What are Upsell and Cross Sell? Principles and implementation strategies

Currently, Upsell and Cross sell strategies are chosen by many businesses to increase revenue and profits. In the article below, 1C Vietnam will introduce in detail the concepts of Upsell and Cross sell , the benefits and core principles of these two strategies.

1. What are upsell and cross sell?

Upsell and Cross sell are two effective marketing strategies that help businesses increase sales and order value.

Upselling is the sale of an item of higher value to a customer who is viewing or has already purchased the original product or service. For example, a cell phone store might suggest customers upgrade to a higher-end version of the phone they're looking at.

Cross selling is the sale of products or services that are complementary or related to the item a customer has selected or is viewing. For example, a camera store might suggest customers buy additional camera bags, memory cards, or camera cleaning kits.

Both Upsell and Cross sell can be used in a variety of industries, including retail, services, and e-commerce. To do so effectively, businesses need to understand their customers' needs and desires so they can recommend appropriate products or services.

2. Benefits when businesses apply Upsell and Cross sell strategies

Up selling and Cross selling are sales strategies that aim to convince customers to buy additional products or services beyond the item they are intending to buy. These strategies can bring many benefits to businesses, including:

2.1. Increase profits

The first and most obvious benefit of Upsell and Cross sell is increased profits. In particular, Upsell helps businesses sell products or services that are priced higher than what customers intend to buy. Cross selling helps businesses sell other related products or services.

For example, a customer is buying a smartphone. Salespeople can Upsell by recommending customers to buy an additional case or headset. Salespeople can also cross sell by recommending customers to buy an additional warranty package or repair service package.

2.2. Increase customer loyalty

Businesses applying Upsell and Cross sell strategies will focus on providing users with all suitable products so they can make the most optimal choice. For example, when a customer buys a phone and is introduced to a phone insurance plan by the salesperson, they will feel more secure and are likely to purchase from that store again in the future. .

2.3. Increase ROI

Successfully applying Upsell and cross sell to the sales process means businesses can sell more products or services to current customers. Thanks to that, the company can reduce marketing costs because it does not need to spend additional budget to reach new customers, and ROI is also improved.

2.4. Bring convenience and flexibility to customers

Up sell and Cross sell help customers shop more conveniently and flexibly. When businesses suggest related products, customers will be able to shop for all the necessary products without having to waste time searching.

For example, a person is shopping for clothes. When a customer chooses a dress, the salesperson may suggest buying a coat or a hat to coordinate the outfit. This helps customers shop for all the necessary products without having to waste time searching.

3. Core principles of Upsell and Cross sell

Up sell and Cross sell are two sales strategies that can help businesses increase revenue significantly. However, if not implemented properly, these two strategies can have the opposite effect, making customers feel uncomfortable and reducing sympathy for the business.

For successful application, in addition to understanding the definition of Cross sell and Upsell, businesses need to pay attention to the following principles:

3.1. Building trust

Trust is the foundation of every customer relationship. To build trust, businesses need to understand customer needs. By understanding customers, businesses can predict and provide appropriate products and services.

Businesses need to proactively listen and understand customer needs. This can be done through channels such as:

• Customer surveys: To understand current customer needs, businesses can organize surveys to collect feedback.
• Interaction with customers: Businesses can interact with customers through channels such as websites, social networks, email,... to listen to opinions and answer questions.
• Data analytics: Companies can analyze data about shopping behavior to better understand customer needs and wants.

3.2. Track the customer journey

To sell the right products to the right people at the right time, businesses need to track customers through CRM to understand their needs and shopping behavior. A CRM that integrates effective features will help businesses capture customers comprehensively and allow all employees to participate in the customer journey.

3.3. Be a consultant, not just a salesperson

Instead of just focusing on sales, employees need to become consultants, understand customer needs and offer appropriate solutions. To do this, sales staff need to have in-depth knowledge of products and solutions, not just common customer manipulation tricks.

3.4. Everything starts from customer needs

Upsell and Cross sell are two effective business tactics to increase revenue. However, not all product groups are applicable. Therefore, businesses need to be cautious in using these two tactics. Instead of stuffing customers with unnecessary products, businesses should focus on meeting the real needs of buyers.

4. Some strategies for implementing Upsell and Cross sell

To effectively upsell and cross-sell , businesses need to have a deep understanding of customers' needs and desires, as well as the products and services offered. Here are some popular Upsell and Cross sell implementation strategies:

4.1. Upsell Strategy

4.1.1. Upsell at a bargain price - Tapping into customer psychology

This Upsell strategy is based on the shopping psychology of customers who always want to benefit from incentives and promotions. When offered to buy a product at a bargain price, customers will often accept it more easily.

Note that when Upselling at a bargain price, businesses need to ensure the price is realistic and comparable to many similar products on the market. In addition, businesses also need to pay attention to the original price of the product to avoid misleading customers.

For example: A clothing store is selling a shirt at the original price of 500,000 VND. When a customer is considering buying this product, the salesperson may suggest purchasing a pair of casual pants for 300,000 VND. The total value of both products is 800,000 VND, but customers only have to pay 600,000 VND, which is a 20% discount.

4.1.2. Storage limits

Based on customers' shopping psychology of fear of losing opportunities, storage limits become an effective Upsell strategy. When customers know that a product is limited, they will tend to buy it immediately to avoid missing out.

To apply this strategy effectively, businesses need to ensure that the product is truly limited. In addition, businesses also need to pay attention to storage limits. If the order time is too early, customers may not have the need to buy the product.

For example: A phone store is selling a new phone for 10,000,000 VND. The store can set up a 50% discount promotion for this product, but only applies to the first 100 customers.

4.2. Cross sell strategy

4.2.1. Always prepare the product before asking

Businesses need to ensure that salespeople always have additional products available to meet buyer needs. For example, if a customer buys a laptop, staff can advise buying additional mice, keyboards, mouse pads, etc. Businesses note that additional products must be suitable and related to the main product.

4.2.2. Matter determines consciousness

The common psychology of customers is that when they buy a certain product, they tend to buy other related products to create synchronization and harmony. For example, when buying a new shirt, customers often want to buy an additional pair of jeans or a skirt to go with it.

To apply this strategy effectively, businesses need to identify related products that can be cross-sold with the main product. In addition, businesses also need to have a reasonable display, helping customers easily see the relationship between product categories.

4.2.3. Update website regularly

Website is an important sales channel for many businesses. Therefore, regularly updating the website is necessary to attract customers and increase sales.

When updating the website, businesses need to pay attention to new products/services, promotions, and offers. Not only that, businesses also need to ensure that their website is designed to be user-friendly and easy to search.

4.2.4. Take advantage of the "buy on" trend

The tendency to "buy on" is a common phenomenon in sales. Accordingly, customers often tend to buy products/services that others have bought or used. Businesses can take advantage of this trend to increase sales by introducing products/services that are popular or highly appreciated by many people.

4.2.5. Offer more preferential offers

To cross sell successfully, businesses can offer many promotional offers, such as discounts, gifts, free shipping, etc. This is an effective way to attract customers to buy more products. product/service. However, businesses need to ensure that these incentive proposals are reasonable and consistent with customer needs.

4.2.6. Selling by combo

Combo selling is a strategy of selling a group of products at a more favorable price than buying each product individually. This strategy can be effective in increasing sales of less popular products. For example, a business can sell a combo of a phone and a headset at a more favorable price than buying two separate products.

4.2.7. Discount for 2nd purchase

This method is similar to combo sales, but the business will give a discount for the customer's second purchase. This will encourage customers to buy more products next time.

In summary, Upsell and Cross sell are effective strategies to help businesses increase profits. In particular, Upsell is often applied during the stage when the customer is considering the product/service, while Cross sell is used when the buyer is or has paid for the product. If they want to apply a successful strategy, companies need to carefully research consumers' shopping behavior, learn about the benefits of goods, and be able to recommend suitable products. To update more useful information about business operations, don't forget to follow other useful articles on 1C Vietnam's website.