I’m a sucker for an upsell.
Offer me a bigger bottle of my favorite toner or skin serum at a 5% discount, and I’ll probably go for it. You wouldn’t think I would -- I’m as resistant to a sales pitch as sandpaper is to silk -- but it gets me hook, line, and sinker.
I’m not alone in this. The tendency to spend and buy more than intended when given a clever-enough offer is so prolific it has its own name: Target syndrome.
But while upsells and cross-sells do terrible things to my bank balance, they knock it out of the park for creators’ bottom line.
Upsells drive as much as 33%+ revenue for subscription services like memberships. They do even more for one-off products like online courses and digital downloads.
So while I’m probably destining myself to drop even more cash on the great info products out there by writing this article, we’re going to dive into this strategy in-depth today.
First, we’ll talk about what upselling and cross-selling are, then we’ll look at some examples, go over four tried-and-true tips for making the most of your offers, and finish it off with a step-by-step for cross-selling and upselling from your Podia storefront.
Let’s get to it.
What is upselling?
Upselling is a sales strategy where a customer is offered a more expensive variant of a product, often at a discount, to net a higher sale. It’s common on many ecommerce sites and offline locations.
McDonald’s (in)famous “would you like to supersize that?” is a good example, if a tired one.
Another example might be a linen retailer that sells several varieties of sheets. If a customer was buying a 300 thread-count queen fitted sheet and was offered a 500-count sheet of the same size, that would be an upsell.
Upsells don’t have to include a discount, though they often do to make the upgrade more enticing. If you do choose to add a discount to your upselling strategy, just ensure it’s not such a steep discount that it devalues your brand image.
After all, how you discount your online products doesn’t just impact your profits -- it can also play a big role in how your audience grows (or doesn’t, as it were).
Regardless of whether you add a discount or not to the deal, it’s a deal worth pursuing. Trying to sell the same upgraded variants to a new customer takes a lot more hustle than selling the same to a current customer.
And even if it is the first time someone is buying from you, since upsells are only offered during the buying process itself, they’re already a customer. The probability of selling to that current customer is 60-70% -- a far cry from the probability of selling to a complete stranger at 5-20%.
What’s more, 40% of online retailers’ profits are made from just 8% of their current customers, according to a 2012 Adobe report. The data was sourced from over 5,000 companies across the globe, so while it’s an older data point to consider, it stands the test of time for its rigor.
But if that’s not enough to convince you, this might be --
Buckling down on their upselling strategy and making it a headliner in their sales techniques helped one luxury-level hotel brand increase their annual income by $2.4 million.
Granted, it probably won’t yield the same exact result for you unless your business also happens to be a hotel line, but the point stands:
Upselling is a cost-effective sales strategy which uplifts profits on a sale-by-sale level, cumulatively improving your bottom line without requiring the same rigamarole a new sale does.
And, if you have the right storefront platform, it’s easy -- but we’ll talk more about that in a minute. For now, we’re going to wade a little further into the weeds, because this is where things can get confusing.
What is cross-selling?
Cross-selling is when you offer related or coordinated products during a transaction. Like upsells, they can and often do include discounts, but are not required for it to qualify as a cross-sell.
This is usually where things start to get a little convoluted. Going back to the Mcdonald’s example -- it’s around lunch when I’m writing this -- the fries and drink that come in a “meal deal” are the cross-sells.
For the linens retailer, selling pillowcases in the same size and color to go alongside the sheets would be a cross-sell, but not an upsell.
Put another way, if upsells are the upgrades to the original product, then cross-sells are the accessories.
Cross-selling works because it plays on two critical factors: familiarity and simplicity.
On the familiarity side, 59% of customers prefer to buy from brands they already know when it’s time to add a new product. Cross-selling offers those new products in an environment that’s familiar, and as such, comfortable.
Moreover, if cross-selling is backed with effective customer research -- and it should be, there’s nothing in marketing that works without knowing your customer -- it provides a two-way benefit.
Not only do you have the opportunity to make more on a sale, but you also have the ability to provide additional products to solve your customers’ challenges.
As for the simplicity factor of cross-sells, that comes down to cognitive fluency (sometimes also called processing fluency).
You see, humans prefer simple and painless. The easier something is perceived to be, the more enjoyable it is for us to make decisions about it. User experience designers often leverage cognitive fluency to make decisions faster and easier for users.
The more cognitively fluent something is -- say, a font choice -- the faster the user processes the information and moves onto the next action.
As you can probably guess, using that same propensity for simplicity in marketing shortens the window between consideration and conversion.
But rather than tell you, let’s walk through an example.
Say that you decide to buy a high-quality camera to start photography as an online side-hustle or a hobby.
It comes at a pretty penny, so it takes a lot of time and effort mentally to learn about lens types, how lighting plays into photography, and which camera works best with which image processing software.
You finally find a camera you want: a Nikon COOLPIX on Amazon.
You go to add it to your cart, ready to check out, when lo-and-behold, you’re offered the accessories you need to make the most out of your camera at a discount.
You’ve already committed to buying this camera from this retailer, so it’s familiar, and if it’s done right -- as it is in the above case, where the pieces are all justified additions to the core product -- it’s simple.
You’re going to need those things anyway, right? Better to save money now and ante in for the additional pieces while you’ve got a deal on the table.
Basically, cross-selling works because it gives buyers an opportunity to be lazy with their decision-making, and buyers love being lazy. (Self thoroughly included.)
The key to making this effective for you is, as most things are in business, keeping your cross-selling approach as customer-centric as possible.
Do that, and you could end up like the high-tech marketing agency Merkle’s client who raised profits by $50 million with a customer-centric approach.
Hopefully, the delineation between upsells and cross-sells is clearer at this point, but just in case it’s not, let’s take a (quick) look at two online companies that do both upsells and cross-sells.
Upselling vs. Cross-selling examples
Upsells and cross-sells are closely related strategies but don’t necessarily have to be used in conjunction. When they are, though? It’s gold.
Check out how 1800Flowers upsells this (amazing) blue orchid ensemble, offering vases and additional stems to upgrade it. Since flowers require water and something to hold that water, the option to include a vase falls into the upgrade option.
The top option with windchimes are a type of cross-sell, but where their cross-sells really shine are after you set a date and start working through the checkout.
Flowers that model my personal hair color goals and chocolate pretzels without an additional shipping fee? Yes, please.
For another example, take a swing by Xfinity. If you’re in the market for internet service, they’ve got upsells and cross-sells for you on the same page.
And since each successive option is only slightly more expensive than the last, it’s a brilliant move on their part. $5 more a month for streaming access to the major networks isn’t a hard sell.
Now that we’ve thoroughly eliminated any ambiguity between upsells and cross-sells, here are four tips -- some common, some not-so-much -- to make the most out of these sales strategies.
4 tips for how to upsell and cross-sell
Tip #1: Sell logically related products
When choosing which products to upsell or cross-sell, think of it like this:
You want sibling products, not cousins.
In the case of upsells, you want the older, more mature sibling -- the variant of your product that’s more robust than the original choice. For cross-sells, you want a product that, while not a variant of the original, pairs logically with the current choice.
For instance, if you were buying a hamburger, which offer would you be more likely to accept?
- Upsell: A bigger hamburger with avocado and bacon. ✓
- Upsell: A fried chicken sandwich with avocado and bacon. ✗
- Cross-sell: A hamburger with a drink and fries. ✓
- Cross-sell: A hamburger with eggs benedict. ✗
You need to sell related products that your customer is interested in, not just the products you want to move.
This is especially important if you work with a business-to-business (B2B) audience, as 83% of B2B buyers feel it’s beyond critical the businesses they work with are trying to help them instead of trying to turn a quick buck.
Business-to-consumer (B2C) audiences feel the same way, with 56% saying that engaging them requires a business to have a deep understanding of their needs, and moreover, to demonstrate they care.
And demonstrating care about the customer during an upsell or cross-sell means offering them products that help further their goals, not your own.
So regardless of how much you might want to sell a certain digital download alongside your online course, if it doesn’t serve the customer, it won’t sell half as well.
Neither will duplicate products.
Tip #2: Don’t upsell or cross-sell duplicate products
Returning to our familial analogy of selling siblings, there’s a caveat about selling related products: avoid selling twins.
If you sell products that repeat each other -- particularly the same results, like learning basic conversational phrases in a foreign language in a week -- you can anticipate getting a lot of returns and requests for refunds.
After all, unless someone happens to be a collector of online language learning tools, they’re more likely to buy identical products to compare them than intent to keep everything.
For instance, if I were in the market for a new sleep mask, I might indeed take the offer from Amazon below -- but I wouldn’t keep all three, which would ultimately throw the sellers’ books off, and if there’s an inconvenient return policy, keep me from purchasing from them again.
It’s not a good situation for anyone to be in.
But perhaps it sounds far-fetched to you or like none of your customers would ever do that. Maybe you’d never do that.
I’ve got more than anecdotal evidence, fortunately. It’s not just a common practice, it’s becoming the new normal. 41% of consumers buy variations of products with the intent to return them.
Ergo, unless you’re comfortable handling a lot of returns and hassle for the sake of a likely small profit uplift, cross duplicate products off of your upsell and cross-selling lists. There are more effective ways to leverage your inventory.
Incidentally, that’s where the next tip comes in.
Tip #3: Upsell step-wise and don’t jump levels
If there’s nothing else to remember about upselling and cross-selling, it’s this:
Take it easy. The more people have to think about your offer, the more time they have to abandon it, or worse, the original sale altogether.
Let me show you what I mean.
Suppose you were signing up for a free membership to try something out -- for the sake of example, let’s say signing up for SmartInsight’s free membership.
(If you’re looking for marketing resources, you probably should, for what it’s worth. A lot of great resources for marketing novices.)
If you were asked to upgrade to one of their paid memberships in the middle of the registration, would you be inclined to accept?
Probably not, right? It’s too big of an ask to go from zero to, at minimum, $79 in the same interaction. You need to be nurtured a lot more before it’s the right time to consider upgrading to a paid plan, even if it is worth the money.
Now, take that same example, but instead of being asked to upgrade from free to $79, suppose you’re offered a paid resource kit (i.e., digital download) for under $5 dollars if you do it then and there. You’d definitely stop to consider it longer, wouldn’t you?
Ultimately, what you designate for upsells and cross-sells is up to you, but think baby steps.
Someone who is willing to download a free resource is much more likely to commit to a $5 upsell than a $150 dollar upsell. Make smaller, more upsell-ready products that can transition from low-dollar to high-dollar over the lifetime of the customer.
Focusing on monetization of your customers -- which is what upselling does -- has the greatest impact on your bottom line, almost twice as much as improving retention, but it’s for naught if you manage to turn the customer off by asking for too much and losing them altogether.
Speaking of timing it, do keep your upsells and cross-sells urgent -- and genuinely so, at that.
Tip #4: Make it genuinely urgent and exclusive to the transaction
Urgency is one of those marketing foundation tactics that everyone is tired of hearing about, but it’s too influential not to close out this list of tips. Every day, you come across new stories from businesses small and large about how urgency improved their sales.
For instance, creating a sense of urgency helped one entrepreneur improve conversions by 332%. No, that’s not a typo or an extra “3”.
It was just that effective.
Effectiveness that isn’t limited to upsells, by the way. Urgency is a popular strategy for writing better sales emails and email subject lines, too. Subject lines that convey urgency have as much as a 22% higher open rate than those that don’t.
As for making urgency work with upsells, it’s simple: offer them a deal they legitimately can’t get outside of the specific transaction flow they’re following.
If they’re buying an online course on how to use a loom and you offer them another course on how to dye thread at a discount, don’t re-offer the same discount to the same customer post-purchase. The urgency needs to be genuine. If it’s not, people will catch onto it.
As a very recent example, I’m a big Hot Topic fan, but I wasn’t able to get out this past weekend to use my “hot cash”, which is what they call their redemption program.
It was a tragedy for sure, but probably better on my wallet. The last thing I need is to drop more money on more band t-shirts.
But as it happens, they’ve ever-so-graciously extended the sales period so I can correct that mistake, which is great for the consumer.
It’s great for the retailer, too, at a glance, if it gets more sales that might’ve been lost in.
Unfortunately, it also decreases any future plans I may have to hop-to during the redemption period in the future. The urgency is mitigated, even with boosters like this on-site countdown they feature to let me know how long I have left.
In fact, thanks to their gracious offer to give me two more “hot cash” discounts over email, I’m much more likely to wait until the end of the next period to see if they’ll do it again.
So while their offer is a boon in the short-term, the long-term effects can be significantly more insidious and undermining.
The bottom line is this:
If it's not a genuinely urgent deal, don't offer it as a cross-sell or upsell.
OK. That covers urgency -- as for authenticity and exclusivity with your upsells and cross-sells, it’s easy if you’re using Podia.
Let me show you.
How to upsell and cross-sell from your Podia storefront
If you don’t already have a Podia storefront, signup for our two-week, no-obligation trial here to follow along.
Otherwise, start at your dashboard.
From here, browse to the product page and scroll down until you find the product you want to add an upsell or cross-sell to.
For the sake of example, and because I firmly believe in showing off my cat whenever possible, I’ll be using this free digital download.
Click on the relevant product link and then select the “pricing” tab.
Scroll until you hit the second section, “upsells”. This is also where you’ll use cross-sells -- the only difference is what type of product you add to it.
Now, click on “add an upsell”.
For an upsell, add a product that’s an upgraded variant of your current product. In my case, it would be even more amazing pictures of my cat.
From here, you also want to set your discount rate. It can be as little or as much as you want it to be, but the more of a discount it is, the more likely people are to jump at the offer (see our fourth tip).
Click “save” once you’re satisfied, and . . .
That’s it. Your upsell is now live. If you’d like to add another upsell or cross-sell, just click the “add an upsell” button again and repeat the process.
Here’s an example of both a cross-sell -- pictures of Veronica’s adorable pup to complement my cat -- as well as an upsell and cross-sell together.
It doesn’t get much simpler than that. To check out all the other features Podia has to offer -- as well as get some dedicated Q&A time with our CEO -- tune in for our weekly demo.