The difference between cross selling and up selling

A lot of businesses want to upsell to generate more value out of a customer but often end up cross selling instead. In this video I talk about the difference in the two and why upselling is great and cross selling is disastrous.

A lot of people talk about upselling and upselling is where you’ve got a high-end package in your business. And you’ve got a lot of customers on a basic package and your goal is to really trade those customers up onto this high-end package. So that’s good because the high-end package is probably your signature solution and you’ve designed it to be the exact solution that your ideal customer needs. So now you’ve built it. What you’ve got is a lot of customers who are probably on a legacy solution that is probably still quite good, but it’s not everything they need and not going to get the maximum amount of value out of it. So by moving them onto this new package that you’ve developed, they’re going to get even more value. You’re going to make better margins. So it’s a really, really good thing for your business. So, that is called upselling existing customers onto your high-end package.

A lot of people in their businesses, they have different tiers of products. I’m highly against that as you may have noticed from some of my other videos. If your business is niched enough and you’re looking for that one specific type of customer and you’re going to give them one specific solution, then that solution should be everything they need. There shouldn’t be different levels of that solution. Is it the solution, or isn’t it the solution? So that’s why you should only have one solution. But what you’ll find is as your business develops that one solution, you’ll have all these clients on your old legacy solution. So you need to move them up. So that’s upselling, which is great for a business. Let’s talk about cross-selling.

Cross-selling is disastrous for a business because what happens is you get customers on a particular type of solution, and then what you try and do is add additional products. So what cross-selling is, is you’re not moving them away from the solution they’re currently on onto a better solution. What you’re trying to do is add stuff to what they’ve already got. And a lot of the time when businesses add stuff to their solution and cross-sell, they add things that are often not that complimentary. They’re purely being added just to make those additional margins.

And what that does is it puts the business under a huge amount of strain because they then have to have a team that diversifies to a point where it loses its efficiency and then ultimately the business then loses its margins. And it loses that really specific niched message, which says, we’re the specialists, we’re the experts in this area. And because of all their cross-selling, they’re making lower margins and they’re essentially diluting their expertise and their message and their credibility. So that’s why cross-selling is disastrous for a business.

So one of the things you should really be doing is just thinking about when you do add a new product or service, think about whether it forms part of your solution, that you want all your customers to have. And one day would you be willing to say, hey, to the customers who don’t want that thing, maybe we’re not the best people for you. That’s when you’re really upselling. But if you’re just adding services, because you think it’s a good way to make a little bit of money without any overall strategy, then you’re probably cross-selling and that’s going to be quite dangerous for your business.

Have a little think about that. If you want a bit more information on this, then why not book yourself in for a call with me? We usually start off with a quick phone call and then book in a longer meeting. So if you go to the link tat the bottom and book yourself in for a meeting with me and we can talk about this.

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