s important to know your target audience well, even if they’ve already purchased your product. Demographic and psychographic information about your customers, along with their feedback, is used to create customer personas, understand their goals and challenges, and identify the most relevant products for cross-selling and up-selling.
2. Create a customer journey
Next, plan your customer’s journey to see how your product will be used and how it will help your product grow. When customers start seeing results (thanks to your product), they start telling others about it and generating referrals. At this point in the customer journey, they’ll probably be thrilled to hear your cross-sell or upsell pitch and will receive extra money for additional offers. Wait until you are ready to cross-sell or up-sell. During the post-purchase period — after purchase, during onboarding, and until the customer realizes its value — additional products and features become difficult to sell.
3. Consider product problems and propose solutions
Before you call or email and try to sell to existing customers, take the time to review your products and see where they currently stand in the customer journey. This gives you a clear picture of the overall challenges your customers are facing and exactly which products to try as a solution through cross-selling and up-selling.
4. Practice active listening
You may be able to spontaneously cross-sell or upsell your customers through phone or email correspondence. So improve your active listening and recognize signals that your customers may be anticipating your offer. If your customer wants expanded functionality or is actively working to reach their goals faster, it may be the right time to mention how other products and services can help them reach that goal.
Wrapping Up
Cross-selling and up-selling are not always easy. Proper use of this tactic requires optimal timing, awareness, and empathy. By staying in touch with your customers, knowing which features and products they will benefit most from, and when they are most likely to accept additional offers, you can upsell and cross-sell your best customers.
