Increasing customer lifetime value, driving up profitability and offering a personalised service that shoppers love – sounds like a retailer’s dream wish list. Which is why the twin strategies of cross sell up sell continue to be an essential element of a thriving retail business. The notion of upselling and cross-selling is as old as retail itself, but today’s retailers have the advantage of technology to help them. They can use the power of retail management solutions to hone their upselling and cross-selling for maximum impact.
What are upselling and cross-selling?
Let’s start, for clarity, with some definitions, because whilst the two terms are often used interchangeably, they are two separate techniques. Upselling is persuading the customer to buy a bigger/better/more expensive version of the product they have selected. It requires convincing the shopper that they will get better value from the higher-priced item. Cross-selling is offering them a complementary product or service to go with their original selection and is all about enhancing the customer experience of the product or service.
If we use electrical retail as an example, with a customer who has selected a TV, upselling would be encouraging them to buy a bigger-screen model, whereas cross-selling could be offering them an insurance policy to protect their investment, or a surround-sound system to enhance their viewing experience.
Why does it work?
Cross-sell up sell techniques engage with customers who have made, or are very close to making their purchase decision. According to data from Forbes, it is the fact that retailers are dealing with existing customers that makes the cross-sell up sell approach so beneficial:
As the Harvard Business Review explains, acquiring a new customer is 5-25 times more expensive than keeping a current one, which is why cross sell up sell is a far more effective way to generate revenue and profit growth.
Both cross-selling and upselling drive similar benefits:
How does a retail management solution help?
Cross-selling and upselling requires planning, retailer data, and tools for implementation. An enterprise-class retail management solution offers retailers a suite of integrated functions that provide the platform for cross-sell up sell success.
Upselling and cross-selling have long been used to generate increased sales and profit. Retail Management Solutions add sophistication and scalability, meaning that retailers can reap even greater rewards from this tried and tested retail approach.
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