Upselling and cross-selling encompass many definitions and techniques sharing the same goal: deepening the relationship with your customers through additional sales.
As a consumer, you've likely encountered some of the strategies leading to it. You can't buy a plane ticket without navigating numerous pages and options to increase the cost. SaaS companies have mastered product nudges to turn free users into paid ones.
While it may feel (and sometimes look) like dishonest ways to extract more money from you, there's a reason why such experiences have multiplied in the past decade — to the point of defining the modern customer experience: it works.
Whether you are selling a subscription-based plan or running an e-commerce store, it has become essential to drive more growth, as it can now account for a significant share of your revenues.
Upselling and cross-selling are a sure bet: according to studies, the probability of selling to an existing customer is between 60 and 70%, versus 5-10% for new customers.
Existing customers are also more likely to try new products and spend more (an average of 31%).
Without resorting to the degraded experience you might encounter when shopping online or trying out a new B2B product, you can build a powerful network of strategies to increase upselling and cross-selling.
In this guide, we will explore in detail:
- Upselling, with its benefits and best practices,
- and Cross-selling.
With examples of questions you can ask Blobr.
Upselling
Upselling is a sales technique that aims to increase the value of a transaction with a customer through an upgraded product version.
It can appear on a cleverly designed pricing page — the highlighted "popular plan" is a good example. Or within the product, with locked features, a free trial, or a usage limit.
For example, let's consider a B2B product with a subscription-based monetization system.
If the free tier includes some basic features, each time you try to access more advanced functionality, you'll be redirected to the pricing page to encourage you to take an upgraded version.
A widely used technique is to include a threshold over which you can't use the product anymore. Termly, for example, is free up to 10,000 monthly visits. After that, you must pay to keep the consent banner on your website.
Benefits
The most direct benefit is monetizing users who wouldn't pay otherwise.
Consider upselling as the second blade of your sales razor after the free trial or plan.
It also increases the LTV (lifetime value) of those already paying.
Since upselling targets users who already know you, this is one of the most cost-effective growth strategies you'll find.
Beyond monetization, establishing relevant upselling strategies helps build a better customer relationship. It pushes you to provide more personalized service and be more aware of customer support needs.
Best practices
So, how do you find the right customers for upselling?
1. Find the patterns and signals of upselling opportunities
People close to the usage limit or using your product intensively will be prime targets. You can start by analyzing this with Blobr:
2. Assess the level of satisfaction
A happy user will be far more likely to upgrade. As mentioned earlier, this is a chance to truly build a lasting connection with your customers.
Nurturing can continue after the conversion. By sending additional content, asking for feedback, and providing top-notch documentation, you can build the kind of long-lasting relationship that will be rewarded by an upsell.
3. Give the right value to your product
The SaaS monetization model is simple to understand but challenging to manage.
You have few levers at your disposal to find the right balance to align pricing with the appropriate level of service. These levers are plans, features, and usage.
Nobody will upgrade if your basic or free plan is too generous. Similarly, if the next plan doesn't provide enough of an improvement in service and usage, users won't see the value in upgrading.
Upselling will only be effective if you have already established a balanced pricing strategy. Without this balance, you may struggle and potentially devalue your product.
Cross-selling
Cross-selling involves proposing additional items to complement a purchase, unlike upselling, which offers an upgraded version of a product.
Where upselling convinces your customer that the upgraded plan with all the additional features is worth it, cross-selling is more an art of pairing the right products. The first product the customer buys will work on its own, but it would work better if they also bought X, Y, and Z.
Cross-selling can occur during the purchase (think about the "Frequently bought together" section), or on the checkout page (like car rentals offered after choosing a train ticket).
Even after purchase, you can push products for cross-selling in the confirmation email or recommend related products.
Benefits
Like upselling, cross-selling helps increase and maximize Customer Lifetime Value. Offering the right product aligned with the first purchase also enhances fidelity to your brand. Each additional sale also increases the probability of future sales.
Best practices
1. Understand the profile of cross-buyers
To optimize your cross-selling strategy, the first step is to understand the profile of your customers who have made multiple purchases.
How many times have they made purchases? What is the average order value for them? Which product drives the most cross-selling?
Answering these questions will open numerous possibilities and help you scale your efforts.
2. Show the right product at the right time
Relevancy is key.
Whatever the step when it occurs, you need to propose products that fit with the initial purchase.
To find out which products are usually bought together in cross-selling, you can leverage your data with Blobr.
3. Use cross-selling as a lever to establish your brand
Cross-selling is also an efficient way to push some of your best-selling and signature products.
For first-time buyers, for example, you can promote some of your top-selling products, the ones defining your brand.
When creating a connection with your customers, using this lever can greatly enhance your chances of seeing them return. Even if they don't take advantage of cross-selling for one of your signature products, they'll be aware of their existence.
Data is your best ally in building a successful cross-selling strategy.
By leveraging these three levers — customer profiles, product bundles, and best-selling products — you will be able to offer an experience that's always relevant for your customers.
Upselling and cross-selling are powerful strategies to grow revenue, strengthen customer relationships, and enhance Customer Lifetime Value. However, implementing these strategies thoughtfully and ethically is crucial.
Remember, the goal is not just to increase sales, but to provide genuine value to your customers. Use data intelligently, personalize your approach, and prioritize customer satisfaction. Balance short-term gains with long-term relationships, continuously test and refine your strategies, and maintain transparency about the benefits of upgrades or additional products.
By implementing these strategies thoughtfully, you can create a win-win situation where your business grows while your customers receive enhanced value and a better overall experience.
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