What Are the Differences between Cross-Selling and up-Selling?

Cross-selling and up-selling are two types of selling techniques or strategies that just about all businesses who market to consumers will use at one time or another. While there are some similarities between the two selling tactics, each approach has some unique purposes that make them ideal for specific situations. The easiest way to think of the differences between cross-selling and up-selling is that the former has more to do with enticing the customer to buy something that will go with an item already purchased, while up-selling is more about encouraging the customer to purchase something that is considered an improvement or upgrade over a good or service the consumer has purchased in the past.

One way to understand the difference between cross-selling and up-selling is to consider the various service offerings provided by a communications company. A local telephone company will offer local telephone service to its subscribers, but also often provide the opportunity to purchase add-ons that help to make that local service all the more helpful and convenient. To that end, the salesperson for the local company may present customers with the chance to enhance their telephone service with the addition of voice mail, long distance services offered by the local telephone provider, or other touch tone features that will make that basic service more valuable to the customer. This type of activity would be considered cross-selling.

A major difference between cross-selling and up-selling is that the goal with up-selling is not to sell additional products that work with the good or service originally purchased, but to entice the customer to move on from that earlier purchased service to something that is superior, and usually costs a little more money. For example, a company that makes simple two slice toasters may release a new model that will accommodate four slices of bread at a time, even including larger slots for the bread slices, what will accommodate other types of bread such as bagel slices. Available at a price that is higher than the simple two-slice toaster, the salesperson will note how much more versatile the four-slice toaster is in comparison, with the ability to toast more slices at a time and not being limited to slices that are the standard size. When successful, the salesperson convinces the customer to abandon that older toaster and buy the new and improved model.

Many companies will engage in cross-selling and up-selling whenever possible. When managed to best effect, both methods can help to enhance relations with consumers, who tend to see the salespeople as being aware of and receptive to their needs for additional or improved products. Should the approach used by the salesperson seem to be more about making a sale and less about providing added value to the customer, both cross-selling and up-selling attempts may backfire, actually damaging the customer relationship rather than making the relationship stronger.