Did you know that 35% of Amazon’s revenue comes from upselling and cross-selling? HubSpot conducted a survey of 500+ salespeople and found out that 74% of them who cross-sell increased up to 30% of their revenue.
Are you ready to skyrocket your revenue through effective upselling and cross-selling strategies?
Increasing your revenue through upselling and cross-selling is an art. It’s a win-win situation where both the business and the customers can benefit.
However, many companies jump into these tactics without considering their buyer’s intent or choosing the wrong approach. This eventually leads to negative customer experiences.
As an entrepreneur or business manager, it’s crucial for you to understand that successful sales funnel upselling and cross-selling require a deep understanding of your customer’s needs and wants. If you don’t know what they’re looking for, you’ll end up recommending products or services that don’t fit their interests.
In this blog post, we’re going to identify top upselling and cross-selling strategies in a sales funnel. Before we dig deep, let’s quickly define what is upselling and cross-selling!
What is upselling?
Simply put, upselling is a common sales strategy that involves encouraging your customers to upgrade their purchase or opt for a premium version of the product or service they are interested in.
In other words, you lead your customers to make a higher-cost purchase than they have originally planned. The goal here is to generate more profit by leveraging the momentum of purchase. If you carefully evaluate your sales funnel, you’ll be able to identify so many upselling opportunities.
Let’s take a couple of sales funnel upselling examples to understand this better.
Starbucks offers several upsell options such as adding an extra shot of espresso or opting for a larger size of the drink. Another example is McDonald’s where they offer combo meals as an upsell option.
These examples show that upselling can be a lucrative strategy for businesses across various industries. Researching upsell options and implementing them in your business can help increase revenue and customer lifetime value.
What is cross-selling?
Cross-selling is when you offer additional or complementary products to your customers’ primary purchase. For instance, when a customer buys a serum, a seller may recommend they buy a facial roller to improve their skincare routine. Or, when a customer purchases a watch, a seller may suggest they also purchase an extra watch band to keep the watch in good condition.
Cross-selling is a great way to increase revenue while also providing customers with products that complement their initial purchase.
Imagine you walk into a coffee shop and order a latte. The barista then asks if you would like to add a pastry to your order. He explains that the croissants have been freshly baked that morning and would pair perfectly with your latte. In this scenario, the barista is using cross-selling to suggest an additional item that complements your primary purchase and enhances your overall experience.
So, now that we understand these strategies, let’s talk about some brilliant upselling and cross-selling strategies you can use in your sales funnel.
Top 8 sales funnel upselling and cross-selling strategies
While cross-selling or upselling can take place at any point in your buyer’s journey, you need to focus on identifying the right sales opportunities.
1. Understand your audience
You probably have heard about the importance of knowing your audience in almost every other marketing blog. Whether you want to upsell or develop any other marketing strategy, you get to know your prospects and customers.
While creating buyer personas can be an effective way to understand your audience, you need to delve deeper into the characteristics and preferences of your existing customers. By gathering demographic and psychographic information and customer feedback, you can develop personas specific to your customer base and gain insight into their objectives and pain points.
For example, let’s say you run a computer hardware store and you want to upsell to customers who are buying a new laptop. If you understand your audience, you would know that some customers prioritize portability while others prioritize processing power.
With this understanding, you can recommend a lightweight laptop with long battery life to the first group and a more powerful laptop with a larger screen to the second group. This tailored approach increases the chances of a successful upsell and a satisfied customer.
A thorough research into your audience’s needs will also make it easier to identify the products that would be most valuable and pertinent for upselling or cross-selling. Understanding your customers on a deeper level will allow you to tailor your marketing efforts and increase the chances of successful upselling and cross-selling.
2. Understand the concept of a sales funnel
Once you clearly define who your audience is and what they really want from you, you would be able to build a strong sales funnel. However, you need to have a clear picture of the different stages of your customer journey.
Use your sales funnel as a powerful tool to understand the customer journey and then optimize it as you gain more insights and data. Keep identifying areas where you can improve conversion and, eventually, grow your business. When it comes to upselling and cross-selling, your focus should be on the middle and bottom stages of the sales funnel. In the middle stage or the consideration stage, your customers have already shown some interest in your products or services.
This is where you can offer additional products or services that complement your customer’s initial purchase. In the decision stage, your prospects are close to making a purchase decision. At this point, you can come up with add-ons and bundle deals.
However, make sure to carry out cross-selling or upselling in a way that is genuinely helpful to your customers and adds value to their purchases. Don’t push irrelevant or unnecessary products or services that can harm your customer’s trust in the business and ultimately hurt the business’s bottom line.
3. Identify the right opportunities
To find the perfect upsell and cross-sell opportunities, you need to study your customers’ experiences across all touchpoints. Take a journey-based approach: it is a crucial step in identifying new cross-sell and up-sell opportunities. By continuously managing and measuring journeys, you can better understand your customers’ interests, behavior, and goals.
In today’s e-commerce landscape, analytics makes it super easy for businesses to analyze millions of unique customer interactions across various channels like web, voice, mobile, email, and more. Understanding your customers’ interests and preferences will help you make cross-sell or up-sell offers at the right time.
For example, let’s say you run an online clothing store, and a customer has just added a pair of jeans to their cart. Based on their purchase history and browsing behavior, you notice that this customer likes to buy items in a similar color and style. Using these insights, you could offer them an upsell on a matching shirt or jacket that would complement their jeans. You could even offer a discount if they purchase the additional item with their jeans.
So, make sure to use data analytics tools and customer segmentation techniques to group customers based on their interests, purchase history, and behavior.
4. Develop a targeted messaging strategy
Why did people buy from your store in the first place? What do your customers say about your products and services? What common patterns do you observe in your past customers? Answering these questions will help you think like your previous customers. This is where you can effectively sell to them again.
Let’s say you sell fitness equipment and a customer has purchased a set of dumbbells from your website. Now, analyzing their past purchases and behavior can help you understand their fitness goals, exercise routine, and what other equipment they may need in the future.
You can use this information to create personalized messaging that speaks to their specific fitness needs. For example, you could send them an email with workout tips and a discount code for a new set of resistance bands that complement their existing equipment. Or, you could show them an ad featuring a fitness influencer who has achieved similar goals using your equipment.
By investing time in understanding your buyer personas and crafting messages that appeal to their wants, needs, and desires, you can increase your chances of successfully upselling past customers. Remember to be strategic in your messaging and tailor it to each individual buyer persona for maximum impact.
5. Keep a reasonable price margin
To successfully upsell, it is important to maintain a reasonable price margin. For instance, offering an upsell that is significantly more expensive than the original purchase may not be effective. Ideally, the upsell price should be no more than 150% of the original purchase price.
However, it is also important to balance profits with relevance and affordability for the customer to keep them engaged. Avoid always going for the highest margin and focus on offering relevant and valuable upsells.
6. Narrow down choices
Have you ever faced a situation where you have so much information or choices but failed to take any action? This is called analysis paralysis. When you give your customers too many choices, they might end up buying nothing.
Having a wide range of choices is often thought to be better for consumers, but the paradox of choice suggests that too many options can actually lead to indecision and reduced satisfaction.
A study demonstrated this effect by setting up two booths selling Wilkin and Sons Jams. One booth displayed 6 jam varieties while the other had an assortment of 24 jams.
60% of people flocked to the large booth and only 40% stopped by the one with fewer choices.
While the larger booth with 24 jam varieties attracted more visitors, only a small percentage of them made a purchase.
In contrast, the smaller booth with only six jam varieties had a higher purchase rate among visitors. This suggests that providing a limited but carefully curated selection may lead to better outcomes for both consumers and businesses. Try to apply this study to your cross-selling strategies.
Related: Why do we have a harder time choosing when we have more options?
7. Offer products in bundles
Product bundling is of immense significance when it comes to cross-selling. Instead of marketing products individually, you bundle the main product with complementary products and offer them as a package. The good thing about product bundling is that it reduces the steps a customer has to take to make a purchase.
Bundling also simplifies the decision-making process for customers. What should be your product bundling strategy? Once again, you need to delve into your customers’ past experiences and understand their biases to master product bundling.
To get some inspiration, study “Happy Meal” from Macdonald’s. The Happy Meal is a bundle that includes a burger, fries, a drink, and a toy. They bundle these items together to offer customers a complete meal with a fun surprise for children, which encourages repeat purchases and customer loyalty.
Related: 15 Customer Retention Tactics To Supercharge Your Business
8. Train your team to upsell and cross-sell
Your business success largely depends on your team’s ability to sell. To effectively upsell and cross-sell, it’s important for sales representatives to have a deep understanding of the customer’s needs. They should ask probing questions throughout the sales process to identify the right products and services for the customer, as well as upselling and cross-selling opportunities.
Establishing a long-term relationship and building strong customer loyalty is key to successful upselling and cross-selling. Sales reps can achieve this by building rapport with customers through personalized interactions and providing valuable insights into their needs.
By doing this, reps can create a sense of trust and credibility with customers, which can result in increased customer satisfaction and retention. The following are tips for encouraging your team to upsell and cross-sell in your sales funnel:
- Your sales teams should proactively schedule biannual check-ins with customers to review progress, assess satisfaction, and identify opportunities for expansion.
- Salespeople who are hesitant to check in with current customers should be encouraged to do so, as it can provide valuable opportunities to upsell or cross-sell.
- To effectively sell new products or services, help with regular training sessions for the sales, support, marketing, and operations teams covering product functionality.
Upselling and cross-selling strategies are highly effective ways to help your customers make better decisions and improve your bottom line. However, it’s important not to rely on guesswork when determining which techniques will work best for your customers or business.
Instead, conduct A/B tests on various upsell and cross-sell strategies for different visitor segments. This will help you determine which approach is most successful for each group, resulting in increased sales. By tailoring your approach to each segment, you can maximize the effectiveness of these strategies and help ensure long-term customer satisfaction and more revenue.