Upselling and cross-selling are the terms used in marketing. Upselling is the process of increasing the sales profit by convincing the buyer to increase the quality of his/her purchase. Cross-selling is the process of increasing the sales profit by increasing the number of sales. Both are required for a salesman for increasing the profit.
Upselling vs Cross-Selling
The main difference between Upselling and Cross-selling is that upselling increases the profit by promising a product of better quality and cross-selling increases profit by increasing the number of products sold.
Upselling as the name suggests is the increase in the expected sales. When a customer intends to buy a product, the seller insists the customer to check out for a better quality. He makes the customer believe that the same product which may be more expensive than his present selection, would be a better option.
Cross-selling is a similar pattern of sales in which the seller convinces the buyer to buy a product that may not be in his/her needs. This increases the profit of the salesperson as they get to sell an extra product that was not planned. This process of increasing the number of sales for a better profit is known as cross-selling.
Comparison Table Between Upselling and Cross-Selling (in Tabular Form)
| Parameter of Comparison | Upselling | Cross-selling |
|---|---|---|
| Definition | A better quality of the required product is being promised in upselling. | An extra product is being sold along with the required product in cross-selling. |
| Pattern | A similar item is sold which was intended by the customer. | A different item, which may have some connection with the needs of the customer, is sold. |
| Knowledge | Upselling is about selling a more expensive product, hence the business is much easier when compared to cross-selling. | Cross-selling requires knowledge about the items that are associated with the product bought. So a better idea of products is needed. |
| Result | The sale of a particular product goes high and the profit is due to a single product. | The sale of multiple products is increased and hence profit is even higher. |
| Example | When a customer needs an ordinary pen, insisting him/her to buy a Parker pen is what upselling is about. | When a customer comes to buy a pen, selling notebooks and pencils along with it is the process of cross-selling |
What is Upselling?
In marketing, upselling is the process of selling a better quality product than what was requested by the customer. By this process, the profit acquired by the seller increases. The customer would not perhaps have thought about such an option. Convincing them to buy the service or product is solely the talent of the seller.
To improve the sales by implementing upselling needs a tricky mind. A salesman with this tactics knows the business well and can find opportunities in this field. Sometimes upselling can be profitable for the buyer too. They may get the quality that they have intended just by spending a bit more.
On the other hand, the customers should be vital while buying a certain product. The seller can cheat them by hiking the price of the product for personal gains. This is a part of upselling and the buyer must become active.
Companies promote their brands utilizing upselling. The laborers are taught this technique before they join the sales. They also give salary hikes for the laborers who attain the target and eventually the laborers try their level best to promote the brand. Hence upselling has become a practice in improving business.
What is Cross-Selling?
Cross-selling is more common in day to day life. This happens in small shops to large malls. When a customer buys a certain product, making them buy another related item and gaining profit is called cross-selling of a product. The sold product may be an item which is essential with the bought product.
Cross-selling is simple as many products share a relationship with a product. So, many options are available for the seller to convince the buyer. When a customer gets convinced by the seller and buys all the products suggested by him, the seller gains confidence. The seller can use the same trick with all the customers.
Cross-selling must be implemented carefully as this can affect the relationship of the client with the company. If the customer is forced to buy an item, he/she may not be back to the shop later. Also the product which is additionally sold should be of good quality.
Companies dealing with a wide range of products promote cross-selling. There can be incentives for the laborers attaining the target sales. Hence the laborers are also motivated for this. Ethics is to be maintained while this scheme is operated.
Main Differences Between Upselling and Cross-Selling
- Upselling deals with providing the clients a better quality service and cross-selling is about increasing the quantity of the sales.
- In upselling, a similar item that the customer intends is sold while in the case of cross-selling a different item that may share a relationship with the required product is sold.
- There is not much knowledge required for upselling a product, only a more expensive item is sold. This is not the case of cross-selling. In cross-selling, the product which is most essential with the selected item is to be known and to be convinced.
- In upselling a selected product is sold for a higher amount and the gain is from a single product. In cross-selling multiple items are sold and the net profit is gained from all of these.
- Upselling is usually done in a large market as varieties of a single item are required. Cross-selling can be done in any sort of market.
Conclusion
Upselling and cross-selling are the business strategies that help to increase profit. The customers get a better service while the seller tries to upsell a product. In this way the customer gets a better option. The customers can choose between their options. Also, they must be careful in their decision.
During cross-selling, one or more products are sold along with the requested item. The customer may find this helpful since the products may be closely-related. Also the seller can sell more items. Both upselling and cross-selling improves the turn-over of a company and hence hikes are given to the laborers who achieve this target.
References
- https://pubsonline.informs.org/doi/abs/10.1287/mnsc.2016.2600
- https://ejournal.bsi.ac.id/ejurnal/index.php/swabumi/article/download/5399/3039