From the course: Cross-Selling

Cross-selling versus upselling

From the course: Cross-Selling

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Cross-selling versus upselling

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- Recently, I took my family to the movies. As per our usual routine, we headed straight to the concession stand for the treats. I ordered the smallest soda and the medium popcorn. Well, the young lad behind the counter then asked, "You know for only 25 cents more, you can get the large soda "and for only 50 cents more, "you can get the jumbo popcorn with unlimited refills." "Well, of course," I said, "Why wouldn't I do that?" Then he said, "Some folks like to add Swedish Fish "or chocolates to their popcorn "to get that sweet and salty taste going. "Would you like to add a box of either to your order?" At which point my wife chimed in, "Yes, I love that." What we just experienced was a combination of both upselling and cross-selling. Upselling is a sales technique where a seller induces the customer to purchase more expensive items, upgrades, or other add-ons as a strategy to make a more profitable sale. In our previous example, the concession stand worker used an upselling technique to convince me to buy the larger soda and jumbo popcorn. Cross-selling on the other hand is the action or practice of selling an additional product or service to an existing customer. In our movie going experience, being convinced to purchase the candy to go along with our popcorn was an example of cross-selling. Upselling is encouraging the purchase of anything that would make the primary purchase more expensive whereas cross-selling is encouraging the purchase of anything in conjunction with that primary product. In most instances, cross-selling generates far more incremental revenue than upselling. For example, the movie theater only made an additional 25 or 50 cents on the drink and popcorn upsell, but likely made an additional $2 to $3 by cross-selling me the candy. Both strategies can be effective and profitability so long as you've built trust with your customer and continue to add value to them with the additional features in the event of upselling or additional products in the event of cross-selling. Many times, cross-selling and upselling are often used interchangeably, but different scenarios with different customers can call for one specific approach over the other. Understanding the difference between upselling and cross-selling allows you to better articulate the benefits of your products and services to the actual challenges you're hoping to solve for your customers. The more you understand your customer's challenges, the better you can determine how to maximize your upselling opportunities but also when to begin leveraging your cross-selling strategy.

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