Last editedApr 20222 min read
If your sales team is to be truly effective in generating cash flow and keeping the income rate of your business steady, it needs to understand upselling and cross selling. It also needs to know how to utilise the two techniques to maximise sales revenue. In simple terms, both techniques involve taking a one-off sale and using it to persuade a customer to make more purchases. There are, however, differences between upselling and cross selling which need to be taken into account.
What is upselling?
Upselling is the process through which a salesperson persuades a customer to purchase a more expensive version of an item. The item could be one that they have already purchased, or simply one they have agreed to purchase in principle. Your sales team may, for example, persuade a customer to invest in a premium version of a product utilising better materials, or a larger piece of work.
What is cross selling?
Cross selling refers to the process of persuading a customer to purchase goods and services in addition to those they have already agreed to purchase. If you sell a bike to a customer, for example, cross selling might involve persuading them to purchase a spare saddle, basket, helmet or other accessories. The key to both cross selling and upselling is to take a single sale and maximise the value to the company at the same time as enhancing customer satisfaction.
When to upsell or cross sell
In the majority of cases, it’s easier for a salesperson to upsell than to cross sell. This is because a customer is more likely to be persuaded to invest in a better version of an item they’ve already agreed to buy than a different and/or additional item. In some cases, upselling may not be an option, and cross selling will be easier if the new products being offered provide a clear and defined benefit in terms of the original purchase.
The following tips will make it far more likely that attempts to cross sell or upsell prove to be successful:
Bombarding a customer with too many options when they are making a purchase will confuse them, and could result in the customer leaving and reconsidering the purchase. Rather than upselling and cross selling for the sake of it, sales teams should understand that the techniques are only likely to work if the items being suggested will clearly benefit the customer in relation to the original purchase. Once a sales team has established a working relationship with a customer, they will understand that any upselling or cross selling attempts are genuinely based on maximising customer satisfaction rather than driving sales.
Know your options
Make sure that the members of the sales team understand every stage of each potential customer journey, and what items could be offered at each stage. Analysing this data will mean that the sales people are prepared to make the right upselling and cross selling suggestions at the right moment in each customer journey.
Some salespeople make the mistake of leaving any cross selling or upselling effort to the end of the sales process. This may seem to make sense, but this is the point at which customers have decided on the purchase they wish to make and may not welcome matters being complicated. It’s generally more effective to know the sales journey well enough that cross selling or upselling opportunities can be presented throughout.
We can help
If you’re interested in finding out more about how to cross sell and upsell effectively, then get in touch with our financial experts. Discover how GoCardless can help you with ad hoc payments or recurring payments.