A good product is one of the key factors that provide a company with income. Product sales, however, may generate more profit when the right sales methods are implemented. There are strategies that can multiply the sales profits. Up-selling and cross-selling are strategies that are able to maximize the profit from a single transaction.
The technique of cross-selling is one of sales strategies based around a very simple procedure. The whole point of it is that when a client buys a product, they are offered additional options to go with this product that would complement it – complementary goods. What is important is to offer it to them after the purchase has been made.
This technique has one fundamental characteristic. At the time of offering the complementary goods, the client has already made the purchase and has an “open wallet”. They are willing to buy additional products for the one already bought. On top of that, it comes with no risks, as the client has already made their purchase. The worst that can happen is that they simply decline the suggested additional options.
Up-selling is a method that increases the value of the product being sold. Using this technique in a way means convincing the client to buy a higher class good – as in more expensive. It consists of negotiating with the client, by offering them improved versions of the product they are trying to buy, or higher tier ones – of Better quality.
The important thing is to do it smoothly and slowly. It is advised not to offer the client luxury products right away. It is the best to start with the “base” product (cheap one or the one the client claimed to have come for).
Then it’s time to offer minor extras, upgrades, a better product. It all has to be conducted slowly, to make it possible to observe the client’s reactions and notice which extras they are willing to accept.
Cross-selling and up-selling are different sales strategies – they differ both in the level of risk taken by the salesperson (cross-selling occurs after closing the deal, whereas up-selling during the sales process), as well as the skills necessary to succeed. In E-commerce, these differences aren’t quite that visible, though – in both cases it turns out that succeeding requires collecting information on the clients and their needs, as well as implementation of adequate technological solutions that allow to display suggested products.
Up-selling and cross-selling are techniques that can effectively increase the sales profits. When used appropriately, they can be profitable. Whereas cross-selling bears pretty much no risk, as it is used once the order is already placed, in up-selling it is necessary to watch out not to get carried away with offering better products – the client may give up on the more expensive product if they decide that it’s actually too much for them.
In such case, all of the better products acceptable by the client may end up not sold, and our efforts won’t bear any fruits.