Cross-Selling And Up-Selling | Meaning and Comparison

Are you a marketer? Have you heard about cross-selling and upselling? These are among the most common terms in the field of marketing. However, if you are still wondering the difference between cross-selling and upselling, then let's discuss. Before going to the differences, let's discuss these terms in brief.

What Is Cross-Selling?
Who should practice Cross-Selling?
What is Upselling?
Who should practice Upselling?
Importance of Cross-Selling and Upselling in business
Cross-Selling vs Upselling - Comparison Parameters
Cross-Selling vs Upselling - Differences
Conclusion
FAQs

What Is Cross-Selling?

Do you remember that last time when you went to the stationery shop to get a pen? Didn't the shopkeeper insist you on buying notebooks? Did you get the notebook as suggested by the shopkeeper? If yes, then you have made the shopkeeper's strategy of cross-selling successful. Hence, we can define cross-selling as gaining profits by making the customer buy products related to the desired product.

Who should practice Cross-Selling?

Cross-selling is very common and is done in all types of businesses. It is seen both in shops and malls. However, the product sold by convincing the customer essentially needs to be related to the product he/she wishes to buy. One can convince customers in various ways. There are various strategies and methods to convince customers. The seller decides the strategy to be used by him.

In the case of big business, the company should also provide incentives to workers for getting successful cross-sells. While implementing the cross-selling technique, the seller needs to be polite. He should not force the customer to buy the product. The products provided should also be of remarkable quality. Proper planning and service to customers can lead to huge profits in business.

What is Upselling?

Let's take the same example of a stationery shop to understand upselling. Suppose you went to the stationery shop to get an ordinary pen. But, the shopkeeper insists on having a Parker pen. Did you bring the Parker pen instead of the ordinary pen you had decided? If yes, then you have made the shopkeeper's strategy of upselling successful. Hence, we can define upselling as gaining profits by making the customer buy better products in comparison to what was requested by the customer.

Who should practice Upselling?

Upselling can be practiced by anyone who wants to increase their profits in business. However, proper strategies and tricks are needed to execute upselling properly. The seller needs to have proper communication skills to convince the customer. Knowing the tactics of convincing the customer is the key to earn greater profits by upselling.

In the case of big business, the company can promote its products by upselling. The workers are taught about this skill from the beginning. Salary hikes are provided to workers who successfully sell better quality products. This technique needs proper guidance and experience for successful implementation.

Importance of Cross-Selling and Upselling in business

Both the techniques, cross Selling and upselling, should be used for serving better products to the customer. The seller shouldn't cheat the customer to get profits. By doing so, he will lose his customers thereby creating a negative impression in the minds of the audience.

When used properly, both these techniques can prove to be extremely beneficial for getting customers and profits. The main advantages of these techniques to a marketer are:

1) Improving the retentively of customers

2) Increases orders thereby generating profit

3) Builds a healthy relationship with customers thereby increasing Customer Lifetime Value (CLV).

Cross-Selling vs Upselling - Comparison Parameters

Now let's compare upselling and cross-selling on various parameters.

Cross-Selling vs Upselling - Differences

Here are the main points of differences between cross Selling and upselling:

1) In cross-selling, the main purpose is to sell a product that might be helpful for the customer. The sold item must be related to the desired item of the customer. But, in upselling, the main purpose is to enhance the quality of services provided to the clients.

2) In cross-selling, many related items are sold. The total profit is derived from each one of these. But, in upselling, the higher quality product of a particular item is sold. The total profit is derived from the single item sold.

3) Cross-selling can be done by anyone. But, upselling requires a larger market with an adequate supply of products.

4) Cross-selling leads to an increase in the average amount of purchase and average sales made by the customer. Upselling leads to an increase in only the average amount of purchases made by the customer.

5) Cross-selling is beneficial both for the customer and for the seller. However, sometimes upselling may lead to losses for the customer.

Conclusion

Both cross-selling and upselling are the popular strategies used by companies to gain maximum profit. The customer gets better quality products as well as other essential products. However, both these strategies require different skills for implementation.

When these strategies are implemented systematically, there are chances of profits to both sides. These skills are mainly taught by the company. The workers who perform better thereby helping the company generate more profits are also rewarded. Irrespective of what the strategy adopted is, there is an increase in the company's turnover and profits. Hence, these strategies should be used by companies frequently.

FAQs

What is cross-selling?

Cross-selling is the method of gaining profits by convincing a customer to buy items related to their desired item.

What is upselling?

Upselling is the method of gaining profits by convincing customers to buy a better version of their desired item.

Which is better: cross-selling or upselling?

Cross-selling and upselling both are good for your company. However, the strategy which will prove beneficial for you depends on your company and products.

Which is more profitable, cross-selling or upselling?

Cross-selling is more profitable because it involves the sale of multiple products.