Upselling and cross-selling are two terms that can make many consumers cringe. But these are also two strategies that are of the utmost importance to businesses, especially for small retailers.
If done right, they can build up your relationships with your customers and increase your revenue. All you need to do is show relevant upgrades at the right time and place.
Back in 2006, Amazon had a 35% increase in its revenue just from cross-selling. And according to Forrester Research analyst Sucharita Mulpuru, product recommendations make an average of 10-30% of e-commerce site revenues.
But before we get into the “how,” we must establish the “what” and distinguish between the two terms. And this video will give you a basic explanation of the two strategies first.
What are Upselling and Cross-selling?
Upselling means encouraging customers to purchase a comparable higher-end product than the one they originally intend to purchase. By higher-end, we mean an upgraded or premium version of the item, which could potentially be more beneficial to the customer.
This method is targeted at customers who have already made a decision to purchase a particular type of product.
On the other hand, cross-selling is the suggestion of any other products to be purchased along with the primary item. It’s aimed at enhancing the consumer’s use and experience.
Between the two, upselling works 20 times better than cross-selling, according to HubSpot. That’s because once buyers already have a product in mind, it would be difficult to convince them to buy anything else.
However, businesses need to be careful not to repeatedly force their customers to buy more products or a more expensive alternative while browsing through the store.
Hustling is appreciated. But going overboard with it? In this case, you run the risk of turning them off entirely.
Frustrated customers = no sales.
A Side-By-Side Comparison
With upselling, the tactic focuses on increasing order value by encouraging customers to purchase a more expensive item. Meanwhile, cross-selling involves recommending a complimentary item adjacent to the original product.
Simply put, an upsell is more like an upgrade, whereas cross-sell is a whole new other purchase.
Here is a summary table of these two sales strategies:
|Definition||A similar but better (or upgraded) quality product is offered in place of the consumer’s item.||An additional product, which can solve the needs or improve the consumer’s experience, is offered.|
|Knowledge||It is selling a more expensive product. The transaction is much easier when compared to cross-selling.||It requires knowledge about the items connected to the product bought. Think in pairs or matches. |
If a customer buys product x, product y is offered to be purchased alongside it as it’s best paired with the original product to make the overall experience better for the customer.
|Result||Profit goes up due to the sale of a particular product.||Profit goes up due to the sale of multiple products.|
|Example||An example scenario is when a customer needs a regular shampoo, and the salesman suggests they buy a premium shampoo.||Cross-selling is when a customer wants to buy shampoo, and the salesman sells them a bottle of conditioner to go along with it.|
Strategies For Upselling And Cross-Selling
Upselling and cross-selling are excellent ways to increase customers’ spend per order, their basket size, and eventually your store’s revenue. And here are some strategies that you can follow to make that happen:
1. Determine Which Tactic Will Get You Results
You must help your customers achieve a better result or experience by offering tips that benefit them.
Buyers more or less know the product they want; they do not wish to be further distracted by something else unless it is a better option.
The last thing you want is to bombard your customers with useless product suggestions.
2. Create a Suitable Product Suggestion
Product suggestions have to fit the customer’s exact needs. Design your site into one that matches their needs and desires. From there, you can determine which of your products or services could help your customers.
3. Demonstrate the Selling Value
Consistently demonstrate the value of the additional product or service you would add for your customer. Also, put in some case studies, such as testimonials and positive reviews. These tell your potential customers how they can use the additional product to solve their concerns.
4. Reward Your Loyal Followers
When using upselling or cross-selling, a customer spends more money on your deal on top of the primary product. To demonstrate gratitude, reward customers for spending more and for trusting you. You can either send a thank-you email, free gifts, or discount code for a future purchase.
Learning Tactics From The Pros
Now we have established the differences between upselling and cross-selling, anyone getting into the business should know the best strategies for writing a good sales copy.
Those in the e-commerce business can also dig into data to better understand which items or services would be the most appropriate and beneficial to the customer.
It is better to learn how to sell makeup and beauty products online by looking at how popular brands exercise their top content marketing tips to upsell online.
Dollar Shave Club
This brand is known for its top-shelf grooming products. It continuously expands its product offering and gets new users to sign up for boxes of both their shaving and grooming products.
Users can also buy products individually, but the Dollar Shave Club cleverly rearranged the product lineup by putting bundle deals at the top, such as Shave Essentials and packs of blade refills.
Additionally, the lineup is undoubtedly far more appealing when you see the names of high-end products. In this case, it’s razors (with the budget alternatives found in the later sections).
The simple UX and design tricks encourage customers to always go for the most pricey option, regardless of need or desire.
Offering a discount on a minimum order price is another great tactic. Look Fantastic, the number one online premium beauty retailer in Europe, utilizes this tactic by letting the customer save up to 15% when they accumulate total spending of £80 (€93.46).
And should the consumer be close to spending £80, they will get a nudge urging them to buy more to reach the minimum amount and be eligible for a discount. They do this by suggesting another item that they may not have seen or considered.
One might think that having this offer often negates the sales benefits for the retailer. On the contrary, it’s not. As consumers add items to their cart to reach the minimum spending for the discount, retailers benefit from the overall sales in the process.
Away Travel, a premium travel luggage brand, knows how to do their upselling subtly. When browsing or buying items, buyers get a question asking them if they “want an even more flexible and roomy carry-on?” and point them in the direction of the upgraded, expandable version of the suitcase they were looking at prior.
Customers willing to pay a premium price would naturally turn to the higher-end suitcases as the site subtly promotes the item’s benefits. Travel Away’s website also features a side-by-side comparison, making it easier for consumers to see the product distinctions and perks.
And lastly, buyers can have their purchase personalized for an additional £10 (€11.68) with a custom luggage tag with any three foil-stamped letters of their choice. Considering they are already investing in something expensive, the extra fee is low enough not to make much of a difference.
Healthspan is a health supplement retailer that does its upselling via subscription instead of a one-time purchase. It starts at the same price with subsequent cheaper monthly payments. It’s another effective yet subtle upselling tactic as subscriptions entail repeat payments (until customers cancel it).
To Sum It Up
Upselling and cross-selling are two important sales tactics for businesses in any industry to explore, especially small retailers. Doing so grants them opportunities to increase customer lifetime value and foster repeat purchases, brand loyalty, and brand advocacy.
Those in e-commerce can also dig into the data to better understand which items or services would be the most appropriate to the customer.
An excellent way to do these on your e-commerce platform is to apply good copywriting strategies and marketing tactics from relevant brands in the same market. Dollar Shave Club, Look Great, Away Travel, and Healthspan are some of the related brands to follow.
Should you need a professional content writing service for the beauty industry, please contact us to kickstart your upselling and cross-selling strategy.
How did you like Sebastian Scheplitz’s blog post “The Art of Creating Great Upselling and Cross-Selling Strategies”? Let us know in the comments if you have anything to add, have another content idea for beauty content marketing blog posts, or just want to say “hello.” 🙂