What is Upselling?
Upselling is a sales technique where the seller attempts to persuade the buyer to purchase a more expensive, often higher-end version of the product that they were interested in.
To break it down more simply, if you want to buy a $20 T-shirt from me, and I offer you a different shirt that is $25 dollars but made out of better materials, that is an upsell.
What is Cross-selling?
Similar to upselling, cross-selling is a technique where the seller attempts to persuade the buyer to purchase complimentary products along with the chosen product.
In other words, if you want to buy a $20 T-shirt from me, and I offer you a hat to go with it, that is a cross-sell.
What is The Difference Between Upselling & Cross-selling?
While both upselling and cross-selling increase average order value (AOV) by recommending products to customers, the strategy behind them is where they differ.
Upselling suggests that a customer should purchase a higher-end substitute product instead of the product they chose.
Cross-selling suggests that a customer buy a similar or complementary product along with the product they chose.
Advantages of Upselling & Cross-selling?
The main advantage of both upselling and cross-selling is that they both aim to increase order value.
In other words, they both increase the average revenue that the store earns from each customer.
Upselling specifically is a more straight-forward approach to increasing average order value, as it directly attempts to persuade customers to buy a more expensive product.
On the other hand, while cross-selling is still effective for that same goal, it can also be used to sell slow moving inventory.
For example, if a store sells a lot of cameras, but they don’t sell as many tripods and microphones as they would like to, cross-selling can be very effective at moving this inventory.
To continue with this same example, if I added a camera to my cart, the store may suggest that I purchase the camera, tripod and microphone as a bundle.
This kind of cross-sell technique can be incredibly effective, especially when used in conjunction with other promotions and discounts for purchasing the bundle over products individually.
Why is Upselling & Cross-selling Important?
With ecommerce, it is especially important to maximize the value of every visitor, customer, and purchase on your website.
These upselling and cross-selling strategies are two of the most effective, and therefore two of the most important tactics to increasing this value.
On the same track, these strategies are imperative when running paid ads in order to drive potential customers to your store.
The marketer must maximize the return on investment (ROI) or return on ad spend (ROAS) for any marketing campaign in order to maximize the revenue and growth of the company.
Successful upselling and cross-selling does exactly this. By increasing the average revenue earned from each customer, these tactics subsequently increase the ROI and value of the marketing campaigns that brought in those customers.
Intelligent Upselling & Cross-selling
Intelligent upselling and cross-selling refers to the use of AI Powered Product Recommendation Engines in order to make increasingly accurate and effective upsells and cross-sells.
The use of artificial intelligence in this strategy allows the marketer to leverage onsite user behavior, real-time inventory, , purchase patterns, and more to make product recommendations increasingly more accurate.
Tools like Justuno’s Commerce AI make leveraging these advanced techniques and artificial intelligence easy and straight-forward.
Conclusion
Upselling and cross-selling can be incredibly effective strategies when it comes to increasing average order value and overall revenue.
By showing visitors relevant, personalized messaging they improve onsite experiences and be some of the most effective promotions you create!
There are a lot of considerations, tools, and tactics that can make your strategy successful. All of which, including artificial intelligence tools are available here at Justuno.
Check out our upsell and cross-sell tools to get started!
