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What is cross selling and upselling in retail?

20 Jun 2022 By PAYCEC

  • Cross-selling

Cross-selling is a sales approach that encourages a consumer to spend more by recommending a product that is linked to the one they are currently purchasing. Cross-selling and upselling are often confused. Cross-selling is recommending a related product or service to the consumer, whereas upselling entails upgrading to a better version of the item being purchased.

  • Upselling

Customers frequently upsell higher-end products using comparison charts. Showing visitors that different versions or models might be a better fit for their needs can boost AOV(*) and make customers happier with their purchases. Customers can imagine the value they will receive by ordering a higher-priced item when a company excels at upselling.

  • Similarities

Cross-selling and upselling are similar in that they both focus on adding value to customers rather than restricting them to previously purchased items. The business goal in both cases is to boost order value by informing clients about other product possibilities they may not be aware of.

  • What's the difference?

Cross-selling encourages clients to buy complementary or related products to expand their basket size rather than pushing them to buy a higher-priced item. Upselling and cross-selling offer different advantages, but when combined, they can help you grow sales and improve customer satisfaction.

In a cross-sell, you might suggest a three-pack of socks to a shopper who is purchasing boots. Offer a higher-priced pair of boots and ask the consumer if they'd like to improve their purchase to make it an upsell.

It's critical to be strategic at the correct time while up-selling or cross-selling.

Upselling unrelated products or being pushy can turn consumers away. You risk losing the original sale if you don't convert the customer.

Understanding what your customers value and then responding with products and features that actually match those demands is the key to success in both.

(*)AOV stands for Average Order Value

Definition of AOV: The average dollar amount spent each time a consumer submits an order on a website or mobile app is tracked by the average order value (AOV).

Simply divide total revenue by the number of orders to get your company's average order value.

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