- Marketing per ecommerce
Cross selling and up selling are sales and marketing strategies that allow you to increase the benefits for both customers and sellers in the context of a sales negotiation; in the first case the implementation is possible because by means of these strategies it is easier to evaluate the various offers proposed by the companies, in the case of the sellers, on the other hand, they can more easily present all the products and services they intend to sell: in this way it will be the sale is more likely to go through. The peculiarity of these strategies is that they can be of a sustainable nature and usually contribute to improving mutual relations between sellers and customers, in an atmosphere characterized by transparency and trust.
Up selling: definition
Upselling, literally over or increase, is a sales technique known in the marketing world also with the name up-sell and / or upsell, which occurs when a seller decides to assign a more articulated service to the customer. compared to the standard for which it had initially opted. In this way, an increase in turnover is obtained, ensuring that the profit expected by the seller is not diminished.
A practical example of up selling is in the restaurant sector when, with a slight price increase, you can have an extra portion or a drink, added to the basic menu. This strategy implies that the customer is convinced that he has saved, while on the other hand the company has certainly had a greater profit than initially expected or what it would have obtained if the consumer had limited himself to choosing a single piece.
The up-selling strategy can also be applied to business services where it is configured in the form of membership, which consists of a more conspicuous investment that has the ability to provide the user with greater functions; it also presents a certainly better level than the programs that belong to those who rely on standardized formulas or functions.
The up-selling strategy can therefore be used with a greater chance of success, in various fields, when:
- The customer is about to purchase the desired product or service;
- The customer is known in great detail by the seller, certainly to the advantage of the latter;
- The customer is undecided, so he does not yet know exactly what type of product or service he is looking for, while the seller knows what could help or facilitate him and has a wide range of products available to bring to his attention. In this way, through the up sell, the seller directs the customer's choice towards a more articulated product or service than the one towards which he was initially oriented. Basically, this suggests the possibility of a greater profit for the seller.
Therefore, these precautions can easily lead to a more certain success of the negotiations, to the advantage of both the customer and the seller, in a shorter time than the norm.
Cross selling: definition
Cross selling, which literally means cross selling, might seem a sales technique equal to up selling, in reality it has a rather substantial difference with it: it is a marketing strategy that consists in the proposal to purchase an additional product, which is addressed to the customer who has already purchased another product or service, in the immediate past. In a nutshell, with this technique the aim we are trying to achieve is to sell a greater number of products connected to each other, even in the context of the same purchase process. By doing so, a closer relationship is established between the customer and the seller, based on the trust of the former in the latter, certainly also useful for any prospects for future relationships.
An example can be given by the motorway restaurants, where often, once arrived at the cash desk, after having paid for the chosen product, the customer is asked if he wants to buy an additional piece, even of a different type, compared to the one just bought, but at a price certainly facilitated.
The marketing technique of cross selling is often and willingly used in the electronic product market; in that context, in fact, both in physical and online stores, when the user goes to the cashier to pay or clicks on the cart, he is asked if he wants to buy a product related to the one just bought, at a discounted price compared to the normal one . For example, if the user buys a smartphone online, it is almost certain that the e-commerce will offer him the sale of a tempered glass for the screen, or a silicone protective case; moreover, it is also plausible that a discount will be offered for the eventual purchase of the entire kit.
The marketing strategy of cross selling is therefore useful in different cases than that of up selling:
- It has a better chance of success in the case of direct sales, at the exact moment in which the sale is about to be completed;
- In the context of online purchases, when the user who purchases the product opens the section dedicated to the shopping cart to pay;
- In the event that the seller has available products or services that, combined with the product chosen by the buyer, can improve the functionality of the product itself or can satisfy further needs related to it.
Up selling and cross selling: application examples
Up-selling and cross-selling strategies are used not only by small or medium-sized companies, but also by large retailers; in particular, it is e-commerce companies that fully exploit these marketing techniques to increase their online sales.
An example as simple as effective given the fame it enjoys is given by Amazon. The online sales platform, in fact, adopts the cross-selling strategy every day and constantly: when a user decides to buy a product on Amazon, in fact, already in the phase of choosing it, he has the possibility to see with which other products the chosen object is often sold; it is no coincidence that the complementary product is more often than not discounted. In this way the customer could be tempted to purchase an additional product at a visibly discounted price. When the user goes to the section dedicated to the cart and payment, the discounted complementary products appear again, thus influencing the customer.
Another example of cross selling is given by low cost airlines: when you buy your airline ticket online, they offer the buyer a whole series of ancillary services such as accommodation, rental car services, the possibility of purchasing food and drinks in advance to be consumed on board .. In this case, these are ancillary services to air travel in itself.
For the same airlines, it is also possible to cite an example of up-selling: when, at the time of booking, you are about to buy the ticket online, whether from an App or browser, the user is given the opportunity to purchase a higher value with a small surcharge: this is the case, for example, with seats. The up-selling technique occurs right when you are asked if you want to choose the seat you want most, perhaps at the head or tail of the plane, near the aisle or window, for a modest amount to add. at the standard ticket price.
A further example of simple understanding to explain up selling is that of large fast food chains such as McDonald's or Burger King. Often within these premises it is possible to find the standard menu of the individual pieces on sale and the combo version menus, characterized by the presence of a main piece priced almost normally and by the addition of an annex, which could be a portion of French fries or a drink, priced in a facilitated way. It is obvious that the customer prefers to save money by choosing the menu in the combo version, so his choice will easily fall on that type of product; at the same time, fast food will have earned a larger amount per capita. This technique is adopted not only on site, but also in food delivery platforms: in this case, moreover, we also play with the minimum prices for orders in order to obtain free delivery. In that case the customer prefers to spend a few euros more to reach the minimum price for free delivery, thus obtaining an additional product added to his order, rather than paying for the delivery, without being able to have anything else in return.
Up selling and cross selling: why use them
In light of what has been explained above and of the cases given as an example, it is easy to understand why cross-selling and up-selling techniques are advantageous both for the customer and for the seller.
Cross-selling is more suitable than up-selling in cases of direct sales and in cases of online sales, specifically in the moment immediately preceding the redirection to the virtual cart. As regards the possibility of using cross selling, it is versatile, therefore it can also be used by companies: thanks to this strategy, in fact, they can provide buyers with more and diversified types of services at more accessible prices; in this case there will be a clear advantage both for the customer, who can have a better accessory service at additional prices that are not exaggerated, and for the seller who will have obtained a greater profit and at the same time will have satisfied the customer, who will be more inclined , in the future, to return to him for new purchases.
As for the use of up selling, on the other hand, its management turns out to be a little more delicate, one must know the strategy well and master it in the right way. This technique, in fact, as specified above, is useful in the advanced moment of a commercial negotiation. Good knowledge of the customer by the seller is fundamental; the buyer must feel reassured and involved in the negotiation and must be made aware of the fact that by spending a little more than the basic solution, he is receiving an absolutely better product or service.
Further solutions: down selling
However, there may be times and situations in which a product has a price that is too high compared to the budget available to the customer and therefore he could be taken by doubts or he could hesitate due to some specific conditions concerning the purchase of the product. Indeed, there could be a case in which the buyer wants to stop the sale. In all these cases, up-selling and cross-selling techniques may not be efficient; for this reason it is possible to adopt a further strategy, known as down selling. It consists in the sales proposal, by the seller, of a product that falls within a lower range than that requested by the customer. This happens specifically when the seller understands that the customer does not have the necessary financial resources to purchase super-equipped products. In e-commerce this technique is certainly more difficult to adopt than the previous ones, but the impasse is often solved by purchasing products in batches; this sales method allows for a significant turnover of customers and products which, in a long-term perspective, greatly benefit the seller.
The two marketing techniques, up selling and cross selling, therefore, turn out to be more successful because they have a profound psychological character: in particular if the customer has already decided to buy, he will buy, but when he is already about to pay , will be more inclined to spend more if you offer them a better product or service at a cheaper price.
It is good, however, before throwing yourself into the use of these strategies, to get to know them in a thorough and conscious way, in order to be able to grasp all the advantages that derive from them.
Author: Stefania Tamberlani
CHIEF EXECUTIVE OFFICER
Stefania Tamberlani commercial, organizational and administrative hub of Arte e Informatica deals with relationships with customers and suppliers. He has a high level of knowledge in the configuration and management of the Joomla and PrestaShop platforms, from the configuration of payment methods to couriers, passing through the management of the catalog and orders.