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Article 9 min read

Upselling and cross-selling: Understanding the concepts and building a strategy

Upselling and cross-selling can deepen your customer relationships, but only if you deliver real value.

By Josh Bean, Senior Director, Product Marketing

Last updated July 29, 2021

“Do you want to make that a meal?”

It’s the most common offer at a drive-through window, and one most of us say yes to. It’s also a great example of cross-selling hard at work.

Next comes the inevitable follow-up: “Would you like to make that a large for a pound more?” Of course you would. Bam. You’ve just been hit with the upsell.

Fast-food restaurants well understand upselling’s meaning. They upsell and cross-sell with nearly every transaction, but these are valuable tools for your support team to use, too. To use upselling and cross-selling effectively, you’ll need to understand what the concepts mean and form a winning game plan.

Upselling vs. cross-selling

Both upselling and cross-selling are ways to promote your products and services and increase your revenue. Both are important techniques for offering customers additional items and increasing the value of customers’ average orders. But their similarities end there.

What is upselling?

Upselling is encouraging a customer to buy the bigger, better version of the product they already use.

The business benefits of upselling are pretty obvious. When a customer buys an upgraded version of your product, they’re spending more money. In turn, they get to enjoy a larger version of their chosen product, usually with extra features.

In a customer support environment, you could use upselling if a customer called to complain that their product had run out of licences. The obvious solution is to buy a bigger package with more licences. To effectively upsell, you’d want to propose this not as an extra cost but as a solution to the problem.

It sounds like your workforce is growing over there!” your support rep might respond. “Would you like to upgrade your subscription to our premium software package? That’ll give you 20 extra licences, plus a bunch of extra features to help your growing team.”

What is cross-selling?

Cross-selling is persuading a buyer to buy, not a better version of what they have, but another product altogether. It’s the “do you want fries with that” sales technique.

Cross-selling, like upselling, helps your business earn more money. But it’s also a good way to show customers other products and services you offer that would be helpful to them.

A sales rep might use cross-selling with a first-time client by suggesting they buy a bundle of necessary IT accessories for their product. A customer support rep, on the other hand, might use a cross-sell if a customer needs a feature their current software doesn’t have, but that another piece of software from the company does.

Bottom line: Upselling works by encouraging a buyer to upgrade their current plan. Cross-selling encourages a buyer to buy a second product or service.

Benefits of upselling and cross-selling

We’ve touched on the most obvious benefit of upselling and cross-selling for businesses: they help you make more money. But there are also long-term impacts of using these techniques.

Selling without sales

A salesperson randomly reaching out to a customer, encouraging them to spend more money, can easily come off as gimmicky. But a support rep can reframe the same sell positively if the product can solve a customer’s problem. Instead of coming across as pushy, support reps sound like brand experts, coming up with creative solutions.

Upselling and cross-selling can also show customers the value of products they may not have heard of before. It’s a great way to educate them on your product line while demonstrating how the product will help with their current issues.

Increases customer satisfaction

It may seem odd, but upselling and cross-selling can actually increase customer satisfaction and keep buyers around for longer.

Why? Because cross-selling and upselling create a custom buyer experience. It makes the customer feel like you’re creating a unique package just for them.

Today’s customers expect this level of personalisation. The 2020 Zendesk Customer Experience Trends report found that 76% of people actually expect personalisation. Offering suggestions tailored to customers’ needs with cross-selling is a great way to build satisfaction.

Upselling and cross-selling also simplify the customer’s decision-making process. If they’re happy with your service, most customers would prefer buying multiple products from one company to shopping around. In fact, a recent PYMNTS report found that almost 70% of buyers are interested in bundling. By making your buyers’ lives easier by providing all-in-one services, you’re likely boosting their trust in your brand.

Helps you stabilise revenue with greater retention

Along with making you more money initially, cross-selling and upselling also help you stabilise revenue.

Both tactics decrease the likelihood of customers turning away. If a customer uses several different solutions from your company, dropping your brand altogether is harder to do. They may stop using one product if it isn’t a good fit, but you’ll lose only a small portion of income. A customer who uses only one product can disengage more easily.

Here’s the best part: customers who stay on with upgraded accounts and more products represent a lot of potential revenue. An Invesp study found that the success rate of selling to an existing customer was 60-70%, compared to 5-20% for a new customer. By encouraging retention with upselling and cross-selling, you boost your chances of successful sales.

4 tips for upselling and cross-selling in customer support

You may be sold on the value of using cross-selling and upselling in your customer support model. But before you get started, you need a foolproof strategy for success. Keep these guidelines in mind as you build out your strategy.

1. Keep it real

Customers can tell when your top concern is making money, not helping them solve their problems. For a cross-sell or upsell to work, it needs to build value for customers.

The key here is active listening. Before you make a sales-based suggestion, make sure you understand the buyer’s current concerns. Repeat the customer’s words back to them to make sure you’re correctly grasping the issues. Then, suggest an upgraded product or additional product, if it will solve their problem.

Another tactic is continually studying your customer base. Buyers are more likely to trust your recommendations if you’ve done the homework to prove you’re knowledgeable, both about your product and about their pain points.

Keep tabs on frequent problems and frequently asked questions, and monitor how your team solved those issues. If the solution involved a cross-sell or an upsell, consider how you might emulate the deal with similar customers.

A customer service rep’s primary job is to give your customer options to fix their issue. You’re a trusted resource, and the product expert in the relationship. Don’t lose sight of that in the name of making an upsell or cross-sell happen.

2. Try a bundle

The easiest way to turn a cross-sell or upsell into a convenient solution for a customer is to bundle products or services.

Brands usually offer bundles at a lower rate than buying the products separately. They’re still a win for your business, though, since people are more likely to accept a cross-sell if it’s a deal. As long as the bundle price isn’t too low, it’s better to secure the large order than say goodbye to a customer.

Some companies—like Apple—don’t even need to lower the bundle price. When you add an Apple TV to your cart, Apple’s site automatically suggests other components you may need with your TV, such as an HDMI cord or a mount. The bundle isn’t offered at a discount, but some people still often opt-in just for the sake of convenience.

Bundles are also great for adding another software suite to your customer’s current subscription. Say, for example, you’re fielding a message from a customer who uses your sales CRM but wants to add an automated call-recording feature. But there’s a catch: that feature is offered only with a second compatible product.

You offer the cross-sell, but the customer is hesitant because they need only one additional feature offered on another product. This would be a great time to offer to bundle the services for a reduced price. The customer gets what they need for a price that is more reasonable than buying both products separately, and it expands their account’s value.

3. Use chatbots to offer upsells and cross-sells

If your business uses AI chatbots for support, you can put them to work to help with your cross-sell and upsell strategies. Make suggestions for additional or expanded products part of the bot’s go-to solutions responses. Set a script so that if a customer asks for more information on the new product or upgrade, they’re automatically transferred to a live agent.

Making bots a part of upselling and cross-selling streamlines your messaging support process. If the customer isn’t interested in upgrading or purchasing new products, the bot can direct it to other solutions, taking the strain off your live reps.

Customers are also likely to feel less pressure when a bot rather than a rep suggests an upgrade or a new product. They know they’re not talking to a human, so they’re more comfortable saying no if they’re not interested.

4. Be tactful

Make sure you use discretion when it comes to suggesting an upgrade or additional product to a customer. Ask yourself if it’s the right time to make this offer, given the customer’s background with your brand.

Tact is especially important if the customer is unhappy. Never try to squeeze more money out of an unhappy customer. When emotions are running high, they’re not in a position to give you the benefit of the doubt. Any suggestion from you about spending more money will likely sound self-interested.

If the situation is tense, preserving the customer relationship is more important than making a sale. This focus will likely make you more money in the long run. Remember: You’re the solutions person, not the sales team.

Sell up, don’t sell out

To successfully blend sales and support, you have to make sure the sale is offered at the right time. One great way to do that is to use a CRM to keep track of where your customer is in their lifecycle. Zendesk’s sales CRM includes both our support and sales offerings to make lifecycle tracking easy.

Use a customer’s lifecycle information to suggest the right products or upgrades based on where they’re at in their customer journey. You could also create a product decision tree, showing which products complement each other for different client types. Use this information to give your customers a personalised experience that feels anything but salesy. 

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