Cross-selling vs Upselling: What’s the Difference?
The differences between cross-selling vs upselling cause lots of confusion in the retail world.
Some businesses use upselling to help them generate bigger profits, while others use cross-selling.
So which strategy should you apply to your store?
Well, the key to decide between upselling vs cross-selling, starts with understanding the difference between the two tactics.
Now, both upselling and cross-selling are amazing strategies that can boost your bottom line.
However choosing to deploy one tactic over the other depends on the context. You have to consider what you’re selling, when you’re selling it, and to whom.
In this post, you’ll learn the key differences between cross-selling vs upselling. We’ll also cover lots of examples so you can learn best practices to help you implement your own cross-selling or upselling strategy.
By the end, you’ll have a deep understanding of when you use cross-selling and upselling, and how to combine them for best results.
Sounds good? Let’s jump in!
What is Cross-selling?
Cross-selling is a sales tactic where you offer an additional product or service to compliment the customer’s initial purchase.
For example, when you’re in McDonald’s and the teller asks: ‘Would you like fries with that?’ - this is a cross-sell.
Because fries compliment your initial order of a burger. A drink is also a cross-sell as it further compliments your existing order.
Good cross-selling can boost your profit margin from a single sale and has a place in every marketing strategy.
Seriously, the phrase ‘would you like fries with that?’ is estimated to account for somewhere between 15-40% of McDonald’s annual profits.
As we’ll see later, this is especially true when you deploy upselling tactics via e one-click upsells to convert customers who may have had no intention of purchasing the additional products.
Okay, world's most famous cross-sell; ‘Would you like fries with that?’ is a good example. But here’s another one from flower retailer proflowers:
When I add a bouquet of flowers to my basket, they use the cart drawer to suggest related products (e.g. balloons, greeting cards etc).
Some other common examples of cross-selling include:
- Offering customers $15/mo insurance when they buy a new phone
- Suggesting $25 insoles when selling a pair of new shoes
- Amazon showing you that ‘what other customers bought’ section
- The waiter asking if you’d like bottled water with your food (as opposed to tap water)
Basically, any scenario where a complimentary product or service is introduced to the sale is cross-selling.
We’ll look at more cross-selling examples later. But first, let’s talk about upselling.
What is Upselling?
Upselling is a sales tactic where you offer a more expensive (or upgraded) version of a product to a customer.
So, when you’re in McDonald’s and the teller asks: ‘Would you like to go supersize for $0.75?’ - this is an upsell. Because it's essentially the same product, but just a more premium version.
Upselling is about extracting the maximum value from each sale. While at the same time, helping customers find the best product to meet their needs.
For instance, say you sell backpacks. Imagine a customer is going on a camping trip for 2 weeks, but they want to buy a cheap backpack. You might guide them to a more premium backpack that’ll be more suited to their needs.
When done right, upselling helps both you and your customer. It’s a particularly powerful strategy because the customer is right in front of you. They’ve traveled down the conversion funnel and are sales qualified.
So, upselling customers is a much easier way to generate more revenue than attracting new ones.
Sticking with proflowers, here you can see a classic product page upselling example:
Proflowers present the shopper with 3 options to choose from - from $53 for standard, to $83 for premium. As you select more expensive options, the product image changes to a more impressive bouquet.
Some other examples of upselling are:
- Highlighting the benefits of an iPhone 14 Pro ($900) over an iPhone 13 ($700)
- Offering leather seats (+$3,500) to a customer buying a new car
- Offering premium ski rental for +$15 extra per day instead of standard skis
Hopefully by now the difference between cross-selling v upselling is becoming clear. So let’s sum up the key differences.
Cross-selling vs Upselling: The key differences
The core difference between cross-selling vs upselling can be summarized as:
- With upselling, you offer a more expensive version of the same product or service.
- With Cross-selling, you offer additional complimentary products or services.
While both cross-selling and upselling are great for boosting average order value, they generate revenue in different ways.
With an upsell you generate more revenue because your customer spends more on a larger or enhanced version of the product. For example, you might convince a customer to buy a more advanced running shoe for $40 extra.
With a cross-sell, you generate more revenue from the sale of additional products alongside the initial conversion. So for instance, you might persuade a customer to buy a packet of running socks to compliment their new shoes for $20.
Another difference between cross-selling v upselling is complexity. In many instances upselling is more straightforward.
This is because cross-selling involves introducing new products into the transaction. This gives the customer more to consider. And consideration acts in opposition to conversion.
With upselling, the customer has either completely or almost completely decided on the type of product they want. So, offering them an enhanced version of the product is simple. The customer needs to only consider features and price - not entirely new possibilities or functionalities, as when you introduce new products.
Now, it’s important to understand that cross-selling vs upselling aren’t mutually exclusive. You can, and should, combine both strategies for best results.
So, let’s return to McDonald’s and unpack the principles behind their strategy to combine upselling and cross-selling.
Cross-selling vs Upselling: 5 Best Practices From McDonald’s
McDonald's famous cross-sell and upsells can teach us a lot. "Would you like fries with that?" & “Want to go supersize?” account for up to 40% of their revenue.
So, what do they do that makes it so effective? What can we steal from them and apply to our own strategy?
Well, here's 5 simple principles McDonald’s use that you can apply to your cross-sells and upsells too:
Identify your Fries
The best cross-sell and upsell offers are no-brainers for customers. That’s because they make the product your shopper is buying more attractive. For example, crispy fries enhance the experience of eating a burger.
For cross-selling, choose the products in your store that enhance each other’s offerings. (e.g. socks + shoes, electronics + insurance etc.)
For upselling, ensure you know and communicate the benefits of the upsell offer. Think about how you can easily communicate the #1 reason why customers would want to upgrade. (e.g. Hungry? Go Supersize!)
Price Your ‘Fries’ Appropriately
The beauty of McDonald’s fries cross-sell is that the fries are relatively inexpensive compared to the burger. The lower price reduces the risk and mental energy required to accept the offer.
When designing cross-sells, choose a complimentary item that’s below 30% of the price of your core product. This will keep your conversion rates nice and high.
Similarly, when designing upsells, ensure that your upgrade is not more than 30% the original product price. This way you won’t completely go outside of your shoppers price range.
Resist Offering Nuggets Too
Imagine, in McDonald’s, if they asked, “Would you like fries, nuggets, a baked apple pie, a salad, a happy meal, or possibly a Mcflurry with that?” You’d be pretty confused, right? See, as more options stack up, the decision to accept one becomes more difficult.
So, keep things simple by offering only essential complimentary cross-sells and upsells. Too many options may harm your CVR. As a general rule, don’t present more than 3 options for cross-sell or up-sell offers.
Don’t Be Pushy
You’ll never hear a Mcdonald’s server say, “Wait, are you sure you don’t fries? They’re really good, and they’re only $1 extra?” That’s because they’re trained not to.
See, being too pushy or salesy has the potential to actually harm your customer relationships. In a similar vein, it should be easy for your customer to decline your offer and not be subsequently harassed to reconsider their decision.
Remember, customers didn’t ask to be cross-sold or upsold, so don’t force it. Always make it easy to say no. The last thing you want is to lose the initial sale or harm customer relationships.
Get Your Timing Right
The cashier at McDonald's (or more recently their robo-cashiers) won't ask you "are you interested in fries?" until you've already committed to buying a burger.
This is because according to the psychological principle of consistency, you're much more likely to say 'yes' when you've already decided to purchase the burger.
So, present cross-sells and upsells after shoppers have committed to a purchase. As a customer moves closer to a purchase (and even post-purchase) they’re more likely to convert on your upsell and cross-sell offers.
A cart page cross-sell, a one-click upsell or thank you page cross-sell will net you the highest CVR without distracting uninterested shoppers.
Cross-selling vs Upselling: How to implement them on your store
Now that you know the differences between cross-selling vs upselling, let's look at several strategies you can implement in your eCommerce store. It's worth noting that you can use many of these strategies to create both cross-sells and upsells on your store.
1. One click cross-sell example
One click cross-sells are a supercharged cross-selling strategy for eCommerce retailers. Essentially, you introduce the upsell after the customer has already purchased - between the checkout page & the order confirmation page.
The beauty here is that customers don’t have to re-enter their payment details. These post-purchase upsells can be claimed in one click. So you’re delivering an offer, at the exact moment when their purchase intent is highest, and at the same time, removing all friction from the transaction.
Plus you can trigger these offers based on characteristics that personalize the offers. So, let’s say you purchased a pair of shoes - would you like a pair of socks at 20% off?
It’s for these reasons that one-click cross-selling is so potent & of all the tactics covered in this post, it’s the fastest to implement and start making more sales immediately.
2. Cart drawer cross-sell example
The cart drawer is another excellent place to cross-sell customers to a higher basket value. This cross-sell is served when a customer adds a product cart.
In this scenario, your shoppers have displayed intent by adding to cart - so it’s a great time to hit them with another offer. The above example comes from ratio coffee. They suggest a coffee grinder to compliment their coffee machine.
For us, this cross-sell is a little bit expensive. Typically, you should shoot for between 10-30% of the initial purchase value. However, the grinder is a highly complimentary product, so we can assume they’re getting a solid conversion rate on this suggestion.
3. Cart page cross-selling example
The third cross-selling example comes from B2C shave brand Harry’s who suggest additional products on the cart page.
Cart-page cross-sells are awesome because they’re unintrusive. I.e. they don’t interrupt the buyer’s journey. Think of this cross-sell like the stacks of chocolate and treats surrounding the supermarket checkout.
They’re a great cross-selling strategy. And while you won’t get as high a conversion rate as say one-click cross-selling, they’re still a powerful tactic to help pump up your average order value.
Ok with these examples under our belt, let’s keep going to learn about the difference between cross-selling v upselling. Starting with a definition of what upselling is.
4. Checkout upselling example
Checkout upsells are an amazing strategy to add to your store. Checkout upsells are as close as you can get to replicating the ‘would you like fries with that?’ upsell in an eCommerce context.
With checkout upsells, you present various upsell options as the customer is checking out. For example, two upsells that ReConvert users deploy to make killer profits are:
- An add-on service - e.g. shipping insurance, or priority handling
- The same product with a discount - e.g. ‘Buy 2, get 15% off’ or ‘Buy 2, get a 3rd free’
With offers like this, you can easily upgrade a solid portion of your customers to a higher cart value and take home more profit from the transaction.
5. Product page upselling example
The next example of how to upsell comes from Tesla. On Tesla’s product page, they offer various upgrades to their cars. For instance, above you can add full self-driving capability to your car for €7,500 extra.
Product page upselling is one of the simplest types of upselling. You simply present the options and add-ons that customers might want, allowing them to choose what’s right for them.
Amazon does product page upselling well, with their comparison tables. These tables allow shoppers to see the benefits of each option and make the best decision based on their needs. For example, here’s four laptops spanning from $299 to $399.
6. Thank you page upselling example
Thank you page upselling is another powerful strategy to boost your profitability. In this tactic, you place upsell offers on your thank you page (also known as your order confirmation page).
The reason thank you page upselling works so well is because your customer’s purchase intent is highest. Plus, we know that the average customer visits the thank you page 2.2 times per order as they check for shipping updates.
This makes it the ideal place to upgrade customers to a higher order value with add-on services or by offering a bundling discount. For instance, if you're running a t-shirt store, you could upsell customers a color variant of an item they purchased.
Cross-selling vs Upselling: Use Both to Boost Your Profits!
Hopefully by now the difference between cross-selling and upselling is clear.
Cross-selling is when you sell additional items or services to compliment the customer’s original order.
Upselling is when you sell them a more expensive version of the same item.
While both upselling and cross-selling are sales strategies designed to increase revenue, the distinction between upselling v cross-selling is important.
Knowing which offer to present, and when to present it, is a matter of context. Among other things, it varies depending on the products you're selling, who you’re selling to, where you're selling and so forth.
We’ve borrowed 5 principles above from upsell and cross-sell superstar McDonalds. Use these principles to guide your upselling and cross-selling strategy. Draw on the examples provided and build out a powerful AOV-boosting strategy for your store.