What’s the difference between cross-selling and upselling?

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Cross-selling is encouraging the purchase of anything in conjunction with the primary product. For example, if a customer has already purchased a subscription to your marketing tool, cross-selling would encourage that customer to purchase a subscription to your CRM.

If your company offers a separate product or service that can complement or enhance a customer’s initial purchase, cross-selling can be an excellent opportunity to generate extra revenue.

Cross-Selling a Cheeseburger

Say you work at a fast-food franchise, and a patron orders a burger. If you wanted to cross-sell, you would offer additional items to make for a complete meal.

For example, you might ask if they want to add an order of fries and a milkshake to go along with the burger. In this case, you’re building around the initial purchase with complementary products.

Cross-Selling Example

Imagine you work for an ed-tech company that sells a suite of automation software to assist university administrators. You offer three products — one for curriculum planning, one for classroom scheduling, and one for academic reporting.

You’ve connected with a college that has agreed to buy your curriculum planning software. If you wanted to cross-sell them, you’d pitch them one or both of your other products and explain how they work together to simplify academic administrative tasks.

In this instance, you wouldn’t be offering an upgraded version of the software the prospect purchased, but separate products that complement one another in the interest of alleviating their pain points.

What is upselling?

Upselling is encouraging the purchase of anything that would make a customer’s additional purchase more expensive with an upgrade, enhancement, or premium option.

With upselling, you’re not offering lateral products to complement your customer’s initial purchase — you’re offering an upgraded or premium version of the product they’ve just agreed to buy.

In short, you’re “piling on” on a product when upselling — not “building around” it.

Upselling a Cheeseburger

Let’s continue with the fast food burger example from above. To upsell a burger, you’d offer options for a more elaborate burger. So, for example, adding a slice of cheese or a pickle for an additional fee. Or, you could tell them about a higher-quality cut of beef they could choose for a small premium.

You might try to get them to add an extra patty or a few strips of bacon for an additional fee — or you could tell them about a higher-quality cut of beef they could choose for a small premium. One way or another, you would take the central item they agreed to buy and sell them on ways to enhance it.

Upselling Example

For a more realistic example, consider a business that sells sales automation software to small-to-medium-sized businesses. The company offers three tiered plans with additional features on more expensive plans.

A rep from the company is currently working out a deal with a small business that’s agreed to purchase the least expensive of the three available options. If the rep wanted to upsell their prospect, they would likely tout the relevant features the middle-tier option offers that the lower-tier option doesn’t.

Let’s say the prospect’s business is maturing, so it will lean more heavily on accurate forecasting. In our scenario, the bottom-tier plan lacks the forecasting resources that the middle-tier option provides.

With that in mind, the rep might try to upsell the prospect by stressing how upgrading to the higher option will ensure that their business is adequately prepared to easily create accurate, productive forecasts as it expands.

What’s the difference between cross-selling and upselling?

The difference between cross-selling and upselling is in their names. Cross-selling adds to a sale through additional, lateral products that complement the initial purchase. Upselling adds to a purchase by selling a prospect an upgraded or enhanced version of the original product.

The terms are often used interchangeably, but the approaches for each are different. Continuing with the fast food example, you’d upsell by enhancing the burger itself with added toppings, but you’d cross-sell by offering more options in addition and separate to the burger.

With this in mind, let’s go over some techniques for cross-selling that will help you close the deal every time.