When it comes to eCommerce, there are many key terms that are important to know. When we were first launching our in-house eCommerce brand, DermWarehouse, with every article I read, I would have to look up a lot of the verbiage. I wondered if I would ever become fluent in the language that is eCommerce!
One of the first set of terms I needed to learn was the difference between an upsell and a cross-sell, and it took me some time to fully understand this. We were setting up our website and every product page and WooCommerce asked me to plug in products for both of these. This was a lot of work, and I knew it would be important in how our customers shopped so I wanted to get it right.
So what is the difference between these two key eCommerce terms?
The Difference Between an Upsell and a Cross-Sell
To put it simply, when you upsell, you try to encourage customers to purchase a higher end product than the one they’re considering. Cross-selling, on the other hand, aims to get customers to purchase related or complementary items.
Let’s dig into this a little bit more.
What’s an Upsell?
According to Shopify, “upselling is a sales technique that encourages customers to spend more money by buying an upgraded or premium version of a product being purchased.” It relies on customers wanting to get a higher end or better version of a product and being willing to spend more money on this.
Examples of Upsells
Let’s say you wanted to buy a pair of jeans from Nordstrom. You’re looking at a brand that costs $48. On the Nordstrom site, they will show you images of several other pairs of jeans, each with a higher price point than the one you’re looking at. They all look pretty similar, but you start doing a little more research. The $48 pair only has a 3.5 star rating, but the $60 pair has a 4.5 star rating. Maybe you’d want to switch because of that.
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Someone wrote that the $48 pair stretches after every use. You read the reviews of the $60 pair and several people say that the fit is amazing and they never stretch out. The $48 pair is a brand you’ve heard of before, but you don’t think is very well known. Nordstrom also shows you a picture of a $98 pair that you recently saw your favorite actor wearing in a movie. You recognize those jeans immediately and decide to go with the $98 pair, because they must be trendier. You started off looking at a $48 pair, but you were upsold to the $98 pair based on brand popularity.
Now let’s imagine you’re shopping for a car. You go to your local car dealer and they’re trying to upsell you hard. Before you walked in the door, you had decided you want to get a Jeep Cherokee and there was no changing your mind. The dealer, however, still sees an opportunity for an upsell. He shows you the version of the car with leather seats, a heated steering wheel, an automatic trunk, and a sunroof. Although he knows you’re sticking with the jeep, he’s trying to get you to spend more money by upgrading the version you end up driving home.
Not only can you upsell physical goods, you can also upsell on services. We do it all the time at The Media Captain. Each potential client that comes through our door has certain services in mind. Maybe we talk to a real estate company that is interested in paid advertising. He’s interested in running a few ads on Google. We tell him how much success we’ve seen with paid ads on Bing and how great we feel that social media ads would do for him to promote his listings visually. He walked in the door only thinking about Google ads, but now he’s interested in running ads on multiple platforms.
Learn More: Do People Actually Click on Google PPC Ads?
Are there always upsell opportunities?
While these three examples make upselling seem easy and obvious, it’s not always this way! DermWarehouse is a perfect example. We sell professional strength skin care that is on the higher end price-wise. We sell some less expensive products that have good upsell opportunities, but most of our top brands and most popular products don’t have great upsell options. There are of course other brands that customers can go with, but most of them are at the same price point. For us, cross selling makes much more sense.
What’s a Cross Sell?
According to Shopify, “Cross-selling is a sales tactic used to get a customer to spend more by purchasing a product that’s related and or supplementary to what’s being bought already. Cross-selling increases revenue per order.”
Examples of Cross-Selling
Let’s use some of the same examples as above to explain cross selling!
You’ve decided on your $98 pair of jeans while shopping online at Nordstrom. You can’t wait for these to come in the mail and to wear them out for your birthday dinner next month. You add the jeans to your cart, and you receive a popup that asks you if you want to keep shopping or if you’re ready to checkout. You notice that on the popup, Nordstrom is showing you an amazing pair of shoes that would look incredible with the jeans for your big birthday dinner. They also show you a purse and a sweater that both seem to have been picked out to exactly match the entire outfit that you’re already dreaming about. This is no accident, it’s a cross sell!
As we continue talking to our real estate client for The Media Captain, we realize that social media and email marketing would also greatly help their marketing efforts by helping to showcase their available listings (social media) and then keep interested buyers or renters in the loop when new real estate becomes available (email marketing). We also discover that they don’t have great photos on their website of their available listings and we recommend a photography package. They end up signing an agreement for all three four, when initially, they had only been thinking about one.
Learn More: eCommerce Email Marketing Statistics
We do a lot of cross-selling for DermWarehouse! We know that when it comes to skin care, many people aren’t looking for just one product, they’re looking for an entire routine! If someone comes to our site looking for a moisturizer, we make sure to also show them a cleanser, a serum and a sunscreen. If someone’s looking for a product to help with dark under eye circles, maybe they’ll also be interested in a brightening eye mask and a lash enhancing serum. If someone’s looking for a shampoo, chances are they’ll also want a conditioner and a styling product as well.
We’ve really taken cross-selling to the next level at DermWarehouse. On every one of our product pages, we have a section called “Frequently Purchased With.” This section takes our purchase data from the past 6 months and will pull in the products most often purchased with whatever product you’re currently looking at. It shows you what other customers just like you are buying when they’re purchasing any given product, so you’re not just taking our word for it, you’re seeing what’s actually popular among other shoppers on our site!
Why is Upselling and Cross-Selling Important?
There are many reasons that upselling and cross-selling are important. First and foremost, you’ve spent a lot of time and money driving traffic to your website or getting that customer in the door. You’ve run advertisements, paid a sales team and put time and effort into your marketing. Now they’re there and you want to make the most of them. Upselling and cross-selling can help increase your average order value (another very important eCommerce term!) and optimizes the value of each sale.
Not only that, it personalizes your customers’ experience! As I mentioned earlier, so many of the customers coming to the DermWarehouse site don’t just want a moisturizer or sunscreen, they want a whole skin care regimen! When I shop online, I love being shown a whole outfit that would look great, rather than just a shirt or a pair of shoes (I’m not great at clothes shopping so this is very helpful for me!).
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When you think about it, successfully offering upsells and cross-sells is a win-win. You increase your bottom line and your customer gets a better all around experience with your business.
- An upsell encourages customers to spend more money by buying a better version of the product being purchased.
- A cross-sell gets a customer to spend more by purchasing a product that’s related to what they’re already purchasing.
- Upsells and cross-sells are a win for the business because they increase revenue and take advantage of every customer coming through the door.
- They are a win for the consumer because they get a customized experience and offers them everything that they may want or need all in one place.
Interested in working with us for your eCommerce business? Contact The Media Captain!